NEWS
08/04/2020 7:36 AM IST | Updated 08/04/2020 9:10 AM IST

PM CARES And PMNRF Both Opaque In Same Way, Documents Show

The Modi government has been at pains to emphasise the virtues of PM-CARES over PMNRF, but both funds fail the transparency test in one important way.

SOPA Images via Getty Images
In this photo illustration, Indian Prime Minister Narendra Modi seen on a smartphone screen appealing to Indian people to light candles amid Coronavirus out break. 

NEW DELHI — The Modi government has struggled to justify the creation of a new PM-CARES fund to support India’s response to the novel coronavirus pandemic, when the Prime Minister’s National Relief Fund already exists.

In off-record briefings, Modi government functionaries have pointed to several features which set apart the new fund from the old. Some of them include the provision for a 10 member advisory board and non-inclusion of the Congress party president in the PM CARES fund. 

Incidentally, in her letter to Prime Minister Narendra Modi, the Congress President Sonia Gandhi on Tuesday suggested transfer of all money collected in the PM-CARES fund to the PMNRF to ensure “efficiency, transparency, accountability and audit in the manner in which these funds are allocated and spent”. 

However, official documents show the PM-CARES and the PMNRF are similar in one crucial regard: both funds do not disclose the identities of all their donors and beneficiaries despite managing thousands of crores of public money. 

While the PMNRF website shows a total balance of Rs 3800.44 crores, media reports about the PM-CARES fund cite only publicly declared donations to show that it had amassed Rs 6500 crores within a week of being set up.

But if the audited reports on the PMNRF website do not reveal details about who the donors and beneficiaries are, the official statement issued by the Prime Minister’s Office about the PM-CARES fund and its dedicated page on the Prime Minister’s official website both do not disclose these details either. 

HuffPost India has asked the Modi government if it plans to publish the details of all donors, beneficiaries, and the trust deed of the PM-CARES, which has been registered as a “public charitable trust”. This report will be updated if and when the government responds. 

“It’s the same cap on the other head,” said right to information activist Aseem Takyar about the PM-CARES fund, implying that it is also non-transparent in the same way as the PMNRF in its present form.

“It’s the same cap on the other head,” said right to information activist Aseem Takyar about the PM-CARES fund, implying that it is also non-transparent in the same way as the PMNRF in its present form. 

Rather than set up a new fund, activists like Takyar say, Prime Minister Narendra Modi ought to have brought the PMNRF under parliamentary oversight, and allowed the fund to be audited by the Comptroller and Auditor General (CAG). 

Takyar has been battling for transparency in PMNRF finances for years, but was denied information by the Prime Minister’s Office during both Manmohan Singh and Modi’s tenure, indicating a rare consensus on keeping these specific details away from public scrutiny. Worryingly, the Prime Minister’s Citizen Assistance And Relief in Emergency Situation (PM-CARES) Fund appears to be similarly opaque.  

“I have now filed an RTI seeking details about  the PM-CARES fund as well,” Takyar said. 

“Suppose there is a dubious businessman who comes from Dubai, gives a cheque of Rs 1 crore to the Prime Minister and clicks a photograph. There is a possibility of some wrong money, some hawala money also finding its way to the fund,” he said. “So I want to know details about all donors who are contributing to the fund. There has to be transparency.” 

Senior Advocate Dushyant Dave, the current president of the Supreme Court Bar Association, said a new fund was not needed but now that one has been created, the government should take the first step and allay fears about lack of transparency.  

“It would be nice if the government were to clarify and allay the fears of the people by saying that we will subject it to the CAG audit,” Dave said. 

“Everything that the government does, as per my understanding of the constitution, it has to be subject to CAG’s audit. That is the constitutional requirement. These are ultimately funds raised by the government, these are not funds raised in private capacity by the Prime Minister. So all funds which are raised and given by the people in whatever form, even if it is in the form of a relief fund, must be subject to audit automatically,” he argued. 

HOW PMO ARGUED AGAINST TRANSPARENCY

In early 2012, Takyar filed a right to information application with the Prime Minister’s Office seeking, among other things, details about the donors and beneficiaries to the PMNRF from 2009 till 2011. The fund denied him information arguing that this information was not in public interest and could cause the “unwarranted invasion” of the privacy of the donors and beneficiaries. 

Takyar filed multiple appeals against this denial citing the need for transparency and reached the Central Information Commission which said details of the institutional donors to the PMNRF ought to be revealed and, if they did not object, the same could be done in the case of other private donors as well. However, it did not support the public disclosure of details of beneficiaries. 

The PMNRF appealed against this decision in the Delhi High Court arguing, among other things, that it is not liable to give this information as it is not a public authority under the Right to Information Act. Sharing the information, the PMNRF’s lawyers reiterated, would result in an “unwarranted invasion of the privacy of individuals”. Details of how the PMNRF spent its money was not shared with even the Parliament or the Comptroller and Auditor General. 

HuffPost India
Excerpt from the May 2018 order of the Delhi High Court.

In May 2018, a two judge bench of the Delhi High Court gave a split verdict: While Justice S. Ravindra Bhat felt the PMNRF is a public authority under the RTI act and needed to give all details sought by Takyar, Justice Sunil Gaur thought differently and said the PMNRF is not a public authority under the RTI act and therefore could not be compelled to share information under the provisions of the act.

The judges asked the then chief justice of the Delhi High Court to refer the issue to a third judge. The matter is now listed for hearing on 15 July 2020. 

“In the PMNRF case, Justice Gaur seems to have erred in holding that even information about PMNRF is outside the purview of the RTI Act,” said Venkatesh Nayak,  co-ordinator of the Access to Information programme of the Commonwealth Human Rights Initiative and a veteran RTI activist. “There is no justification for recording such a finding in the absence of any cogent reasoning.”

On his part, Takyar pointed to a 31 October 2017 order of the Central Information Commission, in which commissioner Yashovardhan Azad ruled that the details of donors and beneficiaries of the Delhi Chief Minister’s Relief Fund could be disclosed under the Right to Information Act.

HuffPost India
Excerpt from the May 2018 order of the Delhi HC.

FEARS OF THE POSSIBILITY OF A SCAM 

L Srikanth of CashlessConsumer, a consumer collective on digital payments which has studied digitisation of relief funds in states like Kerala and Karnataka, told HuffPost India that Parliament ought to have oversight over PM-CARES and PMNRF, and both funds should be nationalised and audited by the CAG. 

This was necessary, he argued, “to prevent situations such as investing the funds in long term debt instruments such as perpetual bonds and state development loans as has been the case with PMNRF.” He was referring to the investments made by the fund in several instruments over the years. For instance, the PMNRF invested Rs 250 crore in perpetual bonds in 2017. 

Srikanth was among the earliest to point to the lack of transparency in both the PMNRF and PM-CARES funds in two twitter threads. 

Activist Saket Gokhale highlighted two other important concerns about the administration of the PM-CARES fund: First, if all members of the trust would have voting rights about how the funds will be disbursed. Second, if that were to be the case, since the trust will also have members from civil society, they should not have discretion over how public money is spent since that is the sole prerogative of the government of India. 

He explained why it is necessary for the fund to have oversight from the parliament. 

“In the beginning they argued that it’s a public trust fund that works on micro-donations from people and from corporates. Okay. That is private money coming in, but the moment PSUs and MPLAD funds have gone into it, it is public money that has gone into it. MPLAD funds come from the Consolidated Fund of India and there are rules on how this money is to be spent. It has to have parliamentary oversight,” Gokhale said.

When asked if he would rather prefer a more transparent version of the PMNRF, Gokhale replied in the affirmative. He found the PMNRF, “a little bit more transparent because at least there are balance sheets” which is not the case with the PM-CARES thus far. 

Senior Advocate Sanjay Hegde underlined the need for the release, through official channels with legal sanctity, of the trust deed. “The trust document needs to be made public. One cannot be solely dependent on press releases, which have no legal sanctity,” Hegde said. 

Hegde cited the example of the  infamous “cement scam” in Maharashtra. Indira Gandhi Pratibha Pratishthan and Konkan Unnati Mandal were two of seven private trusts used by the Congress party in the early 1980s when A R Antulay was the Chief Minister of the state. The funds were collected in exchange for granting permits by the Maharashtra state government to select businessmen operating cement and sugar industries. 

To ensure that the same is not repeated here, Hegde said the trust should have the posts of the Prime Minister or Defence Minister, among others listed in the publicly stated information, as trustees and not private individuals in charge.