Insights into Editorial: A fund without a care for the RTI – INSIGHTSIAS

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Context:

The Government has recently claimed that the PM CARES Fund is not a public authority.

The manner in which the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund was set up, with its acronym created to publicise the point that the Prime Minister cares for people shows a bypassing of the statutory obligations of a public authority.

It may not be an exaggeration to say that when it comes to seeking answers and information under the Right to Information (RTI) Act, the Prime Minister’s Office (PMO) is consistent in putting up a screen.

 

Background of PM CARES Fund:

  1. In March 2020, the government has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) to deal with any kind of emergency or distress situation like posed by the COVID-19 pandemic.
  2. The Fund is a public charitable trust with the Prime Minister as its Chairman. Other Members include Defence Minister, Home Minister and Finance Minister.
  3. The Fund enables micro-donations as a result of which a large number of people will be able to contribute with the smallest of denominations.
  4. The Fund will strengthen disaster management capacities and encourage research on protecting citizens.

 

Is the PM Cares Fund under RTI?

  1. The Prime Minister’s Office (PMO) has consistently refused to divulge any information about the PM-CARES (Prime Minister’s Citizen Assistance and Relief in Emergency Situations) Fund’s spending, citing that it is not a “public authority” under the Right to Information Act, 2005.
  2. However, file noting accessed by RTI activists show that the Ministry of Corporate Affairs (MCA) had declared that the fund was set up by the Central government on the day the fund was created, thus making it a public authority under the ambit of Section 2(h) of the RTI Act, 2005.
  3. The point is that the PMO operates the Fund, but says it cannot supply any information about the PM CARES Fund because it is not a public authority.
  4. The PMO completely glosses over the fact that the PMO is a public authority and has to give us answers about the fund under the RTI.

 

Affidavit filed in Delhi High court:

  1. The PM CARES Fund page lists its structure, functions and duties in an arbitrary manner.
  2. The official appeals for funds are made under the emblem of the Saranath lions and ‘Satyameva Jayathe’, which means “Truth Alone Triumphs”.
  3. Therefore, the recent affidavit, where the Delhi High Court was informed that “the PM CARES Fund is not a Government of India fund and that the amount collected by it does not go to the Consolidated Fund of India”, is strange.
  4. The affidavit was filed by an Under Secretary at the Prime Minister’s Office (PMO), who added that the trust functions with transparency.
  5. The most significant lie of this sworn statement is that the Government has no control over the Fund.

 

Critics arguments regarding PM CARES Fund:

  1. A statutorily constituted National Disaster Response Fund (NDRF), which was established under the Disaster Management (DM) Act of 2005, is deliberately ignored while a new, controversial, unanswerable, and ‘non-accountable’ vehicle, PM CARES Fund had created; its character is not spelt out till today.
  2. The NDRF is mandated to be accountable, and answerable under the RTI Act, being a public authority, and auditable by the Comptroller and Auditor General of India.
  3. The Government seems to consider statutory provisions for enquiry and information seeking to be embarrassing obstacles.
  4. The DM Act provided for a Disaster Response Fund, state and district level funds (besides the national level) and also to collect and use the donations at the local level, with mandatory transparency and audit provisions.
  5. The PM CARES Fund centralises the collection of donations and its utility, which is not only against the federal character but also practically inconvenient.
  6. In January 1948, the Prime Minister’s National Relief Fund (PMNRF) was established with public contributions to assist displaced persons from Pakistan.
  7. The resources, are now utilised primarily to render immediate relief to families of those killed in natural calamities and to the victims of the major accidents and riots.
  8. The fund is recognised as a Trust under the Income-Tax Act and the same is managed by the Prime Minister or multiple delegates for national causes.
  9. The PMNRF has the President of India and the Leader of Opposition also as trustees. The Centre now considers it as another obstacle and has created a new trust with the Prime Minister and his Ministers only.
  10. Both funds, the NDRF and the PMNRF, have been relegated to the back burner, the PM CARES Fund is in the limelight.
  11. It has been created not by law, not by notification, but by the mere creation of a webpage, and set up last year in March to raise funds for those affected by the COVID-19 pandemic.

 

Funding Avenues and Tax Exemptions:

  1. The mere grant of certain tax exemptions with regard to the voluntary donations made to a public trust is not a determinative factor for the purpose of Section 2(h) of the RTI Act.
  2. An ordinance was promulgated to amend Income Tax Act, 1961 and declare that the donations to the PM CARES Fund “would qualify for 80G benefits for 100% exemption”.
  3. The official website and the Press Information Bureau also declared that donations to the PM CARES Fund “would qualify for 80G benefits for 100% exemption under the Income Tax Act, 1961.
  4. Donations to PM CARES Fund will also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013.
  5. PM CARES Fund has also got exemption under the FCRA [Foreign Contribution Regulation Act] and a separate account for receiving foreign donations has been opened”. All this amounts to substantive funding.
  6. Section 19 of the Indian Trusts Act mandates the trustees to present full and accurate information of the amount and state of the trust property to the beneficiaries.
  7. The claim that the PM CARES Fund is not a public authority is absurd to say the least.

 

Conclusion:

By agreeing that it is a public trust managed by the Prime Minister and three Ministers in their ex-officio capacity, the Government cannot say that it was irrelevant to declare it as a public authority.

The Prime Minister and the Ministers do not take decisions in their personal capacity. They have to work to implement the objectives of the trust.

The PM openly seeks support for donations towards PM CARES. But given the non-transparent nature of this fund, it needs to be closely scrutinized.

At the very least, RTI requests that seek to understand how funds are being received and how they are being disbursed so far should be seen as legitimate.

Also, more needs to be done by the government to publicise donations to the more accountable NDRF which allows for a transfer of funds to States.

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