PM-CARES Fund Issues, Transparency, Utilisation, Concerns

Why in the News? : The audited financial statements of the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund for 2023-24 and 2024-25 have been released after a prolonged delay, highlighting concerns over the Fund’s utilisation, declining donations and transparency.

About PM-CARES Fund

PM-CARES (Prime Minister’s Citizen Assistance and Relief in Emergency Situations) Fund was established on 27 March 2020 as a public charitable trust to provide assistance during emergencies and distress, particularly in the context of the COVID-19 pandemic. 

• Legal status: It is constituted as a public charitable trust, rather than as a fund forming part of the Government of India’s budgetary accounts.
• Chairperson: The Prime Minister is the ex-officio Chairperson of the Fund, with the Ministers of Defence, Home Affairs and Finance serving as ex-officio trustees. 
• Purpose: The Fund aims to provide relief and assistance during emergencies and distress, including measures relating to healthcare and disaster situations.
• Sources of funds: It receives voluntary donations, along with income generated through its corpus, such as interest on bank and fixed deposits.
• Foreign contributions: The Fund is exempted from the operation of the FCRA, 2010, enabling it to receive foreign contributions. 
• CSR benefit: Contributions to PM-CARES have been recognised as eligible Corporate Social Responsibility (CSR) expenditure, enabling companies to contribute towards the Fund as part of their CSR obligations.
• Tax benefit: Donations to the Fund are eligible for income-tax deduction under Section 80G, subject to applicable provisions.
• RTI status: The PMO has maintained that PM-CARES is not a “public authority” under Section 2(h) of the RTI Act, 2005. This has been a major point of debate concerning transparency and public accountability. 
• Audit: The Fund’s accounts are audited by an independent auditor appointed by the trustees, rather than being part of the regular government accounts.

PM-CARES Fund: Key Financial Findings

The audited financial statements show that the PM-CARES Fund’s income and corpus increased in 2024-25, even as donations declined and interest earnings became an increasingly important source of income.

• Donations declined: Donations fell by around 30% to ₹480 crore in 2024-25 compared with the previous year.
• Total income increased: The Fund’s total income rose by 41% to ₹1,279.9 crore in 2024-25.
• Corpus increased: The closing balance reached ₹8,452.06 crore, registering a 17.8% increase over the previous year.
• Interest income rose: The Fund earned ₹475 crore as interest in 2024-25, almost equal to its donation income of ₹480 crore.
• Fixed deposits boosted interest earnings: The increase in interest income was associated with shifting the corpus from savings accounts to fixed deposits in 2023-24.
• Refunds from agencies: Agencies that had earlier received money from the PM-CARES Fund returned ₹324 crore in 2024-25. 

  • Note: Implementing agencies are the government departments, organisations or other bodies that receive money from the PM-CARES Fund to carry out specific relief or emergency-related activities. A refund means the money returned by these agencies to the PM-CARES Fund when the amount allocated to them was not fully used.

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PM-CARES Fund Issues 

The latest disclosures raise concerns regarding the effective utilisation of the Fund, transparency in its financial operations and the scope for public scrutiny.

• Extremely low utilisation: Only ₹87.85 lakh was utilised in 2024-25 despite the Fund having a closing balance of ₹8,452.06 crore.
• Large unutilised corpus: The very low expenditure compared with the accumulated corpus raises questions about the extent to which the Fund is being deployed for its intended emergency-relief purpose.
• Unexplained refunds: Although ₹324 crore was refunded by implementing agencies, information on the nature of the payments, reasons for refunds and identity of the agencies was not provided.
• No details of original allocations: The purpose for which the refunded money was originally allotted has not been disclosed, making it difficult to assess the utilisation of those allocations.
• Delayed disclosure: Annual disclosures had not been uploaded since FY 2022-23, reducing the scope for timely scrutiny.
• Missing audit notes: The accompanying notes to the audit report were not uploaded, limiting the information available for understanding the financial statements.
• Limited information on fund sources: Questions remain over the availability of information regarding the sources of funds, including foreign contributions.
• RTI-related concern: The Fund’s position that it is not a public authority under Section 2(h) of the RTI Act, 2005 has been a major point of debate regarding transparency and public accountability.

The combination of low utilisation, unexplained refunds, delayed disclosures and limited information has led to criticism regarding the Fund’s openness to public scrutiny.

Way Forward

The way forward should focus on greater transparency, timely disclosure and effective utilisation of the Fund.

• Timely disclosure: Financial statements should be released regularly without prolonged delays.
• Transparency: Details of fund sources, utilisation, implementing agencies and refunds should be made publicly available.
• Accountability: The reasons for refunds and the purpose of original allocations should be disclosed to enable public scrutiny.
• Effective utilisation: The large corpus should be utilised effectively for citizens during disasters and emergencies.
• Greater public scrutiny: Relevant financial information and audit-related notes should be made available to strengthen accountability.