PM CARES Fund: Financial Position and Transparency Debate

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PRERNA FOR IAS

         Mehnat Aapki, Guidance Humari

         Roz ki Prelims Practice — Experts ke Saath

PM CARES Fund: Financial Position and Transparency Debate

Context

The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) has again come into focus following publication of its audited accounts for FY 2024–25. The fund was created on 27 March 2020, during the COVID-19 pandemic, to provide relief during emergencies, disasters and public-health crises. It is structured as a public charitable trust and is funded through voluntary contributions rather than budgetary support.

Structure and Purpose

The Prime Minister is the ex-officio Chairperson, while the Defence, Home and Finance Ministers are ex-officio trustees. The fund can receive domestic as well as foreign contributions. Donations qualify for 100% deduction under Section 80G, and eligible corporate donations can count towards CSR expenditure. The fund also has permission to receive foreign contributions.

Historical Role

PM CARES was initially used extensively during the pandemic for measures such as health infrastructure, ventilators, oxygen-related facilities and assistance programmes. It was later used for the PM CARES for Children Scheme, designed to support children who lost parents or guardians during COVID-19.

Financial Position

According to the FY 2024–25 accounts cited in recent reports, the fund’s closing balance reached about ₹8,452 crore. A substantial share remained invested in fixed deposits, generating significant interest income. This has revived discussion over whether a large emergency corpus should remain invested for future crises or be deployed more actively for disaster relief and preparedness.

Transparency and Accountability Issues

PM CARES has faced continuing debate over institutional transparency. It does not receive budgetary support and is audited by an independent chartered-accountancy firm rather than the CAG; the official website presently identifies KKC & Associates LLP as its auditor. Questions have also arisen regarding its status under the RTI Act, parliamentary oversight and disclosure standards.

Current Status

As of September 2026, PM CARES continues to operate as an emergency-response charitable trust supported by voluntary contributions. The larger policy issue is therefore not merely the size of the corpus, but the need to balance rapid emergency availability, prudent investment, transparency and public accountability. A strong framework for disclosure of receipts, expenditure, outcomes and unused balances can improve public confidence while preserving the fund’s ability to respond quickly during major national emergencies.

Analytical Questions

1. Should PM CARES be brought under the RTI Act?

Answer: There is a strong case for greater disclosure because the fund is headed by the Prime Minister and deals with large public donations. At the same time, emergency funds need speed and flexibility. A balanced approach would be regular public disclosure of donors, spending, beneficiaries, audit findings and outcomes without slowing urgent relief work.

2. Is keeping a large share of PM CARES money in fixed deposits a good policy?

Answer: It has both advantages and risks. Fixed deposits protect the corpus and generate interest for future emergencies. But too much idle money may raise questions when disaster needs are immediate. The better approach is to maintain a clear emergency reserve while using surplus funds for preparedness, health infrastructure and disaster resilience.

3. Should PM CARES be audited by the CAG?

Answer: CAG audit could improve public confidence because it would bring stronger institutional oversight. However, PM CARES is structured outside the Consolidated Fund of India and is presently audited by an independent firm. A practical middle path could be stronger statutory disclosure standards and periodic independent review, even if its present legal structure continues.

4. Why was PM CARES created when the Prime Minister’s National Relief Fund already existed?

Answer: PM CARES was created during an extraordinary pandemic and was designed for a broader range of emergencies, including health crises and disasters. Still, the existence of two major relief funds can create confusion. India should clearly define their separate roles, funding rules and spending priorities to avoid duplication and improve accountability.

5. What should be the long-term role of PM CARES after the COVID-19 period?

Answer: It should evolve from a crisis-response fund into a strong emergency preparedness mechanism. Part of the corpus can support hospitals, oxygen systems, disaster equipment and rapid-response capacity. But spending should follow clear rules. The fund should also publish measurable outcomes so citizens can see how emergency money is being used.