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PM CARES FUND and PM NATIONAL RELIEF FUND

TOPIC:GS PAPER-2;GOVERNMENT POLICIES AND INTERVENTIONS

Why in News: In light of the institution of new PM-CARES fund, this article explores the two funds in the name of the Prime Minister.

Background:
• Towards the end of March, Prime Minister Narendra Modi instituted a new PM-CARES Fund, on popular demand, to help fight the novel corona virus.
• There is another fund which exists under the name of the Prime Minister – the Prime Minister’s National Relief Fund (PMNRF).

PM-CARES Fund
• As India’s fight against Covid-19 started picking pace, people from all walks of life wrote to the PM expressing their desire to donate to India’s war against COVID-19.
• Respecting that spirit, the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund has been constituted.
• PM-CARES Fund was set up as a public charitable trust.

Management of the fund
• The Prime Minister chairs the fund in his official capacity, and can nominate three eminent persons in relevant fields to the Board of Trustees.
• The Ministers of Defence, Home Affairs and Finance are ex-officio Trustees of the Fund.

How it will be used
• PM said that the fund will go a long way in creating a healthier India. He said it will also strengthen disaster management capacities and encourage research on protecting citizens.
• The fund will also cater to similar distressing situations if they occur in the times ahead.

Voluntary contributions
• The fund receives voluntary contributions from individuals and organisations and does not get any budgetary support.
• Donations have been made tax-exempt.
• The fund accepts micro-donations also.
• It is also exempt from the Foreign Contribution (Regulation) Act, 2010, and accepts foreign contributions.

CSR funds can be sent to PM-CARES
• The ministry of corporate affairs (MCA) said that donations to PM-CARES will qualify as corporate social responsibility (CSR) spending that companies are mandated to make under the Companies Act 2013.
• The ministry of corporate affairs (MCA) had recently clarified that firms could spend their CSR funds to fight the corona virus disease, which has been notified as a disaster.

Prime Minister’s National Relief Fund (PMNRF)
• The Prime Minister’s National Relief Fund (PMNRF) was set up in January 1948, originally to accept public contributions for the assistance of Partition refugees.
• It is now used to provide immediate relief to the families of those affected by natural and man-made disasters.
• Natural disasters covered under this include flood, cyclone, earthquake etc.
• Man-made disasters include major accidents, acid attacks, riots etc.
• PMNRF accepts voluntary contributions from Individuals, Organizations, Trusts, Companies and Institutions etc.
• Conditional contributions, where the donor specifically mentions that the amount is meant for a particular purpose, are not accepted in the fund.
• All contributions towards PMNRF are exempt from Income Tax under section 80(G).
• PMNRF has also received foreign contributions as a public trust since 2011.
• As of December 2019, the PMNRF had an unspent balance of Rs 3,800 crore in its corpus.
• The PMNRF provides annual donation and expenditure information but without any detailed break-up.

Management of the fund
• The PMNRF was initially managed by a committee which included the Prime Minister, the Finance Minister, and the Congress President, a representative of the Tata Trustees and an industry representative.
• However, in 1985, the committee entrusted the entire management of the fund to the Prime Minister.
• Currently, the Prime Minister has the sole discretion for fund disbursal. A joint secretary in the PMO administers the fund on an honorary basis.

Objections to the PM-CARES fund:

1.Necessity- Opposition leaders have questioned the need for a new PM CARES Fund, given that the PMNRF has similar objectives.•States also have similar Chief Minister’s Relief Funds, and State governments have appealed for donations noting that they bear the major burden of implementing COVID-19 relief operations.

2.Transparency-It is not clear whether the fund comes under the ambit of the RTI Act or oversight by the Comptroller and Auditor General of India, although independent auditors will audit the fund.The PM CARES web page is opaque regarding the amount of money collected so far, names of donors, the expenditure of the fund so far, or names of beneficiaries.

3.Receiving of CSR funds
• PM-CARES can receive uncapped corporate donations as CSR expenditure.
• Some opponents say that this goes against previous guidelines stating that CSR should not be used to fund government schemes.
• Such a facility has not been provided to PMNRF or the CM’s Relief Funds, and they cannot receive CSR funds.

Why government has then set up this separate fund?
• Specific purpose: While PMNRF is for all kinds of natural disasters, PM CARES fund is specially meant for COVID-19 similar pandemic situations.
• Popular demand: The Prime Minister’s office was receiving spontaneous and innumerable requests for making generous donations to support the government in the wake of Covid-19 emergency.
• Ease of access: Any spending from the Consolidated Fund of India needs to be passed by the Parliament; therefore, creation of a donation-based fund means that legislature hurdle is taken care of.
• More contributions: A separate fund for COVID-19 relief would encourage more people to contribute in the fund because everyone is impacted by Corona virus outbreak.
• Micro-donations: The PM CARES Fund tries to differentiate itself from PMNRF by enabling micro-donations. One can donate as low as Rs 10 in the PM CARES Fund, while the minimum one can donate in PM National Relief Fund is Rs 100.

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