PM CARES Fund

The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was created on 28 March 2020, following the COVID-19 pandemic in India. The fund will be used for combating, and containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future. The Prime Minister of India is the chairman of the fund. Trustees include the Minister of Defence, Minister of Home Affairs and Minister of Finance in the Government of India.[1][2][3]

PM CARES Fund
Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund
Formation28 March 2020 (2020-03-28)
HeadquartersPrime Minister's Office, South Block, New Delhi
Members
Chairman (PM)
Narendra Modi (ex-officio chairman)
Websitepmcares.gov.in

Establishment

The documentation concerning the establishment of the PM CARES Fund has not been made publicly available.[4][5] Officials have described the Fund as a "public charitable trust" and stated that the deed establishing the trust was registered on 27 March 2020.[5] However, in June 2020, the Prime Minister's Office stated in response to an application for the disclosure of the founding documents of the trust, that the Fund is not a "public authority" as far as transparency laws such as the Right to Information Act 2005 are concerned.[6]

A complete list of trustees of the Fund is not publicly available, although government officials have stated that the Fund is chaired by the Prime Minister of India, Narendra Modi, and has additionally ex-officio members including the Defence minister, the Home minister and the Finance minister.[7][8] In April 2020, government officials were reported as stating that the Fund "could have" 3 experts appointed by the Prime Minister to advise on the spending of the Fund's resources.[9] Officials also suggested that the trust deed would allow for the creation of an advisory panel of ten members to provide similar advice.[9]

The initial announcements accepting donations to the PM CARES Fund included details allowing domestic and international transfers of funds, and Indian ambassadors were directed to mobilise donations from foreign countries.[10] The Government of India announced that it would be setting aside a 15-year old policy of declining foreign aid in cases of disasters and calamities.[11][12] Foreign contributions and donations are regulated by the Foreign Contribution (Regulation) Act 2010 (FCRA) which requires registration, and regular documentation of funds received; however, the Fund has been exempted from all provisions of the FCRA.[13]

In April 2020, the Government of India issued an ordinance to exempt donations made to the Fund before 30 June, allowing them to qualify for a tax deduction under section 80G of The Income-tax Act, 1961.[14][15][16]

The Ministry of Corporate Affairs announced that donations would be counted as part of the statutory Corporate Social Responsibility (CSR) obligation of the companies, with additional CSR being offset in subsequent years.[15] Donations made to the state governments' initiatives and other national relief funds, such the Prime Minister's National Relief Fund or Chief Minister's Funds do not qualify for the CSR obligation.[17][4] Prior government policy limited CSR donations that were also tax-exempt to the PMNDRF, noting that this double exemption would be a “regressive incentive”.[4]

Donations and spending

Donations

The complete list of donors and total amount donated to the PM CARES fund has not been disclosed publicly.[7] A number of celebrities, including athletes, actors, and corporations have pledged support.[18] The Times of India reported on 19 May 2020 that it had received an estimated amount of US$1.4 billion (₹10,600 crore) within the first two months of its establishment but noted that the data on the total amount of donations received had not been disclosed by the Government of India and could potentially exceed this amount. Based on publicly available news reports of donations declared by various corporations and individuals, Times of India has suggested that 53% of this amount is from private sector corporations and employees, while 42% is from public sector undertakings and their employees in India, and the remaining 5% is from individuals.[19]

Public-sector undertakings who have pledged support include the Steel Authority of India Ltd.[20], Board of Cricket Control in India[21], Hockey India[22], staff of the Employees Provident Fund Organisation (EPFO)[23], In addition, several government officials have pledged support by donating part of their salaries, although concerns have been raised about circulars mandating or requiring such donations from government officials.[24][25]

Private sector corporations that have pledged support include Larsen & Toubro[26], Infosys Foundation[20], the Adani Foundation[20], Reliance Industries[20], the Hero Group[20], the TATA Trust[20], Paytm[20] and the Azim Premji Foundation.[27] Private individuals who have pledged support to the PM CARES include actors Akshay Kumar[28], Deepika Padukone and Ranveer Singh[29], Shah Rukh Khan[29], producer Karan Johar[30].

The Fund has also received pledges of support from a number of foreign entities and persons, including Russia’s State-owned defence exports company Rosoboronexport[31]

The fund enables micro-donations.[32] The minimum donation accepted for the Fund is ₹10 (14¢ US).[33]

Spending and allocations

The Prime Minister had said that the PMO had received many requests to help in the war against COVID-19 and that the PM CARES Fund would be used for disaster management and research.[34][35] On 10 May 2020, government officials stated that spending and allocations from the Fund would begin once a "respectable amount" had been collected.[4] The Fund has not disclosed its spending or procurement guidelines.[36]

The first allocations from the fund were announced on 13 May 2020, with a total amount of ₹3,100 crore earmarked for spending.[37] Of this amount, the Government of India stated that funds from PM CARES would be utilised to buy 50,000 ventilators that were manufactured in India, which would then be allocated to government hospitals in states and union territories. An additional sum of ₹1000 crore would be allocated to states and union territories to address issues faced by migrant workers, including provisions for accommodation, food, medical treatment and transportation. ₹100 crore would be allocated for the development of a vaccine against Covid-19, to be spent under the supervision of the Principal Scientific Advisor to the Government.[38][39][40] The Secretary to the Department of Biotechnology confirmed that funds spent on developing a vaccine would only be allocated to indigenous research projects.[39]

The purchase of indigenous ventilators from the Fund was reviewed by two government panels, which have subsequently raised concerns about the quality and suitability of the devices for treating COVID-19 patients.[41] On 24 June 2020, the Government of India issued a statement, indicating that 6% of the ventilators ordered by the Fund, i.e. 2,923 of 50,000, had been made, and were allocated to states and union territories facing a high number of cases, such as Maharashtra (275), Delhi (275), Gujarat (175), Bihar (100), Karnataka (90) and Rajasthan (75).[42]

On 21 June 2020, BJP President J.P. Nadda stated that 60,000 ventilators would be made available via funding from the Fund, by the end of June.[43]

Reception

Default and mandatory donations

On 3 April 2020, doctors' associations at the All India Institute of Medical Sciences, New Delhi objected to a circular from the hospital's administration, indicating that a day's salary would be deducted from their accounts and donated to the PM CARES Fund. The AIIMS administration ultimately withdrew their circular and accepted a proposal that doctors could opt in to a scheme to donate to the fund or could donate to any charitable organisation of their choice, on a purely voluntary basis.[44][45] Similar proposals for mandatory or opt-out donations were subsequently withdrawn from three other hospitals based in Delhi following protests from doctors' associations: Safdarjung Hospital, Atal Bihari Vajpayee Institute of Medical Sciences (ABVIMS)-Ram Manohar Lohia (RML) Hospital, and Lady Hardinge Medical College and Hospital.[46]

On 17 April 2020, the Jharkhand High Court ordered six petitioners to deposit ₹35,000 each in the PM CARES Fund, and install the Government of India's Covid-19 surveillance and tracking mobile application, Aarogya Setu, as conditions for granting him bail in a criminal case.[47]

On 19 April 2020, the registry of the Supreme Court of India issued a notice informing its employees that all officers would be donating three days' salary to the Fund, and that non-gazetted officers, and group-C employees would be donating two and one day's salary respectively. The circular gave employees one day to opt out of donations, stating that failure to opt out would be considered as consent to donating.[48]

On 19 April 2020, the Revenue Department of the Finance Ministry issued a circular indicating that one day's salary per month, from April 2020 to March 2021, from each employee would be redirected to the fund unless employees who were "unwilling to donate" indicated their unwillingness in writing to their departments.[49] The move was criticised by government employees, who noted that this amounted to 12% of a month's salary for government employees, many of whom could not afford to release the funds.[49] The former Comptroller-General of Defence Accounts stated that the opt-out system left employees vulnerable to professional consequences if they did not donate.[50] Other government employees objected on the grounds that it constricted their ability to choose to donate to other relief funds, such as state's Chief Minister Relief Funds.[51][52] Following public criticism, on 30 April 2020, the Revenue Department amended this circular, making the donation opt-in instead of opt-out, and asking employees to write in if they wished to donate a day's salary every month to the PM CARES Fund.[53]

On 20 April 2020, the Delhi University administration was criticised after funds collected for a donation specifically to the National Disaster Relief Fund were redirected to the Fund without disclosing this to donors. Delhi University officials stated that the funds were redirected on orders from the Ministry of Human Resources Development of the Government of India.[54] The Delhi University Teachers’ Association wrote a letter of objection to the Delhi University administration, noting that the University had traditionally supported the NDRF or Chief Minister’s Relief Fund either through local Staff Associations or through the Vice Chancellor’s Relief Fund, and that the redirection of funds without disclosure constituted a betrayal of trust.[54]

Fraudulent accounts

Immediately after the fund was created, multiple fake accounts were found in circulation. While the original UPI accounts were pmcares@sbi and pmcares@iob, Delhi Police booked an individual for creating a UPI account removing the 's' called pmcare@sbi, intended to scam people.[55] The Press Bureau of India issued a clarification on twitter, confirming its donation information to ensure that funds were not donated to fraudulent accounts.[56]

On 26 April 2020, police in Navi Mumbai registered a criminal case after a person provided funds via the PhonePe following a call soliciting donations to the PM CARES Fund. The call was alleged to be fraudulent.[57]

Existing relief funds

The establishment of the PM CARES Fund has been criticised on the grounds that there already exists the Prime Minister's National Relief Fund (PMNRF), which was established in 1948 to provide relief and assistance to those suffering in times of natural disasters, calamities, and riots.[58][59] In addition to political opposition, the Chief Ministers of several states questioned about the preference for PM CARES over the individual relief funds of each state.[60] The PMNRF is directly managed by the Prime Minister's Office and donations made to it are exempt under the Income Tax Act 1960.[61] It has been utilized since 1948 to provide relief and assistance in several instances.[4] Like the PM CARES Fund, donations to the PMNRF are not transparent and names of donors or amounts of donors are not publicly disclosed or subject to audit.[62] Activists working on transparency and accountability in PMNRF Funds suggested that rather than set up a separate, similar fund, the Government of India could restructure the PMRNF itself, bringing it under parliamentary oversight and disclosing details of funding and spending.[62]

There is also an existing National Disaster Response Fund (NDRF) established under the Disaster Management Act of 2005. In a challenge at the Supreme Court, the Government of India distinguished the PM CARES Fund on the grounds that the NDRF does not accept private donations and is publicly-funded.[63]

Newspaper reports suggest that officials have sought to differentiate the PM CARES Fund from the PMNRF, pointing out that the PM CARES has a defined objective in its trust deed, unlike the general relief aims of the PMNRF, and that the trust deed of the PM CARES Fund allows the Prime Minister to appoint experts as advisors in the allocation of funds.[9] Commentators have also suggested that the reduced oversight on spending in PM CARES Fund allows money to be allocated more quickly, particularly as authorisation processes applicable to government spending are not required.[33] However, specific details concerning the distinction between PM CARES and PMNRF are not clear, as the trust deed and other governing documents for PM CARES have not been publicly disclosed.[4] Legal experts have also argued that a dedicated fund for addresing concerns from the Covid-19 pandemic would be more effective than the PMNRF, which deals with various kinds of disasters and crises.[33] However, the announcement of the PM CARES Fund by Prime Minister Narendra Modi indicated that its use was not limited to the Covid-19 pandemic, noting that the Fund would also cater to future "distressing situations" apart from the Covid-19 pandemic.[64] At the time that the PM CARES Fund was established, the PMNRF had an already existing unspent fund of ₹3800 crores.[4]

Concerns over purchases of ventilators

Two government-appointed clinical evaluations committees have raised concerns, on 16 May 2020 and 1 June 2020, about the procurement of sub-standard ventilators financed by the PM CARES Fund. These ventilators were purchased from Indian medical start-ups, and were flagged by the medical committees as being insufficient to meet the needs of patients suffering from Covid-19, with a recommendation that they should only be used if a back-up ventilator was available in case of failures. One of the suppliers of these ventilators stated that there were no guidelines or standards that they were required to comply with in order to be eligible for government procurement.[41]

In July 2020, Delhi-based Loknayak Hospital raised concerns about the ventilators purchased via PM CARES and provided by the Government of India, noting that the ventilators could not deliver sufficient rates of oxygen and could only be used on 10-15% of their patients.[65] Doctors at the Postgraduate Institute of Medical Education and Research, a medical and research facility in Chandigarh, received 10 ventilators provided by the PM CARES Fund, but declined to use them as they were found to be faulty.[66] The State of Karnataka has stated that it will deploy 640 ventilators obtained with PM CARES Fund, but only after they have been tested to confirm that they meet the specifications.[67]

On 16 July 2020, BJP leader Prabhakar Shinde asked the Municipal Commisioner of Mumbai to take legal action against officials who were not using ventilators donated via PM CARES purchases.[68]

Accountability and transparency

Non-disclosure of information

On 5 June 2020, the Prime Minister's Office stated that the PM CARES fund did not qualify as a public authority for the purposes of the Right to Information Act 2005, and accordingly refused to disclose a copy of the trust deed that established the fund, any government circulars or documents related to the fund, or the exemption certificates granted to it under the Income Tax Act 1960.[69] This order was challenged by appeal, and the Appellate Authority under the Right to Information Act 2005, in the Prime Minister's office again refused to disclose the information.[70] A challenge against these orders is currently pending in the High Court of Delhi.[71]

Exemption from audits

In April 2020, the Prime Minister's Office stated that PM CARES would not be audited by the Comptroller and Auditor General of India, since the PM CARES fund consisted of private donations and not public funds. Officials working with the Comptroller and Auditor General of India stated that they were not allowed to audit the fund, since it was "based on donations of individuals and organisations". The Prime Minister's National Relief Fund, although not official audited by the Comptroller and Auditor General, has complied with audits questioning its spending, such as in the case of the 2013 Uttarakhand floods.[60]

Private audits and issuance of receipts

In response to criticism concerning the lack of audits, accountability and transparency, the Government of India stated on 30 July 2020 that "independent auditors who will be appointed by the trustees" would audit the fund, and that such auditors would be appointed by the trustees of the Fund.[13] The Government of India also agreed to start issuing receipts for donations.[13]

In June 2020, a private firm of chartered accountants, SARC and Associates was reported to have been appointed as auditors for the PM CARES Fund for a period of three years.[5] SARC and Associates has previously audited the PMNRF in 2019, replacing another private firm as its auditor.[72] Sunil Kumar Gupta, the head of SARC and Associates, has acted as an advisor to several government entities in the past.[73] The selection and appointment process for the private auditor has not been made public.[73]

Foreign donations

The PM CARES Fund is exempt from scrutiny and monitoring of all foreign donations, as the provisions of the Foreign Contribution (Regulation) Act have been exempted as far as the Fund is concerned. In April 2020, the Home Ministry of India declined to comment on a pledge of financial support to PM CARES from Russian state-owned defence company, Rosoboronexport, in response to concerns about the departure from India's prior policy of only accepting foreign donations from non-resident Indians, persons of Indian origin, and international organisations.[74] In June 2020, Opposition leaders criticised the Government of India for accepting donations to the PM CARES Fund from Chinese-owned companies, in light of the 2020 China-India skirmishes and the Government of India's bans on Chinese products, including mobile applications.[75] Punjab Chief Minister Amarinder Singh stated that Chinese donations accepted to the PM CARES Fund ought to be returned.[76]

Litigation

The Supreme Court of India dismissed a Public Interest Litigation (PIL) filed by Manohar Lal Sharma for questioning the legality of the constitution of PM CARES Fund for COVID-19 by saying the petition as misconceived in April 2020.[77]

On 14 May 2020, the Bombay High Court sought a response from the Government of India in response to a petition seeking a declaration of the amount of funds received by the PM CARES Fund, and calling on the government to publish details of funds received and spent on the PM CARES website.[78]

On 22 May 2020, Praveen Kumar, a lawyer in Bengaluru, filed a criminal complaint against Sonia Gandhi and other Opposition leaders following tweets by them criticising the Fund on grounds of transparency and accountability. The criminal complaint was registered under provisions of the Indian Penal Code, including Section 153 (relating to provocations with the intent to cause riots) and Section 505(1)(b) (relating to the intent to cause fear or alarm in the public).[79]

On 3 June 2020, the Nagpur Bench of the Bombay High Court issued notice to the Government of India in a petition seeking details of the amounts collected so far in the Fund to fight Covid-19 pandemic and it's audit processes.[80]

On 4 June 2020, the Delhi High Court heard a public interest petition filed, seeking to bring transparency to the PM CARES Fund by making the Right to Information Act 2005 applicable to it.[81]

On 10 June 2020, the Delhi High Court heard a petition filed by Samyak Gangwal, who challenged an order of the Prime Minister's Office refusing to disclose information about the establishment and governance of the Fund under the Right to Information Act 2005. The case is ongoing.[71]

On 17 June 2020, the Delhi High Court dismissed an appeal from a Delhi University professor who challenged a mandatory deduction from his salary to the PM CARES Fund, referring to the petitioner as "stone-hearted". The petitioner had argued that the University ought to have taken the consent of its employees before making the deduction.[82]

In July 2020, the Supreme Court of India heard a petition filed by the Center for Public Interest Litigation, a non-profit organisation, which sought the transfer of funds from PM CARES to the National Disaster Response Force. The Supreme Court heard arguments from both the petitioner and the Government of India, but did not pass an order in the case, reserving its orders for an unspecified future date.[83][84]

See also

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