Context: Recently the 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 coronavirus pandemic.

More about the news:

  • In its 45-day existence, PM CARES has attracted a large amount of donations. In the first week, itself publicly declared donations had added up to at least ₹6,500 crore.
  • In the month since then, lakhs of public and private sector employees have also donated a day’s salary to the fund.
  • Among major donations include ₹500 crore from employees of the Defence Ministry, Army, Navy, Air Force and defence public sector units, as well as ₹500 crore each from the Tata Group and Reliance Industries. 

Concerns raised

  • Double benefit of tax exemption under CSR:
    • The decision to allow uncapped corporate donations to the fund to count as CSR expenditure. This facility is not provided to PMNRF or the CM’s Relief Funds.It 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”.
  • Ambiguity with respect to the amount and utilization methods:
    • The Central government has not responded to queries on how much money is in the PM CARES Fund, or how and when it will be used to provide relief.
    • The PM CARES web page is opaque regarding the amount of money collected, names of donors, the expenditure of the fund so far, or names of beneficiaries.
  • Ambiguity with respect to oversight on the fund:
    • 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.
    • The PM CARES Fund’s trust deed is not available for public scrutiny.
  • Underutilisation of existing funds with similar objectives:
    • As of December 2019, the PMNRF had an unspent balance of ₹3,800 crore in its corpus.

Source: PMNRF

  • Protests have been raised against companies such as Reliance which have made major donations to PM CARES even while cutting salaries of their own employees.
  • The Railway Ministry, which donated ₹151 crore to PM CARES, but could not provide free transport for destitute migrant workers.


  • It is a PM-Citizen Assistance and Relief in Emergency Situations Fund set up to support the government in its fight against the impact of the coronavirus pandemic.
  • The fund consists entirely of voluntary contributions from individuals/organizations and does not get any budgetary support.
  • Differences between Prime Minister's National Relief Fund and PM-CARES
    • Prime Minister's National Relief Fund is for all kinds of natural disasters, while the PM CARES fund is specially meant for COVID-19 similar pandemic situations.
    • PM CARES is a donation-based fund and the legislative hurdles for withdrawal from the funds are absent.
    • The PM CARES Fund tries to differentiate itself from PMNRF by enabling micro-donations. One can donate as low as Rs 10 in the PM CARES Fund, while the minimum one can donate in PM National Relief Fund is Rs 100.
  • Benefits of donating in the fund:
    • Donations have been made tax-exempt.
    • Contributions towards PM CARES Fund will be an eligible expenditure under the Corporate Social Responsibility (CSR) obligations.
    • Donations are also exempt from the Foreign Contribution (Regulation) Act, 2010
  • It has been set up as a public charitable trust.
    • Board of trustees: 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 Defence, Home Affairs and Finance are ex-officio Trustees of the Fund.
  • Only Indians and Persons of Indian Origin (PIOs) can contribute to the fund.


Prime Minister's National Relief Fund

  • It was set up in January 1948, originally to accept public contributions for the assistance of Partition refugees. 
  • It is now used to provide immediate relief to the families of those killed in natural calamities and the victims of major accidents and riots and support medical expenses for acid attack victims and others.
  • The PMNRF was originally managed by a committee which included the Prime Minister and his deputy, the Finance Minister, the Congress President, a representative of the Tata Trustees and an industry representative. 
  • However, in 1985, the committee entrusted the entire management of the fund to the Prime Minister, who currently has sole discretion for fund disbursal. A joint secretary in the PMO administers the fund on an honorary basis.
  • Contributions:
    • Prime Minister's National Relief Fund (PMNRF) was established entirely with public contributions and does not get any budgetary support.
    • PMNRF accepts voluntary contributions from Individuals, Organizations, Trusts, Companies and Institutions etc.
  • Benefits of donations:
    • All contributions towards PMNRF are exempt from Income Tax under section 80(G).


About Corporate Social Responsibility (CSR)

  • Corporate Social Responsibility (CSR) is generally understood in a broader sense, as a self-regulatory mechanism, whereby a business entity monitors and ensures its active compliance with the spirit of the law, ethical standards and international norms.
  • In India, CSR is defined to mean those philanthropic and social welfare enhancing activities specified in Schedule VII to the Companies Act, 2013, undertaken by the consistently well off companies incorporated in India under the Companies Act.
  • India is considered as the first country to have made CSR a statutory liability for the corporate entities.
  • Provisions:
    • Company having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or more during any financial year shall constitute a Corporate Social Responsibility Committee and shall spend in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years
  • Exemptions:
    • There are no specific tax exemption/concessions to companies under the Income Tax Act, 1961 for expenditure incurred by companies towards CSR. 
    • However, spending by companies on several activities like rural development projects, skill development projects, agricultural extension projects, contribution to Prime Minister’s National Relief Fund etc.may qualify for tax exemptions under relevant provisions of Income Tax Act, 1961 subject to the fulfilment of any specified conditions.


The Contingency Fund of India

  • The Contingency Fund of India established under Article 267 (1) of the Constitution is in the nature of an imprest (money maintained for a specific purpose) which is placed at the disposal of the President to enable him/her to make advances to meet urgent unforeseen expenditure, pending authorization by the Parliament. 
  • Approval of the legislature for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained to ensure that the corpus of the Contingency Fund remains intact. 
  • The corpus for Union Government at present is Rs 500 crore (Rs 5 billion) and is enhanced from time to time by the Union Legislature. 
  • The Ministry of Finance operates this Fund on behalf of the President of India.

Contingency Fund of State

  • Contingency Fund of each State Government is established under Article 267(2) of the Constitution – this is in the nature of an imprest placed at the disposal of the Governor to enable him/her to make advances to meet urgent unforeseen expenditure, pending authorization by the State Legislature. 
  • Approval of the Legislature for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained, whereupon the advances from the Contingency Fund are recouped to the Fund. 
  • The corpus varies across states and the quantum is decided by the State legislatures.


Image Source: TH