Ministry of Corporate Affairs' Document Shows PM-CARES Fund Should Fall Under RTI

The PMO has repeatedly refused to divulge information on the PM-CARES Fund and how it is being spent.

New Delhi: The Prime Minister’s Office (PMO) has consistently refused to divulge any information about the PM-CARES (Prime Minister’s Citizen Assistance and Relief in Emergency Situations) Fund’s spendings, citing that it is not a “public authority” under the Right to Information Act, 2005.

However, file notings accessed by RTI activists show that the Ministry of Corporate Affairs (MCA) had declared that the fund was set up by the Central government on the day the fund was created, thus making it a public authority under the ambit of Section 2(h) of the RTI Act, 2005.

The PM-CARES Fund was set up on March 27, 2020 as an emergency measure for disaster relief during the coronavirus pandemic. On the same day, a MCA file called “Clarification on contribution to PM CARES Fund as eligible CSR activity under item no. (viii) of the Schedule VII of Companies Act, 2013” say that all contributions made by Indian companies to the fund would qualify as their Corporate Social Responsibility (CSR) obligations as the PM CARES was set up by the Central government.

The note says thus:

“item no. (viii) of the Schedule VII of the Companies Act, 2013, which enumerates activities that may be undertaken by companies in discharge of their CSR obligations, inter alia provides that contribution to any fund set up by the Central Government for socio-economic development and relief qualifies as CSR expenditure. The PM-CARES Fund has been set up to provide relief to those affected by any kind of emergency or distress situation. Accordingly, it is clarified that any contribution made to the PM CARES Fund shall qualify as CSR expenditure under the Companies Act 2013. 3. This issues with the approval of competent authority.”

Schedule VII of the Companies Act, 2013, includes “contributions to the Prime Minister’s National Relief Fund or any other fund set up by the Central government or the State governments for socio-economic development and relief…” as permissible CSR activity.

Also read: RTIs Reveal PSUs Contributed Rs 2,105 Crores to PM-CARES, Most Dipped Into CSR Funds

However, the Companies Act itself was retrospectively amended two months later on May 26, effectively nullifying the MCA’s stated position on the PM-CARES Fund. The retrospective amendment meant that the CSR activity would no longer be dependent on whether the fund has been set up by the Central government or not. The MCA amended Schedule VII to free PM-CARES of any public authority.

The development came on the heels of multiple RTI queries to the PMO about the PM-CARES fund. The PMO had until then delayed responding to the RTI queries, but within three days of the retrospective amendment to the Companies Act, the PMO on May 29 first said that the PM-CARES Fund is not a public authority under the RTI Act to a RTI request filed by a law student Harsha Kandukuri.

According to RTI activist Anjali Bhardwaj, who accessed the file notings of the MCA, the deputy director in the MCA’s CSR cell Aparna Mudiam drafted the circular on March 28, saying that donations made to the PM CARES will qualify as CSR obligations. The Fund itself was registered on March 27 as a public charitable trust and announced by the PMO on March 28. Within hours, many companies pledged to make voluntary donations to the fund. Mudiam’s circular was approved by the corporate affairs secretary Srinivas Injeti for issuance at 11:29 pm on March 28.

“If MCA was relying on the fact that PM CARES was a fund set up by the Central government, then how is the PMO repeatedly denying information under the RTI Act claiming that the fund is not a public authority?” Bhardwaj told The Hindu. “What was the need for the retrospective amendment,” she asked. She also questioned the MCA’s rush to issue the circular on March 28, which was just two days ahead of the end of the financial year, hinting at the possibility that the ministry may have used its power to facilitate big corporates to use its unused CSR funds in the PM-CARES Fund.

Bhardwaj said that notwithstanding the retrospective amendment, the PMO was still misleading the public by refusing information on the PM-CARES Fund. “The RTI applications explicitly sought a copy of records related to the PM CARES Fund held by the Prime Ministers Office (PMO). The PMO is a public authority under the RTI Act and is statutorily obligated to provide information. The issue of whether the PM CARES Fund qualifies as a public authority under the RTI Act is immaterial insofar as this request for information was concerned as only the records held by the PMO were sought. If any files related to the PM CARES Fund are held by or under the control of the PMO, which is a public authority, it is duty bound to furnish them as per the provisions of the RTI Act,” she said.

Bhardwaj also sought RTI information regarding the PM-CARES Fund from the cabinet secretariat, the Union law ministry, and the Union labour and employment ministry. The cabinet secretariat responded by saying that there was “no agenda item in any Cabinet meeting” related to the PM-CARES fund.

Also read: PMO Blocks RTI Requests on PM-CARES Again, Says Responding Will ‘Divert Resources’

Bhardwaj said that it “appears odd that the decision to set up a body in which the PM is the chair in ex-officio capacity and 3 ministers are trustees, in ex-officio capacity, did not go through the cabinet.”

“This (cabinet secretariat’s response) suggests that the decision to set up PM CARES Fund was not approved by the cabinet secretariat,” she said.

The labour ministry, in turn, transferred the RTI request to the PMO, which has already said that any query regarding the Fund is not a public authority. Interestingly, another RTI application by Bhardwaj to the chief labour commissioner seeking details of funds allocated to each state/UT and guidelines regarding utilisation of the PM CARES, was transferred to the Union labour and employment ministry.

Bhardwaj, who has now filed an appeal stating that the PMO is a public authority and therefore it is mandatory for it to divulge information that it possesses, said that the way all RTI requests related to the PM-CARES Fund is being denied are attempts to frustrate the RTI Act. “The manner in which the RTI application has been dealt with is a violation of the Act, as they should have transferred the application to whoever has the necessary information as required under section 6(3) of the RTI Act (instead of circling it amongst various ministries).”