PM-CARES FUND: Does PM Care to Answer? BJP Stalls PAC’s Call to Review COVID-19 Response

In a parliamentary panel meeting of the Public Accounts Committee (PAC), it failed to reach a consensus on examining the government’s response to the COVID-19 pandemic. The agenda included PM-CARES Fund and general scrutiny of the government’s efforts in tackling the emergency. The Congress leader, Adhir Ranjan Chowdhary who chairs the PAC, made an appeal to the panel to take up the aforementioned issues for scrutiny; however, the attempt was balked by the BJP members who outnumbered other parties. MPs from Biju Janata Dal (BJD) and JD(U) also supported the BJP on the issues.

The Public Accounts Committee or PAC of the Parliament holds the responsibility for examining the government’s financial expenditure. Furthermore, PAC’s scope includes- examination of accounts showing the appropriation of sums granted by Parliament for government expenditure, annual financial accounts of the government, and any such accounts laid before the House.

Subsequently, it holds the stature as one of the most important parliamentary panels; which scrutinizes key reports by the auditor general. A senior opposition party leader heads the committee in order to ensure impartiality. According to the Lok Sabha website, the panel would meet on Friday; to discuss ‘the selection of subjects for examination during the year 2020-21’.

According to a report, the members of BJP voted against opposition’s attempt to select the PM CARES Fund for examination saying its funding was not sanctioned by parliament. Therefore, the committee cannot take it up. Meanwhile, the opposition claimed that the ruling party was afraid as the ‘fund’ did not come under the audit of the CAG. Finally, the PAC decided to examine varied subjects with special focus of the CAG report number 5 of 2017, a performance audit of Sino-India Border Roads. It also includes CAG report 13 of 2013 which includes provisioning of high altitude-clothing, equipment, ration, and housing for soldiers.

PM-CARES FUND : The Questions & Concerns

On March 28,2020 the PM announced the creation of Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) Fund. It turned out to be the third fund administered by the PMO; in addition to PMNRF and PM’s Defense Fund. The PM Cares fund mentions that it is available during a public health emergency; such as the ongoing COVID-19 pandemic, the up-gradation of pharmaceutical and healthcare facilities, funding research, and during any other emergency and calamities.

PMNRF v. PM CARES Fund

Right after the induction of the PM-CARES Fund, observers were quick in pointing out the lack of basis in setting it up. The PMNRF, which has major similarities except for slight differences in their mandates and visible differences in their setup; had an unused corpus of Rs 3,800.44 crore as of 2019, as per its Audit Report. Despite this, the PM announced the new fund.

Established 70 years ago, the PMNRF caters to emergencies, calamities and to emerging medical expenses. What PM-CARES does is, it goes a step further in including the research needs, infrastructure and the pharmaceutical and healthcare sector.

Another contention of the critiques has been the set up of the present fund; which includes the PM, and the ministers of finance, defense, and home affairs. In comparison, the PMNRF includes the PM and finance minister, the president of the INC, a representative of industry and commerce, and that of the Tata Trustees.

Nonetheless, both funds share similarities which range from tax exemptions to honorary services.

THE MATTER OF TRANSPERANCY

While many wings of the government donated voluntarily to the fund; circulars were issued in various government departments “urging” employees to contribute one day’s salary each month or give their objection in writing. 

On top of all, as a general rule whenever taxpayers funds are used by government bodies, they have a right to know of its utilization. The same doesn’t seem to be the case with the PM-CARES Fund. The PMO made it known that CAG would not audit the fund. Rather an ‘independent’ auditor appointed by the trust shall do so.

On April 1, 2020 one Harsha Kandukuri filed an RTI query with the PMO. It asked for copies of documents related to PM CARES; including the trust deed, the details of the trustees, a copy of the trust’s tax exemption certificate, and other bylaws governing the trust. After the stipulated 30-day reply limit the PMO rejected the RTI. Cited reason included: “PM CARES Fund is not a Public Authority under the ambit of Section 2(h) of the RTI Act, 2005”.

Consequently, a petition was filed in the Delhi High Court seeking direction to declare PM-CARE Fund as a “public authority”. The matter remains pending until at least August 28, 2020. Therefore, the applicability of the RTI Act is only the first and most basic means of creating transparency for the PM-CARES.

‘INDEPENDENT’ AUDITOR

Another litany that emerged has been the appointment of an ‘independent’ auditor. The independent auditor SARC & Associates appointed for PM CARES includes a firm headed by Sunil Kumar Gupta; who, prima facie happens to have close ties with the ruling party itself.Independent‘, in this context, ends up as the government’s poor attempt at tokenism. Moreover, the selection of the said auditor did not see any competitive bidding process either. Another interesting fact has been the appointment of the same auditor for PMNRF in 2018-19. Therefore, as it stands today, the “independent auditors” of both PMNRF and PM CARES are the same company.

The PM-CARES Fund has reportedly received Rs 6,500 crore in the first week of its launch. It has crossed a whopping Rs 10,000 crore as of now. However, the most worrying part has been the ineffective utilization of the fund. Which in its current state, remains a secret considering the PMO’s rather defensive cloak and dagger approach towards it.

The PAC meeting on Friday, July 10, 2020, was the first meeting of the panel in the current calendar year. It was the second meeting of the Lok Sabha’s standing committee; after the parliament got adjourned prematurely on March 23 due to the COVID-19 pandemic.