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PM CARES – CAG audit controversy | Supreme court ruling

Context : The Supreme Court recently endorsed the PM CARES Fund as a “public charitable trust” to which donors contribute voluntarily.

PM CARES

NGO Centre for Public Interest Litigation, represented by advocate Prashant Bhushan, had argued that the PM-CARES Fund

  1. Was not subject to CAG audit. 
  2. It was not under “public scrutiny”. 
  3. Contributions to it were “100% tax-free”.

It is alleged that PM CARES was constituted to “circumvent” the National Disaster Response Fund (NDRF). The need for a fresh national disaster management plan to take on the COVID-19 challenge was also presented.

Supreme court ruling:

1. There is “no occasion” for the Comptroller and Auditor General (CAG) to audit a public charitable trust independent of budgetary support or government money

2. The SC said that it is “not open” for a PIL petitioner to question the “wisdom” that created the fund in an hour of need.
3. Therefore, no exception can be taken to the constitution of a public charitable trust, namely, PM CARES Fund.
4. The SC dismissed the idea that the PM CARES was constituted to “circumvent” the National Disaster Response Fund (NDRF). It reasoned that the outbreak of COVID-19 in India, as well as worldwide, required immediate enhancement in the infrastructure of medical health and the creation of a fund to contain COVID-19.
5. The SC Bench refused to direct the transfer of funds from the PM CARES Fund to the NDRF as any contribution of any individual or institution is not prohibited to be credited into the NDRF.
6. The national plan and guidelines are by its very nature prior to the occurrence of any disaster. It is a measure of preparedness. 

  1. Therefore, it is not conceivable that a national plan would be framed after the disaster has occurred.
    8. The Disaster Management Act already lists these “minimum requirements” under Section 12 as shelter, food, drinking water, medical cover, and sanitation, among other things.
  2. The said guidelines for minimum standards hold good even for those who are affected by COVID-19.