PM relief funds to complement each other
Both Prime Minister’s National Relief Fund (PMNRF) and the PM-CARES are public trusts recognized as such under income tax laws; donations to both are tax-deductible under Section 80(G) of the Income Tax Act, 1961.Updated: Apr 01, 2020 01:51 IST
The 72-year-old Prime Minister’s National Relief Fund (PMNRF) has company -- the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) fund, which was launched in the aftermath of the Covid-19 pandemic.
The former has won a reputation as a well-managed entity that, while caring for the needy in times of distress, also made prudent investments. Both PMNRF and the PM-CARES are public trusts recognized as such under income tax laws; donations to both are tax-deductible under Section 80(G) of the Income Tax Act, 1961. And both funds can be used by the Prime Minister of India at his discretion.
Established in 1948 by India’s first Prime Minister Jawaharlal Nehru to assist people displaced from Pakistan after partition, PMNRF’s resources are to be used to “render immediate relief to families of those killed in natural calamities like floods, cyclones and earthquakes, etc. and to the victims of the major accidents and riots.”
This clear set of purposes for which PMNRF can be used perhaps underlines the need for the creation of a separate fund to provide relief to those affected by the coronavirus or find themselves in similar situations of distress in the future.
A quick look at PMNRF’s accounts over the years shows that it expenses are primarily under three heads: medical bills, natural calamity relief and ex-gratia payments for riot or accident victims.
To increase its corpus, PMNRF also invests heavily in the debt market .
According to its last available receipts and payments account, PMNFRF as of March 31, 2019 had a cash balance of Rs 1467.5 crore in banks. In financial year (FY) 2018-19, it invested Rs 250 crore in fixed deposits with IDFC Bank and also Rs 1301.3 crore in state development loans (SDLs) ,which are debt instruments issued by states to raise money.
Between FY 2009-10 and FY 2018-19, PMNRF earned Rs 1,959 crore in the form of interest and dividends on its investments.
In FY 2018-19, PMNRF paid Rs.160.8 crore of medical bills and disbursed Rs 51.6 crore towards ex-gratia payments to victims of accidents or riots.
It also spent Rs 7.32 lakh on postage charges, as thousands of letters are despatched to beneficiaries and hospitals or other institutions.
In FY18-19, PMNRF received Rs 534.2 crore in public donations, more than double the donations of Rs 236 crore in the previous year. An analysis of available data from 2009-10 to 2018-19 shows that the fund received its highest donation (Rs 608.6 crore) in FY 2014-15 when Narendra Modi came to power.
During this National Democratic Alliance (NDA) era, the fund has been used for providing financial help to victims of acid attacks, floods, landslides and rail accidents. In 2009, it was also used for rehabilitation of some people affected by the Indian Ocean tsunami . In 2004, the PMNRF was used to provide relief to families affected by ethnic violence in Assam. A large part of the fund is used to pay the medical bills of poor people.
While the financial results of the PMNRF for the current year will be made availably only after March, it started the current financial year with a total balance of Rs 486 crore in cash.
HT spoke to two former officials who have handled the PMNRF is earlier regimes. Both said that it followed strict protocols on spending and top Prime Minister’s Office officials are often allowed to take decisions on behalf of the PM.
One official maintained that a new fund was needed to pay for Covid-19 relief efforts because PMNRF funds are earmarked for other exigencies. The other official differed and said PMNRF could have been used for coronavirus relief efforts as well.