As PM CARES Collects Crores, National Disaster Relief Fund Still Awaits Bank Account

The Disaster Management Act of 2005 envisages public contributions to the NDRF, which, unlike PM CARES, is subject to CAG audit and RTI. But the government has yet to open a bank account for donations.

New Delhi: Fifteen years after the National Disaster Response Fund (NDRF) was created, the government has finally begun the process of opening a bank account in to which public contributions for disaster relief can be deposited.

The move comes in the wake of queries to the Union home and finance ministries from The Wire and RTI activist Lokesh Batra seeking information about the NDRF’s bank account.

Last week, the Supreme Court issued notice to the Centre on a petition seeking transfer of all donations received by PM CARES for the fight against COVID-19 – officially described as a national disaster – to the NDRF, which, as a government fund, is not just subject to audit by the Comptroller and Auditor General but would also unambiguously be subject to greater transparency under the Right to Information Act.

Like the Prime Minister’s National Relief Fund (PMNRF), which has existed for disaster relief since 1948, the PM CARES fund set up during the lockdown by the prime minister is opaque about how donations received from the public are to be spent.

At the same time, the NDRF, set up under the Disaster Management Act, 2005, has not even put in place a mechanism to collect funds from the public.

The PM CARES fund – a ‘non-government’ trust set up with government support and infrastructure – has been the subject of several controversies since it was set up, mainly due to its lack of transparency. The Prime Minister’s Office (PMO) has declared that the fund, like the PMNRF, does not fall under the jurisdiction of the Right to Information Act, 2005.

Given this situation, a PIL has now been filed in the Supreme Court demanding that the entire amount collected by the PM CARES fund be transferred to the NDRF. The petitioner, the Centre for Public Interest Litigation, argues that the NDRF, which is meant to allow individuals or institutions to contribute funds towards handling emergency situations, is a transparent system and the funds collected under it will be subject to a statutory audit by the CAG – unlike the ‘independent auditor’ appointed without a transparent process to audit PM CARES.

Three funds, no visible relief

Section 46 (1) of the Disaster Management Act, 2005, provides for the constitution of an NDRF  to meet any threatening disaster situation or disaster. According to the legislation, the Central government credits an amount to the fund every year, which is later used in disaster management and under Section 46 (1) (b) of the Act, any person or institution may donate to the fund for the purpose of disaster management. However, since there is no mechanism for the public to donate, no funds have been collected from the public.

The PMNRF was constituted by Jawaharlal Nehru, the first Prime Minister of India, in 1948, to receive financial help from the public to help deal with disaster situations. This fund has no budgeted contribution and only collects donations from the public. The PMO insists it does not fall under the purview of the RTI – a contention under challenge in the Delhi high court – and is audited by an independent auditor.

Set up on terms similar to the PMNRF, the functioning of the PM CARES fund is opaque. According to the PMO, since it is a public charitable trust and has been constituted on the basis of the prime minister’s appeal and not any government order, it is not subject to the RTI.

Also read: PM CARES Fund Now Has ‘Independent Auditor’ But Remains Beset by Lack of Transparency

General information regarding the PM CARES fund, such as how much was received in donations, how much was spent and for what purpose, is also not being divulged.

Meanwhile, the NDRF, which has been set up through an act of parliament, is subject to the RTI Act and also audited by the CAG. This makes the NDRF more transparent than both the PMNRF and PM CARES fund, because the public has the authority to question the government about it.

Who is in charge?

However, since no mechanism has been put in place to allow the NDRF to collect contributions from the public, The Wire and Batra filed RTI applications in various departments, seeking information on the process of receiving public donations in the NDRF. They also sought a verified copy of any rule/ordinance or procedure followed in this regard.

After a few days, the disaster management department of the home ministry finally responded to Lokesh Batra on June 9, 2020, stating that the matter is the concern of the department of expenditure of the Ministry of Finance.

The disaster management department wrote: “The information sought is not available in the records of this office. It is hereby informed that since the budget provisions of NDRF and CESS/tax collections are managed by the Department of Expenditure, Ministry of Finance, the information sought comes under the jurisdiction of the Department of Expenditure.”

An RTI was then filed in the department of expenditure, seeking the information, but no response has been received so far.

Later, The Wire wrote letters to Union home secretary Ajay Kumar Bhalla, expenditure secretary T.V. Somanathan and member secretary of the National Disaster Management Authority (NDMA) G.V.V. Sarma, seeking information on whether a mechanism has been put in place through which any individual or institution may contribute to the NDRF.

These letters also asked for a verified copy of the rules or procedures constituted in this regard.

No response has yet been received from the home secretary and NDMA member secretary. However, the expenditure secretary responded, “The matter is to be looked after by the Union home ministry.”

Since the home ministry had said on record in its response to the RTI query that the matter concerning the NDRF was the concern of the department of expenditure, The Wire wrote another letter to the expenditure secretary, attaching the response of the Ministry of Home Affairs and seeking information regarding public contributions to the NDRF.

Also read: Centre Must Create Transparency, Trust on PM-CARES and COVID-19 Relief Efforts

The expenditure secretary has not responded to this letter as yet. However, sources in the department have confirmed that after the RTI application and the letter from The Wire, the expenditure department has approved the methodology to obtain grants from individuals and institutions in the NDRF and an office memorandum to open an account in the home ministry has been issued.

The department has also asked for the same methodology to be followed by state disaster response funds.

The sources claim: “It will be better if we receive public donations. We are short of funds. Earlier, we used to receive a lot of funds through cess which we spent on the NDRF. But with the implementation of GST, the scope of cess has greatly reduced and much has to be spent from the budget.”

The home ministry has to take the final decision regarding the opening of accounts for the NDRF. After The Wire‘s enquiries, the finance ministry has written to the MHA to start the process of opening an account under the NDRF.

Translated by Naushin Rehman from two stories in The Wire Hindi . You can read the Hindi original here and here.