A group of former civil servants on Saturday raised questions on the transparency of the PM-CARES fund and the Centre’s refusal to divulge details about it by saying that it was not a public authority under the ambit of the Right to Information Act. The group made the statement in an open letter addressed to Prime Minister Narendra Modi. It was signed by 100 former bureaucrats, including Harsh Mander, AS Daulat, Sajjad Hassan and Anita Agnihotri.
In the letter, the group wondered why the prime minister, the home minister, the defence minister and the finance minister were trustees of the fund in their official capacity instead of as private citizens if the fund was not a public authority.
The PM-CARES, or the Prime Minister’s Citizen Assistance and Relief in Emergency Situations, fund was established with the stated objective of being a “dedicated national fund” to deal with “any kind of emergency or distress situation” in the aftermath of the coronavirus pandemic. Public sector firms, the armed forces and banks have contributed crores of rupees to the fund.
The former bureaucrats also asked if the donations to PM-CARES fund should be eligible as Corporate Social Responsibility expenditure if it was a private trust. The letter cited a March 2020 government circular clarifying that contributions to the fund will qualify as CSR expenditure. The letter added that the donations could not be “legitimate CSR expenditure” had it not been set up by the Centre.
“The question that then arises is whether the circular of 28 March, 2020, is legally deficient, more particularly when the Ministry of Corporate Affairs issues a gazette notification on 26 May, 2020, to include this fund in Schedule VII under Section 135 of the Companies Act as eligible to receive CSR funds with retrospective effect from 28 March 2020,” it said, adding that the PM-CARES entry came after “Prime Minister’s National Relief Fund (PMNRF)” in the Schedule.
“Why was the new fund necessary when the nation already had a fund for national relief?” the former bureaucrats asked.
The group also raised questions on the huge amount of funds coming from the public sector when the trust deed of PM-CARES says that it is not “controlled or substantially financed by any government or any instrumentality of the government”. The bureaucrats asked why Prime Minister Narendra Modi urged embassies to seek funds from abroad.
“Most certainly, the fact that you and other senior Ministers of Government handling sensitive portfolios are trustees would ensure a substantial flow of funds,” it said. “Also, contributions are being solicited by government officials from private citizens.” The letter cited the then secretary of the Ministry of Corporate Affairs seeking contributions from the Institute of Chartered Accountants.
The group said that the Supreme Court in its 2019 ruling had said that trusts, societies and non-government organisations that get “substantial government financing” would be treated as “public authorities” under the RTI Act. It said that the fund received “substantial government funding” evident from the wages of employees of public companies, including that of defence forces, and other government and semi-government organisations.
“There is a clear absence of transparency in every aspect of PM-CARES. Neither details of donors and amounts received nor details of expenditures incurred are in the public domain. This opacity is disturbing as the state governments handling the COVID-19 challenge were, and continue to be, sorely in need of financial assistance.”— Former civil servants
The former bureaucrats said that it is necessary – for reasons of probity and adherence to standards of public accountability – that the financial details of receipts and expenditures are made available in order to avoid doubts of wrongdoing.
“It is essential that the position and stature of the Prime Minister is kept intact by ensuring total transparency in all dealings the Prime Minister is associated with,” the letter said.
The controversy over PM-CARES’ ownership had erupted in December after the fund’s trust deed was made public. A clause in the document called the fund a private entity, exempting it from RTI scrutiny. The government had then said in response to an RTI query that PM-CARES was a body “owned and established” by the government. This contradicted the government’s earlier claim that that the fund was private.
The fund has been registered with the revenue department of Delhi, with the prime minister as chairperson and senior ministers as trustees. Opposition parties have repeatedly raised questions about the fund’s transparency, and have questioned the need to create the reserve when Prime Minister’s National Relief Fund already existed.