When PMNRF already existed what was the need of PMCARES Fund?

On March 28 March 2020, Prime Minister Narendra Modi announced the creation of a Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES). The Fund will cater to situations of distress like the ones created by the present COVID-19 pandemic and similar emergency situations. However, the PMNRF already exists for a similar purpose. Why the need for a new institution with the same purpose?

First lets us know about the PMNRF

In the wake of the Partition of India, Prime Minister Jawaharlal Nehru concurred that a collective effort was required to help those displaced by the partition. Hence, a national fund was set up that could be used to help people suffering from any disaster with special focus to help the refugees from Pakistan.  This was known as the Prime Minister’s National Relief Fund. Established in 1948 even before the Constitution came into force. It is important to remember that the PMNRF is not constituted by the Parliament.

The resources of the PMNRF are now utilized primarily to render immediate relief to families of those killed in natural calamities like floods, cyclones and earthquakes, etc. and to the victims of the major accidents and riots.

Composition:

When the Fund was constituted, the following people were included in the managing committee of the PMNRF viz., the Prime Minister, President of the India National Congress, Deputy Prime Minister, Finance Minister, a representative each of Tata Trustees and of Industry & Commerce to be chosen by FICCI.

Other features:

• PMNRF is recognized as a Trust under the Income Tax Act.
• It accepts only voluntary donations by individuals and institutions. Made up entirely of public donations, the Fund is not supported by any budgetary allowance.
• The Prime Minister is the chairman of the Fund.
• Contributions to the Fund qualify as CSR spent of the companies.
• It is exempt under the Income Tax Act 1961 with respect to filing of returns.

Contribution of PMNRF till now

PMNRF has played an active role in mitigating the impact of disasters and rebuilding human lives. Over the years, it has consistently funded the medical treatment of those in need along with providing aid in situations of ethnic conflict and violence. It has made significant contribution in dealing with natural disasters specifically over the years.

• In 2009, crores of rupees were disbursed for rehabilitating victims of the Cyclone Aila in the coastal states of Odisha and West Bengal.
• In 2013, an amount of Rs 60 crore was disbursed to the Himalayan state of Uttarakhand after it was ravaged by deadly floods.
• In 2014, when Kashmir was devastated by floods, Rs 258 crore was sanctioned from PMNRF. Compensation has also been paid to victims of various tragedies ranging bus accidents in Nepal, victims of stampedes in Kumbh, riot victims in Muzaffarnagar, burn victims in Sivakasi cracker factory to families of security personnel massacred by Naxals in Chhattisgarh.

Now coming on to the PM CARES fund

The PM CARES, or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund has been set up as a public charitable trust. It will function as an emergency fund to provide relief to those affected by the Coronavirus.  

Composition:

The Prime Minister is the chairman of this trust and the board of trustees also include Defence Minister, Home Minister and Finance Minister in an ex-officio capacity. The PM is empowered to nominate three people to the board of trustees who shall be eminent persons in the field of research, health, science, social work, law, public administration and philanthropy. The new institution also has a provision to set up an advisory board of not more than 10 persons — selected by the trustees from among the medical practitioners, healthcare professionals, academicians, economists and lawyers.

Objectives of the PM CARES:

include undertaking and supporting relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress either man-made or natural, including the creation or up-gradation of healthcare or pharmaceutical facilities, other necessary infrastructure, funding relevant research or any other type of support.

As per the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 issued by Finance Ministry on 31 March 2020, donations made to ‘PM CARES’ fund would be 100% tax exempt under Section 80(G).

Why PMCARES is an old wine in a new bottle?

PMNRF was launched in 1948, with the objective of mitigating the miseries of the refugees from Pakistan and providing for their relief and rehabilitation.      PMCARES also aims to mitigate the consequences of untold disasters and consequent human flights to escape misery and destitution due to the Coronavirus pandemic.

Why PMCARES is more democratic?

As envisaged by PM Nehru, PMNRF was governed by a managing committee that also consisted of a representative from India’s private business sector. Since 1985, under the Rajiv Gandhi government, the management of the fund was entrusted entirely with the PMO.  Since then, the PM has had the sole discretion of appointing a secretary to manage the fund. The criterion for disbursement of money and selection of beneficiaries is purely at the ‘discretion of the PM and in accordance with the PM’s directions.’

On the other hand, PM CARES delegates that power of deliberation and decision-making by including other ministers on board – Home Minister, Defence Minister and Finance Minister as members. As chairman of the PM CARES trust, the Prime Minister retains the responsibility of sanctioning and approving his ministers’ recommendations; but unlike PMNRF, he is not the proverbial ‘judge, jury and executioner.’

Issue of transparency

Both PMNRF and PMCARES fail on account of transparency as neither of the two institutions disclose the identities of their donors and beneficiaries. While the modalities and operational framework of PM CARES are yet unknown, PMNRF over the years has not been allowed to be audited by Comptroller and Auditor General (CAG) of India.

We hope this cleared your quriosity towards the question posed in the heading 🙂