The Prime Minister (PM) is the Chairman ex-officio of both the Prime Minister National Relief Fund (PMNRF) and the PM-CARES Fund, constituted to deal with disaster situations, like COVID-19 (which is also a “notified disaster”). Notably, the Disaster Management Act, 2005 (‘2005 Act,’ for short), pregnant with the statutory Fund, having all the trappings of a public trust, the National Disaster Response Fund (NDRF) constituted thereunder, occupies the field to deal with disaster situations.
Accordingly, the PMNRF (the pre-Constitutional as well as pre-2005 Act public and charitable trust of 1948), which earlier had covered this field, lost its necessity and efficacy, and became otiose and redundant with the coming into force of the 2005 Act; And the PM-CARES Trust (post-Constitutional and post-2005 Act fund dt. 28/03/2020, created in the aftermath of COVID-19 outbreak), is void from its very inception, owing to the reasons recorded above and also owing to its clash of interests with the NDRF (constituted by the Central Government under the said Act), which is managed and controlled by the National Disaster Management Authority (NDMA), of which none other than the PM is the Chairperson ex-officio.
Notably, as per Section 72 of the 2005 Act, the Act has an overriding effect and prevails, notwithstanding anything inconsistent therewith, over every instrument or law for the time being in force. Manifestly, NDRF would prevail over the express trust created by the PM, the PM-CARES Fund.
Over and above, the Government has no power to create a trust otherwise than by an authority of law, in that the provision for creating a Trust is a subject under Entry 10 of the Concurrent List under the Seventh Schedule of the Constitution. Manifestly, the Constitutional Mandate for creating a trust by making a law is an implicit prohibition on the power of the Central Government or Prime Minister (PM) to create a non-statutory express trust (PM-CARES Fund), opaque in nature, to collect money from institutions and public generally during an outbreak of disaster (the COVID-19), while, there is a statutory fund, already in place (NDRF) for the same purpose constituted by the Central Govt. under 2005 Act.
Most importantly, Section 46(1)(b) of the 2005 Act provides for donations and grants from public and institutions, to be sought for in the NDRF. However, at the cost of NDRF, it is astounding that the PM is seeking donations for his non-statutorily created PM-CARES Fund and is, thus, promoting this instead of promoting the NDRF and seeking donations for that. Accordingly, this action of the PM/Government has shockingly, blocked the smooth inlet and flow of funds in the NDRF and cannot be justified in any view of the matter. The Prime Minister is not only bound in law, but also in conscience, to carry out the object and mandate of the 2005 Act in its letter and spirit.
Obviously, the competition and scramble for funds has broken out from the same source, between the statutory (NDRF) and non-statutory (PM-CARES) funds and as such, the clash of interests between the two is no longer a secret fact. It is noteworthy, that the PM-CARES Fund is contrary to the provisions of the 2005 Act, as it has trenched upon the field already occupied by the NDRF and has struck hard at its very source of money, and as such is void ab initio.
Apart from this, India is a country not ruled by a monarch or a despot, but it is a democracy and every action of the Government must be informed by democratic ideals and principles. The ethos of our Constitution frowns upon the way and manner of creation of such a trust of public importance, without consulting the other members of the house of people, much less, the opposition or its leaders. For this count also, the PM-CARES is bad in law.
In addition to the above, the NDRF is audited by the Comptroller and Auditor General of India (CAG); its abuse, misappropriation, and misuse is an offense and punishable under the 2005 Act. What is more, the same is transparent and subject to the annual report (giving accounts of its activities) to be tabled in the Parliament, and the Right to Information (RTI) Act, 2005 and thus fully under the public scanner, while the trust affairs, supra, do not qualify such rigor or statutory obligations. They are opaque, undemocratic, beyond the purview of the RTI Act, non-auditable by the CAG and wholly beyond the public reach and scanner.
Hence, it is picturesque, that there was no need or propriety, at all, of creating such non-statutory post-2005 Act trust, under the pretext of combating COVID-19, without any legal mechanism or control, more so, while there were NDRF and SDRF already in place, which are transparent, open to all and sundry, and manned by statutory public authorities, covering the field of such non-statutory trusts.
Further, it is desirable, indispensable, pragmatic and expedient that the funds collected to cope with the COVID-19 pandemic, must not be strewn under different non-statutory trusts, rather they must be in statutory consolidated fund(s), well-guarded by the provisions of law, so as to lay down National, State and District Plans as envisaged under the 2005 Act, to address the COVID-19 disaster, keeping in view the availability of funds and making provisions for emergency response, relief, and rehabilitation. It is unfortunate and a matter of great pity, that by its action(s) the Government has rendered the 2005 Act maimed, crippled, unworkable, and ineffective.
Most importantly, the actions of the Government must be informed by reasonableness, under the constitutional precincts. In view of all that has been adumbrated hereinbefore, it is conspicuous that the PM-CARES Fund is not only unreasonable but also not backed by any law. Further, it is disquieting that the purpose, motive, and manner behind the creation of the same, under the cover of the COVID-19 outbreak, in the face of NDRF, is unclear and is left to public imagination and guesswork, and is best known to the PM and none else.
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Shashwat Anand is a practicing Advocate of the Supreme Court of India and the High Court of Allahabad. Shashwat has appeared in numerous constitutional matters, including the petition in public interest on the PM-CARES Fund, where he appeared in-person.
Suggested citation: Shashwat Anand, The Curious Case of India’s PM-CARES Fund, JURIST – Professional Commentary, June 16, 2020, https://www.jurist.org/commentary/2020/06/shashwat-anand-pmcares-covid19/.
This article was prepared for publication by Brianna Bell, a JURIST Staff Editor. Please direct any questions or comments to her at commentary@jurist.org
