PM-CARES vs PMNRF: A needless controversy

The recent, needless, CSR related controversy pertaining to PM-CARES fund is the work of idle minds, who are clearly rattled by the excellent response to this fund, cutting across people from different sections of the society and political ideologies. The ministry of corporate affairs has clarified that any company’s contributions to the PM-CARES fund, over and above the minimum prescribed corporate social responsibility (CSR) spends, can be offset, against that company's CSR obligations of subsequent years.

Firms with a net worth of Rs 500 crore or revenue of Rs 1,000 crore or a net profit of Rs 5 crore, should spend at least 2% of the profit on CSR as per the Companies Act, 2013. Further, any contribution made to the PM-CARES Fund before March 31st, 2020, would qualify for 80G exemption under the Income Tax Act, 1961 (I-T Act). Section 80G of the I-T Act allows donations made to specified relief funds and charitable institutions, as a deduction from gross total income, before arriving at taxable income.

The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) was created by Prime Minister Narendra Modi, on March 28th, 2020, to enable citizens to contribute to the government’s containment and relief efforts against the COVID-19 outbreak, specifically speaking. The next day, on 29th March 2020, the corporate affairs ministry issued a statement that companies could contribute to the fund and these will be counted towards their CSR obligations. For contributions made with effect from April 1st, 2020, only those companies that have chosen to stay within the old tax structure would be eligible for this benefit, the ministry said.

Last year, while announcing the corporate tax cut of 8% amounting to over Rs 1.50 lakh crore, the government had said that companies can either choose to forgo their various exemptions and move to the lower and simplified tax structure or stay within the old framework. The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) fund, which is a dedicated national fund with the primary objective of dealing with the Coronavirus pandemic, has been opened up for donations from abroad too, after it was exempted from the Foreign Contribution Regulation Act (FCRA). The foreign donors can now download donation receipts directly from the PM-CARES portal and can now accept donations from individuals and organizations based in foreign countries through foreign credit/debit cards and through wire transfer/SWIFT. To this purpose, a separate bank account has been opened. 

Further, the government has stated that the PM-CARES fund will be audited by one or more qualified independent auditors who will be appointed by the trustees, including the Prime Minister himself. Hence claims from opposition leaders like Sonia Gandhi and West Bengal CM, Mamata Banerjee, that this fund lacks transparency, is a completely baseless allegation, aimed at creating unnecessary confusion in the minds of people, when they are rallying strongly behind PM Modi, as he leads both India and the world, in the biggest fight in a 100 years--the fight against the Wuhan Chinese virus, or the Coronavirus pandemic, as it is widely known.

In a letter to Prime Minister Narendra Modi, Congress president Sonia Gandhi had expressed reservations over the PM-CARES fund and had demanded that all money under the PM-CARES fund should be transferred to the Prime Minister’s National Relief Fund (PMNRF) to “ensure efficiency, transparency, accountability, and audit”. She had termed the new fund as a “waste of effort and resources”, to create two separate silos for distribution of funds. It is pertinent to note that the PMNRF had a management committee that oversaw how the funds are employed. While the current Prime Minister has the discretion, the PMNRF committee, when it was set up by late PM, Jawaharlal Nehru, included the President of the Congress party also, in the management committee, for inexplicable reasons. Hence, Sonia Gandhi's misplaced ire and angst at being left out from the management of PM-CARES fund as also, her allegations, are simply a figment of her imagination. The PM-CARES fund is absolutely transparent, is raising money for a very specific purpose and more importantly, will be thoroughly audited.

PMNRF was initially established as a deemed trust, to assist displaced persons from Pakistan through public contributions. Assistance from PMNRF is also rendered to partially defray the expenses for medical treatment like heart surgeries, kidney transplantation, cancer treatment, acid attacks, etc. However, with the launch of  Ayushman Bharat, the biggest healthcare scheme globally, such needs would be minimised.PMNRF still has remnants of the decrepit Nehruvian ideology associated with it.

The Modi government's initiative of setting up a separate PM-CARES fund, on the other hand, is bereft of any dynastic or "high command" style culture. It is completely within the bounds of law and additionally, it will not have the overarching hand/interference from the Congress party, whose track record in any case, in the past six decades of governance, has been rather dubious, abysmal and, opaque. Congress leaders had also asked why the corporate contributions to various chief minister (CM) relief funds are not eligible for exemptions, under Corporate Social Responsibility (CSR). Interestingly, the issues raised by most Congress chief ministers regarding the CSR donations, are an outcome of a law (Companies Act) passed by the Congress-led UPA Government in July 2013, under which any relief fund set up by state governments, were omitted from the list of ‘eligible funds’ which could receive CSR donations. 

Today, in hindsight, for the Left parties and the Congress, to now demand that donations to CM relief funds be included in CSR donations, is, therefore, a demand that is not backed either by legalities, facts, or past convention. Plus, it would need an amendment to the Companies Act 2013, which is not feasible nor even necessary, at this stage. The Modi government has also clarified that the contribution of funds to the state disaster management authority (SDMA), for combating the Coronavirus, shall be counted as CSR expenditure and hence companies can make CSR contributions to any state government for fighting the epidemic, through the disaster management authority route. Hence, this futile controversy of trying to seek donations via CSR under CM relief fund, by Congress CMs or the TMC or the "Left", merits no attention. On the contrary, the question one should be asking state governments is, why are some states complaining and politicising this entire issue? Why cannot they ask corporates to contribute to the SDMA and, claim the desired CSR benefits?

In the face of the Wuhan Coronavirus, Prime Minister Narendra Modi launched the PM-CARES fund, where he selflessly invited public contributions to fight the pandemic. The PM CARES fund, set up as a public charitable trust, is an emergency fund that was set up to provide relief to those affected by the Wuhan Coronavirus. The Prime Minister is the chairman of this trust and its members include the Defence Minister, Home Minister and Finance Minister. Meanwhile, the PM-CARES fund will also have up to 13 eminent experts to undertake relief or assistance of any kind relating to a public health emergency, including the creation and up-gradation of healthcare facilities. It is notable here that with open-hearted donations from the public, corporates, and celebrities, the very inclusive  PM-CARES fund, had collected over Rs 6500 crore with a few days of its launch. That number is only growing with each passing day, as the society realises it is a stakeholder in the fight against Coronavirus, much like the political leadership.

Had PM-CARES fund not been eligible for CSR related exemptions, the amount collected may have been far lesser. Had there not been a separate fund and had all donations been routed via say, the PMNRF, the focussed fight against Coronavirus would have been significantly diluted. Hence, Prime Minister Narendra Modi's clarion call for voluntary contributions to the PM-CARES fund, with zero interference/representation from the Congress party, is a step that was much needed in these challenging times, when every penny must reach those, whom it is ideally meant for.

Since the commencement of the lockdown in India,32.32 crore beneficiaries, to date, have directly received monies in their bank accounts, amounting to an overall sum of Rs 29352 crore, via the direct benefit transfer (DBT) scheme. Rs 9930 crore has been disbursed to 19.86 crore women, "Jan Dhan" account holders. 97.8 lakh free cylinders have been given to beneficiaries under the "Pradhan Mantri Ujjwala Yojana", while 5.29 crore poor people have already received free ration under the "Pradhan Mantri Garib Kalyan Ann Yojana".Rs 1400 crore has been disbursed to 2.82 crores disabled, widows and old age persons, while 2.17 crore building and construction workers have already received financial support to the tune of Rs 3071 crore. Rs 14946 crore has been disbursed to 7.47 crore farmers, under the PM-KISAN scheme, during the lockdown. 2.1 lakh EPFO members have already availed online withdrawal of a sum of Rs 510 crore so far. In effect, besides the Union government's efforts on a war footing, every penny contributed to PM-CARES fund, is being utilised to better the lives of those who are at the highest risk, financially and otherwise.

To cut to the chase, be it the "Janta Curfew" on 22nd March 2020 and the "taalis" and clanging of "thaalis", the India lockdown starting from 12 am on 25th March 2020, or the lighting of "diyas" and "mombattis", on 5th April 2020, India's 1.37 billion people have rallied around Prime Minister Narendra Modi, in an exemplary show of resolve, restraint, and unity, to ensure "Jaan Bhi Jahaan Bhi", is a workable dictum. The PM-CARES fund, Modi's brainchild, unarguably, lends wings to this unfettered fight against COVID-19, even as the world marvels at India's ability to restrict collateral damage from the pandemic, to a bare minimum.

Ms Sanju Verma is an Economist,Chief Spokesperson of BJP Mumbai and, Author of the Bestseller, " Truth & Dare--The Modi Dynamic".