Why in News?

Supreme Court dismisses plea to transfer money to National Disaster Relief Fund and declared that no need to audit PM-CARES. PM CARES Fund was set up in March during the wake of the COVID-19 pandemic.

What PIL Says and other concerns

• The PIL seeks to transfer voluntary funds from PM CARES to the NDRF that can be Helpful for tackling COVID-19 crisis.
• PM CARES is not subject to audit by the Comptroller and Auditor General but by private auditors.
• The contributions under PM-CARES are 100% tax free and also not under public scrutiny.
• Questions the need for creating a reserve when Prime Minister’s National Relief Fund is already in existence.
• In one and a half months the fund received thousands of crores worth of donations including unlimited tax-free contributions from major corporates.

SC observations

• No institutions and individual can be prohibited to make contributions to the PM CARES Fund.
• The Centre will be free to transfer funds to NDRF as it deems appropriate and solely rely on Government.
• SC rejected the need for a fresh national disaster management plan to tackle COVID­19 challenges.
• Court also rejected the idea that the PM CARES was constituted to circumvent the NDRF already in existence under the Disaster Management Act of 2005 to receive contributions to finance the fight against a calamity.

National Disaster Relief Fund vs PM-CARES

• NDRF constituted under Section 46 of the Disaster Management Act, 2005 a statutory fund. At the same time PM-CARES has no statutory backing.
• NDRF has budgetary backing but PM-CARES do not have any backing.
• The funds collected under NDRF will be subject to a statutory audit by the CAG but PM-CARES do not have CAG audit and audited by private auditors.

About Prime Minister’s National Relief Fund

• It was set up in January 1948 to accept public contributions for the assistance of Partition refugees.
• Currently it is used to provide aid for the families of those who died in natural calamities, accidents or riot.
• A joint secretary in the PMO administers the fund on an honorary basis.
• In 1985 previous committee constituted for the management of PMNRF transfer the authority to PM.
• Data shows that the fund has an unspent balance of Rs. 3,800 crore.

What need to be done?

• It should be comes under the ambit of RTI because RTI definition covers organisations financed substantially by the government, including non-governmental organisations.
• It should be comes under the audit of CAG instead of private auditors.

Must Read : PM Cares Fund RTI

Source : The Hindu

Topic : GS II :- Important aspects of governance, transparency and accountability