NDRF Vs PM-CARES

Subject: Government policy/ schemes

Context:

The Supreme Court reserved its order on a plea that seeks money collected under the PM CARES Fund for the COVID-19 pandemic should be transferred to the National Disaster Response Fund (NDRF).

Concept:

NDRF

• The National Disaster Response Fund (NDRF), constituted under Section 46 of the Disaster Management Act, 2005, supplements SDRF of a State, in case of a disaster of severe nature, provided adequate funds are not available in SDRF.
• It is a fund managed by the Central Government for meeting the expenses for emergency response, relief and rehabilitation due to any threatening disaster situation or disaster.
• NDRF amount can be spent only towards meeting the expenses for emergency response, relief and rehabilitation.
• It is financed through the levy of a cess on certain items, chargeable to excise and customs duty, and approved annually through the Finance Bill.
• The requirement for funds beyond what is available under the NDRF is met through general budgetary resources.
• A provision also exists in the DM Act to encourage any person or institution to make a contribution to the NDRF.
• It is kept under “Public Accounts” of Government of India.
• Comptroller and Auditor General of India (CAG) audits the accounts of NDRF.
• Department of Agriculture and Cooperation under Ministry of Agriculture (MoA) monitors relief activities for calamities associated with drought, hailstorms, pest attacks and cold wave /frost while rest of the natural calamities are monitored by Ministry of Home Affairs (MHA).

PM-CARES

• Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund, or the PM CARES Fund, was set up to tackle distress situations such as that posed by the COVID19 pandemic.
• The fund receives voluntary contributions from individuals and organisations and does not get any budgetary support. Donations have been made tax exempt, and can be counted against a company’s corporate social responsibility (CSR)
• It is also exempt from the Foreign Contribution (Regulation) Act, 2010, and accepts foreign contributions, although the Centre has previously refused foreign aid to deal with disasters such as the Kerala floods.
• The Prime Minister chairs the fund in his official capacity, and can nominate three eminent persons in relevant fields to the Board of Trustees. The Ministers of Defense, Home Affairs and Finance are ex officio Trustees of the Fund.

Concerns

• It is not clear whether the fund comes under the ambit of the RTI Act or oversight by the Comptroller and Auditor General of India, although independent auditors will audit the fund
• The PM CARES web page is opaque regarding the amount of money collected, names of donors, expenditure of the fund so far, or names of beneficiaries. The PMNRF provides annual donation and expenditure information without any detailed breakup.
• The PM CARES Fund’s trust deed is not available for public scrutiny.
• The decision to allow uncapped corporate donations to the fund to count as CSR expenditure, a facility not provided to PMNRF or the CM’s Relief Funds goes against previous guidelines stating that CSR should not be used to fund government schemes.
• A government panel had previously advised against allowing CSR contributions to the PMNRF on the grounds that the double benefit of tax exemption would be a “regressive incentive”