In the midst of the COVID-19 pandemic, a public charitable trust, known as the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund), has been established by the government. This move comes in response to numerous requests made by citizens looking to aid the government during this trying time.
Structure and Function of PM-CARES Fund
The PM-CARES Fund operates with the Prime Minister at the helm, serving as its Chairman. Other members include the Defence Minister, Home Minister, and Finance Minister. It’s designed to strengthen disaster management capacities and foster research aimed at protecting citizens.
The format allows for micro-donations, making it accessible to a broad range of people who can contribute even the smallest amounts. These micro-contributions together can amass a significant sum, emphasizing collective efforts towards tackling emergencies or distress situations like the current pandemic.
PM-CARES Fund and Corporate Social Responsibility
The Ministry of Corporate Affairs has made it clear that any contributions made by companies towards the PM-CARES Fund will be counted as part of their mandatory Corporate Social Responsibility (CSR) expenditure. As per the Companies Act, 2013, companies with a minimum net worth of Rs 500 crore, a turnover of Rs 1,000 crore, or a net profit of Rs 5 crore must spend at least 2% of their average profit from the previous three years on CSR activities annually.
CSR typically refers to a corporate initiative aimed at responsibly managing the company’s effects on the environment and social welfare.
PM-CARES Vs Prime Minister’s National Relief Fund (PMNRF)
The PMNRF was established back in 1948 by then Prime Minister Jawaharlal Nehru as an aid for displaced persons from Pakistan. Now, it serves primarily to combat natural calamities like floods, cyclones, and earthquakes. It also provides support for medical treatments such as kidney transplants, cancer treatments, and aid for acid attack victims.
The PMNRF is solely funded by public contributions and doesn’t receive any budgetary support from the government. However, similar to the PM-CARES Fund, it welcomes voluntary contributions from individuals, organizations, trusts, companies, and institutions. The fund corpus is invested in various forms with scheduled commercial banks and other agencies.
Unlike PM-CARES, disbursements from the PMNRF are done with the approval of the Prime Minister. The fund is recognized as a Trust under the Income Tax Act, managed by the Prime Minister or multiple delegates for national causes. Contributions towards PMNRF are notified for 100% deduction from taxable income under Section 80(G) of the Income Tax Act, 1961.
