Opacity around PM’s disaster war chest

The Supreme Court needs to rule without delay on the constitutional validity of the Centre’s action in creating a trust which bears the Prime Minister’s name but is outside the government’s financial system to raise and disburse money for disaster relief.

Since Jawaharlal Nehru’s time, there has existed a mechanism within the government, named the Prime Minister’s National Relief Fund (PMNRF), for this purpose. It also provides assistance for expensive cancer treatment, kidney transplant, heart surgery etc.

The Disaster Management Act (DMA), enacted by the Manmohan Singh government in 2005, created another mechanism, also within the government, named the National Disaster Response Fund (NDRF), specifically to help disaster victims.

Last March, as state governments were declaring lockdowns and taking other measures to contain the coronavirus, Prime Minister Narendra Modi brought the fight against the pandemic under the Centre’s control by invoking the DMA and declaring a 21-day nationwide lockdown.

Three days later the Centre announced the setting up of a new entity, styled as the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, described as a war chest to deal with emergencies like the coronavirus attack.

 The government conveniently shortened the name as PM CARES Fund.  

Although created by the government, PM Cares Fund (which we may further shorten as PMCF), unlike the pre-existing funds, is outside the government and, therefore, beyond scrutiny by the Comptroller and Auditor General (CAG), a constitutional authority.

The Prime Minister is ex-officio chairman of PMCF. Ministers in charge of Home Affairs, Defence and Finance are its ex-officio members. It also has three non-official members, all of whom are nominated by the Prime Minister.

A crucial difference between PMCF and PMNRF lies in the way the non-official members are chosen. The non-official members of PMNRF are the President of the Indian National Congress, a representative of industry and commerce and another of the Tata Trusts. This is clearly an anachronism.

The government could have overcome that problem by changing its composition to bring it in tune with current realities.

The PMCF scheme suffers from two grave weaknesses. One is lack of transparency. The other is exclusion of parliamentary scrutiny. The PMCF website solicits donations but does not say how much has been collected so far and how much has been spent on what.

IndiaSpend, which collates information available in the public domain, found that within 52 days of inception PMCF received no less than Rs 96.78 billion, not counting pledges. This was about 25 times PMNRF’s receipts.

It has also come to light that many companies are diverting to PMCF the money the law requires them to spend to fullfill corporate social responsibility.

The Caravan magazine, in an investigative story, reported that before mid-May the Centre had prepared a list of organisations entitled to receive funds for coronavirus relief work and that it includes 736 affiliates of the Rashtriya Swayamsevak Sangh, the ruling Bharatiya Janata Party’s ideological mentor.  

PMCF functions from the Prime Minister’s office. But PMO says it is not a public office and does not come within the purview of the Right to Information Act.

Last week, BJP members foiled an attempt by Adhir Ranjan Chaudhury, Leader of the Congress party in the Lok Sabha, who is also Chairman of Parliament’s Public Accounts Committee (PAC), to initiate a scrutiny of the PMCF scheme, along with the Centre’s handling of the coronavirus problem.

The PAC, headed by an Opposition member, is charged with the task of examining the government’s spending in the light of the CAG’s reports. BJP members, who have a majority in the PAC, said it was not competent to go into matters concerning the PMCF which is outside the purview of the CAG.

The ruling party having made it clear that it will not permit parliamentary scrutiny of matters relating to PMCF, the Judiciary alone can take corrective steps.

Within a fortnight of the creation of PMCF, ML Sharma, an advocate, had approached the Supreme Court with a petition questioning the constitutionality of the government’s action.  A bench headed by Chief Justice SA Bobde dismissed it at the threshold, saying it was misconceived.

Another petition filed by the Centre for Public Litigation, an NGO founded by the late Justice VM Tarkunde, is now before another bench headed by Justice Ashok Bhushan.

Rejecting the Solicitor General’s objections, the bench issued a notice to the government seeking its response. The government, in its reply, has defended its action but has not cited any reasons for creating a body outside the government when two bodies within it were available.