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Relevance: GS-II (Governance, RTI, Transparency); GS-III (Disaster Management) Source: Governance & Transparency Updates, 2026

1 · What is the core issue?

When disasters strike, where does our donation money go? During the COVID-19 pandemic, Indian citizens and companies donated thousands of crores to the newly created PM CARES Fund. Today, Right to Information (RTI) activists are raising a serious alarm: the fund has not released its financial audit to the public for the last three years.

2 · Understanding the Clash

Step 1: The Fund’s Creation
Created in March 2020 for health emergencies. The PM is the Chairperson, alongside the Defence, Home, and Finance Ministers as trustees.
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Step 2: The Government’s Shield
The Centre argues it is a private trust because it runs strictly on voluntary donations, uses zero tax money, and is therefore exempt from the RTI Act.
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Step 3: The Activists’ Counter-Argument
Activists say a fund run by top Union Ministers, which collected automated donations from government employee salaries, is clearly a “Public Authority.”
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Step 4: The Transparency Void
Because of this legal definition as a “private trust,” the fund has not published audited financial statements for three years, hurting public trust.

3 · Key Governance Concepts

Public Authority
Under the RTI Act
According to Section 2(h) of the RTI Act, any body “controlled” by the government is a public authority. The entire debate is whether the PM managing the fund counts as state “control.”
NDRF
The Official Alternative
The National Disaster Response Fund (NDRF) is the official government fund for crises. It was created by Parliament and is strictly audited by the government.
CAG Audit
The National Watchdog
The Comptroller and Auditor General (CAG) checks government spending to ensure zero corruption. Because PM CARES claims to be a private trust, it successfully blocks the CAG from auditing it.
CSR Benefits
Corporate Perks
Despite being called private, companies that donate to PM CARES legally get to count it towards their mandatory Corporate Social Responsibility (CSR) duties, raising ethical questions.

UPSC Prelims Quick Facts: Legal Framework
Supreme Court Precedent (2020) The Supreme Court ruled that donations to PM CARES are purely voluntary. Therefore, it does not form part of the government’s official funds and is exempt from a mandatory CAG audit.
Tax Exemptions To encourage philanthropy, donations made to the PM CARES Fund qualify for a 100% tax deduction under Section 80G of the Income Tax Act.
FCRA Clearance Unlike ordinary NGOs that face strict bureaucratic hurdles, PM CARES is exempt from the Foreign Contribution Regulation Act (FCRA), allowing it to quickly accept huge overseas donations.
Accountability Gap The last available financial data for the fund corresponds only to the financial year ending March 31, 2023, triggering the current transparency debate.

MCQ Practice Question
Q. With reference to the PM CARES Fund and disaster management financing in India, consider the following statements:

  1. The PM CARES Fund was established as a statutory body under the Disaster Management Act, 2005.
  2. Contributions made by corporations to the PM CARES Fund legally qualify as Corporate Social Responsibility (CSR) expenditure.
  3. The Supreme Court of India ruled that the PM CARES Fund must be compulsorily audited by the Comptroller and Auditor General (CAG).

Which of the statements given above is/are correct?
(a) 1 and 2 only    (b) 2 only    (c) 1 and 3 only    (d) 1, 2 and 3

Answer: (b) 2 only

  • Statement 1 — Incorrect: The PM CARES Fund is a public charitable trust, not a statutory body. The NDRF is the actual statutory body created under the Disaster Management Act.
  • Statement 2 — Correct: The Companies Act was explicitly amended by the government to allow corporate donations to PM CARES to count towards their mandatory CSR spending targets.
  • Statement 3 — Incorrect: In 2020, the Supreme Court upheld the government’s stance, ruling that because PM CARES is built on voluntary contributions, it does not require a mandatory CAG audit.
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