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GS-II : Governance

Need for transparency: On PM CARES Fund

  • 20 August, 2020

  • 5 Min Read

Need for transparency: On PM CARES Fund


  • The Supreme Court has rejected a writ petition calling for a funds diversion from this PM CARES to the National Disaster Response Fund (NDRF) and also denied the petitioners’ demand that the “public charitable trust” be audited by the CAG, questions remain about its need, operation and its persisting lack of transparency.

Supreme Court’s decision

  • A three-judge Bench asserted that no exception could be taken to the constitution of yet another public charitable trust at a time of a raging COVID-19 pandemic.
  • But the need for a fresh trust when there is the PM’s National Relief Fund (PMNRF) with a substantial corpus in place is not clear.
  • Since the PM CARES Fund existed independent of budgetary support or government money, the Court’s reasoning was that there was “no occasion” for a CAG audit.
  • However, the concern is not about the legal basis or the absence of a CAG audit, or whether it is superfluous or indeed essential.
  • As responses to RTI queries on the Fund reveal, the government is not forthcoming on questions on its transparency or accountability.

Lack of transparency

  • Queries on the trust deed for the Fund, and its creation and operation have been summarily dismissed by arguing that the Fund was not a “public authority” even though the PM is its ex-officio chairman and three Cabinet ministers are its trustees.
  • And, the Ministry of Corporate Affairs had also treated it as a fund set up by the Centre.
  • Since the trust was created, lakhs of public and private sector employees have donated a day’s salary to it, with some of them claiming that this deduction was done without their explicit consent.
  • Many public sector units and corporate entities too have made donations because of a proviso allowing uncapped corporate donations that would qualify as corporate social responsibility (CSR) expenditure.
  • Earlier, a government panel had rightly suggested that the double benefit of tax exemption would be a “regressive incentive”.
  • Thus far, the exact amount of donations and a clear break-up of the expenditure from the fund have not been provided apart from an announcement in May that ?3,100 crore had been sanctioned from it to be spent on ventilators, migrant worker welfare and vaccine development.
  • States have led the response to COVID-19 and their resources have increasingly been stretched by the continuing rise in infections and deaths, which have crossed the 2.8 million and 54,000 mark, respectively.


  • 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.

Source: TH

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