PM-CARES Fund is a “public charitable trust” to which “anyone can contribute”. It is a “misconception” that contributions received by a public trust like PM-CARES can be transferred to a statutory fund like the National Disaster Relief Fund, the government maintained in the Supreme Court on Monday.
The government was responding to a bunch of petitions, including one from the Centre for Public Interest Litigation (CPIL), represented by senior advocate Dushyant Dave and advocate Prashant Bhushan, to transfer funds from PM-CARES to the National Disaster Relief Fund (NDRF) to help fight the pandemic.
Appearing before a Bench led by Justice Ashok Bhushan, Mr. Dave argued that PM-CARES is not subject to audit by the Comptroller and Auditor General. It is not under “public scrutiny” and contributions to it are “100% tax free”.
Senior advocate Kapil Sibal said corporate contributors are lured to donate to PM-CARES because they can avail of corporate social responsibility (CSR) benefits, which is not possible in the case of donations to States’ funds.
“So, this means corporates will only contribute to PM-CARES,” Mr. Sibal said.
Mr. Mehta objected that NDRF contributions are eligible for CSR benefits.
“The Trust is only there to circumvent the NDRF... It is a fraud on the Constitution. All that we are saying is it should be subject to public scrutiny,” Mr. Dave submitted.
The court reserved the case for judgment.
The court also heard arguments on the need for a specific national plan to battle natural disasters and pandemics. It has reserved orders on this aspect too.
The Union Ministry of Home Affairs (MHA) had already, in an affidavit, defended the existence of PM-CARES fund to receive “voluntary donations” as an entity separate and distinct from the NDRF.
“Mere existence of a statutory fund (NDRF) would not prohibit the creation of a different fund like PM-CARES fund, which provides for voluntary donations... There are several funds established earlier or now for carrying out various relief works. PM-CARES is one such fund with voluntary donations,” the Ministry’s affidavit had said.
It had explained that funds like NDRF, formed under Section 46 of the Disaster Management Act of 2005, are provided for by central and State budgets. These statutory funds do not take private contributions.
