Knowledge Nugget: PMO cites parliamentary rules to bar questions on PM CARES, PM NRF and defence funds; what are these funds?

2. Under the stipulated conditions that govern the right to ask questions in the Lok Sabha, Rule 41(2) (viii) states that “it shall not relate to a matter which is not primarily the concern of the Government of India”. Rule 41(2) (xvii) states “it shall not raise matters that are under the control of bodies or persons not primarily responsible to the Government of India”.

3. The reasoning for questions and matters not being admissible in Lok Sabha given by the PMO, it is learnt, was that the corpus of these funds is constituted entirely with voluntary public contribution and not from any allocation out of the Consolidated Fund of India.

Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)

1. The PM CARES fund was set up on March 27, 2020, following the Covid outbreak with the primary objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 pandemic, and to provide relief to the affected.

2. PM CARES Fund has been registered as a Public Charitable Trust. The trust deed of PM CARES Fund has been registered under the Registration Act, 1908 at New Delhi on 27th March, 2020.

3. Prime Minister is the ex-officio Chairman of the PM CARES Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.

4. The fund consists entirely of voluntary contributions from individuals/organizations and does not get any budgetary support.

5. The Fund’s website states: “Donations to PM CARES Fund would qualify for 80G benefits for 100% exemption under the Income Tax Act, 1961. Donations to the PM CARES Fund will also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013.”

6. PM CARES Fund has also got exemption under the FCRA and a separate account for receiving foreign donations has been opened. This enables PM CARES Fund to accept donations and contributions from individuals and organizations based in foreign countries.

7. PM CARES Fund is audited by an independent auditor. Notably, there is no statutory period prescribed for audit of the PM CARES under Income Tax Act. However, audit will be conducted at the end of the Financial Year.

Prime Minister’s National Relief Fund (PMNRF)

1. The PMNRF was established in January 1948 with public contributions to assist displaced persons from Pakistan. 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.

2. The fund consists entirely of public contributions and does not get any budgetary support. The corpus of the fund is invested with banks in fixed deposits. Disbursements are made with the approval of the Prime Minister.

3. PMNRF has not been constituted by the Parliament. The fund is recognized as a Trust under the Income Tax Act. PMNRF operates from the Prime Minister’s Office and does not pays any license fee.

4. The Prime Minister is the Chairman of PMNRF and is assisted by Officers/ Staff on an honorary basis.

5. PMNRF is exempt under Income Tax Act, 1961 under Section 10 and 139 for return purposes. Contributions towards PMNRF are notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961.

6. The Fund’s website states: “PMNRF accepts only voluntary donations by individuals and institutions. Contributions flowing out of budgetary sources of Government or from the balance sheets of the public sector undertakings are not accepted. Conditional contributions, where the donor specifically mentions that the amount is meant for a particular purpose, are not accepted in the Fund.”

National Defence Fund (NDF)

1. The NDF is used for the welfare of members of the Armed Forces, including paramilitary forces, and their dependents. The fund is administered by an Executive Committee, with the PM as Chairperson, and Defence, Finance and Home Ministers as Members, according to its official website.

2. The Finance Minister is the Treasurer of the Fund and the Joint Secretary, PMO dealing with the subject is Secretary of the Executive Committee.

3. Accounts of the Fund are kept with the Reserve Bank of India. The fund is entirely dependent on voluntary contributions from the public and does not get any budgetary support.

FYI: What the Supreme Court has earlier said-

1. On August 18, 2020, the Supreme Court had “refused” to order transfer of funds from the PM CARES Fund to the National Disaster Response Fund (NDRF), saying they “are two entirely different funds with different object and purpose” and “there is no occasion” for such a direction.

2. The apex court had also said guidelines specifically provide for audit of the NDRF by the Comptroller & Auditor General of India, but PM CARES Fund is a public charitable trust due to which “there is no occasion” for such an audit.

BEYOND THE NUGGET: Constitutional Funds of India-Consolidated Fund, Contingency Fund and Public Account

1. Consolidated Fund of India (CFI): Article 266 of the Constitution of India contains provisions relating to the CFI. It is made up of all of the Union Government’s revenues, loans, and receipts from loan recoveries. All Union Government expenditure is incurred through the CFI, and no funds can be drawn from the CFI without prior authorisation from Parliament.

2. Contingency Fund of India: Article 267 of the Constitution of India provides for a Contingency Fund of India that is placed at the disposal of the President of India to facilitate meeting of urgent unforeseen expenditure by the Government pending authorization from the Parliament. The corpus of the Contingency Fund as authorized by Parliament presently stands at 30,000 crore.

3. Public Account of India: It draws its existence from Article 266 of the Constitution of India. Public Account funds do not require Parliamentary authorisation for withdrawals. The approval of the Parliament is obtained when amounts are withdrawn from the Consolidated Fund and kept in the Public Account for expenditure on specific objects.

Post Read Question

Consider the following statements with reference to the PM CARES Fund:

1. It has been registered as a Public Charitable Trust

2. It receives budgetary support from the Consolidated Fund of India.

3. Donations to the fund qualify as CSR expenditure under the Companies Act, 2013.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

(Sources: pmcares.gov.in, pmindia.gov.in, Exclusive | Citing rules, PMO tells Lok Sabha Secretariat: No questions on PM CARES, relief and defence funds, UPSC Issue at a Glance | Decoding Union Budget)

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