Vote bond scheme ‘undermines’ voluntary nature of donations to Prime Ministers’ relief fund
By Rosamma Thomas*
The Prime Minister’s National Relief Fund (PMNRF) is intended to collect voluntary donations from the general public, whether individuals or organisations, to enable assistance to people in the event of a natural disaster or for expensive medical treatments. However, this fundamental voluntary nature of the fund has changed in recent years.
The January 2018 Official Gazette notice announcing the election bond regime states, in Article 12(2): “The amount of bonds not collected within the fifteen-day validity period shall be deposited by the authorized bank in the Prime Minister’s national relief”. The Union Government therefore, by notification, ordered funds to be deposited in what was supposed to be purely voluntary.
Commodore Lokesh Batra, who has campaigned for transparency in the workings of government, argues that once a gazette notice has been issued ordering funds to be deposited in the PMNRF, the character of the whole fund has changed, and it must, without a doubt, become subject matter under the Right to Information Act.
The Central Public Information Officer, Prime Minister’s Office, in response to an appeal filed by Commodore Batra in October 2020, said: “The Prime Minister’s National Relief Fund is not a public authority within the meaning of article 2 (h) of the RTI law. , 2005. However, relevant information regarding the PMNRF can be found on the website – pmnrfgov.in.
It is pertinent to quote the story here: A Press Information Bureau communiqué of January 24, 1948 states: Publication has begun, detailing the plight of people moving as refugees from the newly formed Pakistan to India .
“Donations, which will be announced in the press, may be sent to the Central Bank of India, New Delhi, or to any of the branches or sub-branches of the bank,” the 1948 statement read, inviting to donations and adding that donations could also be earmarked for specific purposes, such as medical aid, education or the care of orphans.
Contributions from government budget sources or public sector company balance sheets are not accepted into the Fund; conditional contributions are also not accepted, although donors can indicate their preferences.
The corpus of the fund, drawn entirely from voluntary donations, was invested in regular commercial banks and other agencies, and disbursements were made with the approval of the Prime Minister. A 2018 Delhi High Court judgment said that in 1973, the PMNRF was registered as a “Trust” for the purpose of providing exemption from income tax; in 1985, the management of the trust was entrusted to the Prime Minister.
The Delhi HC ruling argues that since disbursements are made at the discretion of the Prime Minister in his capacity as a constitutional authority, they should be considered formal decisions. “As can be seen from the above, it is reasonable to conclude that there is government control in the management of the PMNRF. Therefore, the conditions of clause (i) of section 2(h)(d) are satisfied.
Commodore Lokesh Batra (Retired) discovered that over Rs 20 Crore had been deposited into the PMNRF through the Election Bond Scheme
Accordingly, the PMNRF is considered a “public authority” within the meaning of the RTI Act,” the court said.
The PMNRF was not incorporated by Parliament and the Fund, since approximately 1973, has been recognized as a trust under the Income Tax Act. It is managed by the Prime Minister, who can delegate his responsibility; the work of the PMNRF is carried out by the Prime Minister, assisted by officers and staff on an honorary basis. It operates out of the Prime Minister’s office and pays no licensing fees.
It was formed soon after independence, and the initial 1948 press release mentions that the chairman of the Congress party would serve on its steering committee. The PMNRF is exempt under the Income Tax Act 1961 for reporting purposes. Contributions are deducted at 100% from taxable income.
Through Right to Information requests, Commodore Lokesh Batra (Retired) discovered that over Rs 20 Crore had been deposited into the PMNRF through the Election Bond Scheme in this way.
How then, asks the defense force veteran, can the PMNRF claim to be made up entirely of voluntary donations? “Billionaires buy election bonds and donate to political parties without paying bank fees or commissions. Political parties receive these large sums without paying taxes. It is the ordinary people, the taxpayers, who bear the cost of printing election vouchers and pay the bank charges.
Since voter bond plan filings are made through notification and are not voluntary, aren’t there legal issues that need to be addressed? However, if the 1948 press release had been adhered to and all donations had been announced in the press, transparency could have been achieved without repeated requests from RTI.