SYLLABUS

GS-2: Important Aspects of Governance, Transparency and Accountability; Statutory, Regulatory and various Quasi-judicial Bodies.

Context: The latest audited accounts of the PM CARES Fund for 2024–25 show a sharp decline in fresh contributions and expenditure, even as its closing corpus rose to a record high of ₹8,452.06 crore.

More on the News

• Sharp fall in contributions: Total contributions declined to ₹479.96 crore in 2024–25, comprising ₹479.04 crore in domestic donations and about ₹92 lakh in foreign donations. Contributions had peaked at ₹7,678.70 crore in 2020–21.
• Spending at five-year low: Expenditure fell to ₹87.85 lakh, compared with ₹3,976.17 crore in 2020–21. About ₹87.84 lakh went towards the PM CARES for Children Scheme.
• Corpus reaches record high: The closing corpus increased by 17.83%, from ₹7,173.03 crore in 2023–24 to ₹8,452.06 crore in 2024–25.
• Interest-driven accumulation: The Fund earned ₹475.14 crore in interest, including ₹469.37 crore from fixed deposits, while receiving ₹324.65 crore as refunds from implementing agencies.
  • Nearly 93% of the corpus, or about ₹7,846 crore, was held in fixed deposits.

About PM CARES Fund

• The Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund was established on 27 March 2020 as a dedicated fund to deal with emergencies or distress situations, including public health emergencies, calamities and other crises, and to provide relief to affected people.
• It is registered as a Public Charitable Trust, with the Prime Minister as ex-officio Chairperson and the Defence, Home Affairs and Finance Ministers as ex-officio Trustees.
• The Fund consists entirely of voluntary contributions and receives no budgetary support from the Government. Contributions qualify for 100% deduction under Section 80G, subject to applicable tax provisions, and contributions by companies/PSUs can qualify as CSR expenditure.
• The Fund is also exempt from the operation of the FCRA and can receive foreign contributions through a designated account.

Concerns/Issues Related to the Fund

• Low utilisation: Expenditure has fallen sharply even as the corpus reached a record ₹8,452.06 crore, raising questions about timely deployment during emergencies.
• Refund transparency: The ₹324.65 crore refund from implementing agencies calls for greater disclosure of project-wise utilisation and reasons for unspent funds. The available reporting does not identify the agencies or reasons for these refunds.
• Parliamentary scrutiny: The PMO told the Lok Sabha Secretariat that questions and matters concerning PM CARES are inadmissible under specified Lok Sabha Rules, citing the Fund's voluntary-contribution-based nature. This has raised questions about the extent of parliamentary scrutiny of the Fund.
• Accountability framework: As a public charitable trust, the Fund requires clear and publicly accessible mechanisms for audit, disclosure and institutional accountability. The Fund states that it is audited by an independent auditor appointed by its trustees.

Way Forward

• Improve utilisation tracking: Ensure time-bound utilisation and reconciliation of funds released to implementing agencies, with reasons for refunds publicly disclosed.
• Transparent deployment framework: Define clear trigger conditions and priority areas for deploying the corpus during emergencies while maintaining an adequate reserve.
• Strengthen disclosure and oversight: Publish comprehensive annual information on receipts, investments, allocations, expenditure and refunds, alongside clearly defined accountability mechanisms.
• Maintain emergency readiness: Periodically assess the corpus against evolving disaster and emergency-response requirements so that financial preparedness translates into timely assistance.