COVID India: How is an emergency fund stirring controversy?

Major corporate houses, the Indian armed forces and even the Dalai Lama have contributed to India's PM-CARES fund — a reserve set up to bolster India's response to the coronavirus pandemic.

The fund, which stands for Prime Minister's Citizen Assistance and Relief in Emergency Situations, has detractors in India, largely because of a lack of transparency and accountability.

Transparency activists and lawyers have taken the government to court over the fund, demanding that its books be made available for public scrutiny.

In early September, a fresh row erupted when the prime minister's office told the Delhi High Court — where a petition against the fund is being heard — that PM-CARES is not a government fund.

The official submission to the court came in response to a plea seeking that the fund be declared as part of the state, bringing it under the purview of the Right to Information law, and making it more transparent.

The prime minister's office did not reply to DW's request for comment on the fund.

What is the controversy about?

The PM-CARES fund has been criticized for its lack of transparency, use of the government insignia and government websites to draw donors.

The fund is also referred to as "a public charitable trust," adding that it is not "owned, controlled or substantially financed" by the government.

Anjali Bhardwaj, a prominent transparency activist and anti-graft crusader, told DW that it is of great public interest that information be made available on the funds that have been collected, their sources and how they are being spent.

"Unfortunately, all queries under the Right to Information law are being stonewalled because the government is claiming that it is not a public authority," said Bhardwaj, the founder of Satark Nagrik Sangathan, a citizens group that is involved in promoting transparency and accountability in government functioning.

Despite the government's claim, the fund continues to be housed in the prime minister's office, as per its official website, where officials manage and administer the fund on an "honorary basis." 

The trust is chaired by the prime minister, while several other top government officials, including the finance minister, are on the board of trustees.

The fund has been granted a government domain, gov.in, and its logo uses the national emblem.

'Public money' used

"Also, the trust is taking funds from public sector enterprises through their CSR [corporate social responsibility] and from government employees. So there is public money that is also going into the fund," Bhardwaj said.

Companies of a certain scale in India are legally obligated to carry out CSR activities every financial year.

Many public sector companies made contributions to the newly set up fund, while the Cabinet secretary appealed to employees in ministries and government departments to donate to the fund. 

"Essentially, at the time of taking funds, the government said that PM-CARES is a public authority but when it comes to giving information and being transparent, the government is claiming that it's not a public authority," Bhardwaj said.

"It has retrospectively changed the law to ensure that," she added.

The PMO, in its submission in court, did say the amount received has been audited and the fund's expenditure is mentioned on the website.

It broadly states that 20 billion rupees (€232 million/$268 million) were earmarked for ventilators and another 10 billion rupees for the welfare of migrant workers.

"But, unless there is granular information available, there is no way that people can monitor whether the funds are going to the right place, or whether there is corruption and no accountability can be ensured," Bhardwaj said.

"Clearly the question is: why the secrecy around a fund that is meant to benefit people at the time of the pandemic?"

Opposition criticizes government's stand

Opposition parties came down heavily on the claim that the fund was not owned or controlled by the government, with some even questioning the legality of the fund.

"The most opaque, dark fund in the world is called the Prime Minister Couldn't Care Less Fund," tweeted Derek O'Brien, of the All India Trinamool Congress party, in a throwback to his statement in Parliament last September.

"Why are accountability laws like Right to Information not applicable to this? This is an opportunism in a disaster," said the Congress party's Priyanka Gandhi Vadra.

Sitaram Yechury, leader of the Communist Party of India (Marxist), called PM-CARES a "fraud" and "outright loot," referring to an order asking government employees to donate a day's pay toward the fund.

"This fund cannot be protected from scrutiny and transparency," he tweeted. "SC [Supreme Court] must hear expeditiously petitions challenging its Constitutional validity, pending before it for more than two years."

A failed fund?

When the coronavirus pandemic hit in 2020, many governments around the world anticipated a severe economic downturn in addition to the health crisis. While the wealthier nations could marshal vast resources to deal with the crisis, the rest of the world was faced with the prospect of having to depend on aid and assistance.

The primary objective of the fund, according to its official website, is to "deal with any kind of emergency or distress situation, like [the situations] posed by the COVID-19 pandemic, and to provide relief to the affected."

Part of the fund was supposed to go toward shoring up the health care infrastructure, including the purchase of ventilators and oxygen for hospitals. But more than a year after it was constituted, the fund failed to adequately provide essential supplies during the catastrophic second wave.

Bhardwaj said it was impossible to determine whether the fund served its purpose during the second wave without having access to more information about it.

"Unless one has information on what it was used for, how does one say how useful it was? That is, I think, really at the heart of the issue," she said.

"It is really baffling that the government is not willing to share information because, according to them, there is absolutely nothing to hide," Bhardwaj said. "If PM-CARES says it has provided ventilators, then where is the problem and why shouldn't the government tell people?"

Questions around whether the funds allocated made it to the intended beneficiaries have also been raised repeatedly since the second wave.

"In India, where there are problems with corruption and abuse of power, one of the most important ways to ensure that money reaches intended beneficiaries is to have transparency. ... This [lack of transparency] is leading to a lack of accountability and goes against the people's fundamental right to know," she said.