Several companies seem to be using PM Cares as an opportunity to qualify for CSR breaks, even as they lay off employees or cut their salaries.

A Twitter shoutout and then silence Where does the PM Cares money really go
Voices Opinion Wednesday, May 13, 2020 - 14:23

On May 12, Prime Minister Narendra Modi announced that the government would be rolling out an economic package to deal with the coronavirus crisis and the economic slowdown. Put together, the package would be worth Rs 20 lakh crore, he said, equivalent to about 10% of the GDP.

Details are awaited – Finance Minister Nirmala Sitharaman is expected to reveal more in the days to come – but the public is used to waiting. It's been nearly two months since the Centre set up the Prime Minister's Citizenship Assistance and Relief in Emergency Fund, or the PM Cares Fund, and the general public is still clueless about details of the fund and how it's being spent.

The PM Cares Fund was established on March 28 with the primary objective of “dealing with any kind of emergency or distress situation” and to “provide relief to the affected”. In other words, the PM Cares Fund is identical to the Prime Minister’s National Relief Fund, established in 1948 by then Prime Minister Jawaharlal Nehru – just with a catchier name. The PMNRF had a balance of Rs 3,800 crore as of December 2019, which begs the question as to why a separate fund was required in the first place.

Funnily enough, the PMNRF website includes a banner soliciting contributions to the PM Cares Fund too. 

The PM Cares website meanwhile contains no details of donors, amounts collected, or any information regarding the utilisation or earmarking of funds. Its trust deed is not publicly available for scrutiny, and the government has announced that the fund will be audited by “independent auditors”, not the Comptroller and Auditor General.

The lack of transparency and accountability bears stark resemblance to a certain electoral bonds issue.

So far, multiple public sector undertakings, organisations, companies, employee associations, and individuals have come forward and generously donated to the PM Cares Fund.

The question is: are we blindly donating money?

What is the Centre doing on the ground?

An effective way of battling this pandemic is to adopt a decentralised approach, like the successful Bhilwara model applied in Rajasthan to combat COVID-19. The same applies to collecting of funds – states have Chief Minister’s Relief Funds for this very purpose. So, why form such a massive central pool of monetary resources?

Some reasons come to mind: the genuine urge to help people; a sign of solidarity; claiming a tax break; or fulfilling a company’s legal obligation to spend on corporate social responsibility. The Prime Minister has even shown how contributions to his fund can get you his individual attention, given that he has taken a shine to personally highlight individuals on Twitter for their donations.

Sadly, when we look at COVID-19 relief efforts on the ground, the Centre is missing in action. Instead, state governments, NGOs, companies, political parties and individuals are all involved in relief efforts, from providing daily meals and dry rations to those who need it, to donating personal protective equipment, ventilators and hand sanitiser.

Yet it’s the Centre that’s quick to advertise that more than 33 crore “poor people” received financial assistance of Rs 31,235 crore as on April 22, 2020. But before we congratulate them on their magnanimous feat, the financial assistance works out to an average of around Rs 950 per person, to survive a 30-day plus lockdown.

In terms of the centralised procurement of COVID-19 test kits, the Centre, through the Indian Council of Medical Research, imported faulty test kits at an inflated rate — something that came to light only when a legal dispute between the importer and distributor of the tests kits became public. The order has since been cancelled.

As far as boots on the ground goes, the Centre did constitute and send multiple teams to report on the states’ preparedness and actions, but the output wasn’t quite what you’d expect.

Take Tamil Nadu, for example, governed by the BJP’s ally, the AIADMK. Hours before the central government announced that a team would undertake a three-day visit to Chennai to take stock of COVID-19 relief efforts, the Tamil Nadu government announced a four-day “strict lockdown” in Chennai and other major cities — a lockdown within a lockdown, if you will. The result was panic buying as people rushed to markets and stores. Physical distancing went out the window.

The central team was satisfied with Tamil Nadu on its handling of the situation in Chennai, even as Chennai has seen nearly 300 new cases a day for the past week, and over 500 cases on May 11. Compare this to the period before the “strict lockdown”, when positive cases in Chennai fluctuated between 20 and 50 per day.

The lack of coordination between the central and state governments is obvious, beginning with the four-hour notice for the lockdown in March, taking both citizens and state governments by surprise.

The Centre’s priorities lie elsewhere

Throughout the lockdown, media houses have highlighted how the Centre’s lockdown measures left the poor and marginalised in the lurch. Public transport was suspended and the movement of citizens between states was banned, forcing thousands of people to walk hundreds of kilometres back to their hometowns. News channels, websites and newspapers were peppered with images of migrant workers marching down national highways, even as solicitor-general Tushar Mehta told the Supreme Court on March 31 that “no one is now on the road.”

Yet the central government had a different set of rules and permissions for those who have access to social media. Indians abroad were evacuated and repatriated back to India, students studying in Kota’s coaching centres were ferried back home across state borders, and pilgrims from Gujarat were allowed to return from Haridwar.

It’s a rare example of the Centre showing concern for a minority group — the minority being those who have access to social media, who will answer the Prime Minister’s call to clap, bang plates, and light candles as a form of hollow appreciation for frontline workers. Meanwhile, the majority are walking home, or are stuck in labour and relief camps.

At a time when the central government is controlling costs by freezing dearness allowances of government staff until July 2021, earning revenue by hiking the excise duty on petrol and diesel, and raising funds by borrowing Rs 11,250 crore from the Asian Development Bank, you’d imagine that this would translate into investments in our healthcare system, or humanitarian relief.

But the Centre seems to have its priorities misplaced. Between April 22 and 24, while the lockdown was underway, an expert appraisal committee of the Ministry of Environment, Forest and Climate Change recommended the granting of green clearance to the expansion and renovation of the parliament building in Delhi at an estimated cost of Rs 922 crore. This is part of the Rs 20,000-crore Central Vista redevelopment project.

Why then should we place our trust in a fund called “PM Cares” when the evidence is quite to the contrary?

Picking the Prime Minister over paying employees

It’s important to look at how contributions to the PM Cares Fund are being made, and the manner in which they’re collected.

Staff members of various government departments have been asked to “contribute voluntarily” to the fund. Opting out requires them to intimate the concerned revenue officer in writing, and in some cases with the reason. It’s the same reasoning of Aadhaar not being compulsory, but having an Aadhaar card is pretty much required.

Take the Indian Railways, for example. The railway ministry is donating Rs 151 crore to the fund, raised via its employees who will donate one day’s salary. The same ministry is, ‘indirectly’, charging migrant workers, who have lost their sources of income, steep fares to go back home.

Then there’s the public sector undertakings, which are bullied into contributing towards the Cente’s pet projects as part of their CSR programmes. For example, Indian Oil contributed Rs 21.83 crore to the Statue of Unity in 2016-17. This year, Indian Oil contributed Rs 225 crore to the PM Cares Fund

To put this into perspective: Indian Oil’s CSR budget for 2018-19 was Rs 490 crore, used across 981 projects and benefiting thousands of people. This is the same company whose employees at the Bongaigaon refinery in Assam complained about “retrenchment and salary cut” during the lockdown.

Next, there’s the National Mineral Development Corporation, a fully owned public enterprise, which contributed Rs 150 crore towards the PM Cares Fund. At the same time, it owes the Chhattisgarh government over Rs 1,000 crore in dues and penalties.

Private companies aren’t far behind. Larsen & Toubro contributed Rs 150 crore to the fund in March. In April, 1,500 labourers contracted to the company agitated in Hyderabad over the non-payment of wages. A similar group of labourers followed suit in May in Visakhapatnam, over non-payment of wages and no food being arranged.

Yes Bank, recently in the news for financial mismanagement, secured a government-approved bailout. Its additional tier 1 bonds, worth Rs 8,415 crore, owed to investors, were written down to zero. It then proceeded to contribute Rs 10 crore to the PM Cares fund.

Ola Cabs launched a fund to support and offer relief to its driver community, stating that the COVID-19 crisis has “left thousands of drivers...without an income”. It still managed to contribute Rs 5 crore to the PM Cares Fund.

CureFit did the same, curiously choosing to combine a statement about donating Rs 5 crore to the PM Cares fund and other Relief Funds with the news of pay cuts and layoffs. Chennai-based Zoho Corp also cancelled bonuses and is reportedly planning pay-cuts, even as it donated Rs 25 crore to the PM Cares fund.

This list is by no means extensive, but all the organisations do have one thing in common: Twitter.

Social media recognition

Various ministers were quick to respond on social media to the Prime Minister’s urge to contribute to PM Cares, tweeting the amounts contributed by the public sector undertakings that fall under the ambit of their respective ministries. Coal Minister Pralhad Joshi, for example, announced that Coal India had contributed Rs 220 crore and NLC Rs 25 crore, while Power Minister RK Singh said Rs 925 crore would be contributed by the companies that comprise the Central Public Sector Enterprises.

Contributions made by companies like Zoho and Ola were announced by their respective founders or promoters from their personal accounts, and were duly retweeted by Modi’s personal Twitter handle. Sridhar Vembu, the co-founder and chief executive officer of Zoho, made no mention as to whether his Chennai-based company had also contributed to the Tamil Nadu Chief Minister’s Relief Fund.

To be fair, Modi also retweeted contributions made by common citizens as well, highlighting that no matter how small the contribution, it makes a difference.

All this, and we have no clue where the money’s gone or how it’s being used. This leads us to the question: What is the price we’ll end up paying, where a retweet from the Prime Minister is a reward for a contribution to a fund that’s shrouded in mystery?

While this need for validation, recognition and publicity plays out, remember that the PM Cares Fund has an unfair advantage over state relief funds. On April 10, the Ministry of Corporate Affairs issued a circular that clearly stated that contributions to the PM Cares Fund qualify for CSR expenditure, while those to Chief Minister’s Relief Funds do not. This, while states are already starved of funds.

The circular, in the form of “frequently asked questions”, also notes that the payment of salaries and wages to employees and workers during the lockdown “shall not qualify as admissible CSR expenditure”. The fact that this needs to even be said is both bizarre and worrying. It’s perhaps an indication that companies are prioritising CSR expenditure over the payment of salaries and wages, qualifying for tax breaks and benefits instead, even as several state governments have relaxed labour laws in the wake of the COVID-19 crisis.

So, given the lack of information and transparency, and our inability to hold accountable those in power, should we even be contributing to the PM Cares Fund?

Abhilash Sridharan works in the IT Sector in Chennai, and follows politics in India closely. Views expressed are the author’s own.

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