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Daily News Analysis

PM CARES Fund gets FCRA exemption without meeting pre-condition of CAG audit

12th September, 2020 POLITY AND GOVERNANCE

Context: The PM CARES Fund has received exemption from all provisions of the law meant to regulate foreign donations, although it does not seem to meet the pre-condition of being a body established and owned by the government whose accounts are audited by the Comptroller and Auditor General of India (CAG).

Government Clarification:

  • Responding to a recent query under the Right to Information (RTI) Act asking for details and documents on the exemption, the Home Ministry said it had to “seek the consent” of PM CARES before giving out the information, as it would be considered a “third party” under the RTI Act.
  • It also invoked the clause that allows information to be denied if it is held as part of a fiduciary relationship.img
  • PM CARES Fund “has received exemption from operation of all provisions of the Foreign Contribution (Regulation) Act, 2010” or FCRA.
  • In the last few days of March, the Fund collected ₹39.68 lakh in foreign currency donations. It is not clear how much of the rupee donations were also from foreign sources.

Foreign Contribution (Regulation) Act, 2010 (FCRA)

  • It is meant to regulate the acceptance and use of foreign contributions and to prevent their use for activities detrimental to national interest.
  • This includes gifts and monetary contributions from foreign sources, whether in Indian or foreign currency.
  • Organisations, which wish to receive foreign donations must have a definite cultural, economic, educational, religious or social programme, and must register under the Act, and receive a clearance from the government.
  • Section 50 of the Act allows the Central government to issue orders exempting any organisation (apart from political parties) from the provisions of FCRA if it feels it necessary or expedient in public interest, subject to conditions specified in the order.
  • In July 2011, the Home Ministry issued an order exempting all bodies established by a Central or State Act which are required to have their accounts audited by the CAG.
  • Earlier this year, on January 30, 2020, it issued a fresh order superseding the previous one, “to exempt organisations (not being a political party), constituted or established by or under a Central Act or a State Act or by any administrative or executive order of the Central Government or any State Government and wholly owned by the respective Government and required to have their accounts compulsorily audited by the Comptroller and Auditor General of India (CAG) or any of the agencies of the CAG”.


  • It is a public charitable trust registered under the Registration Act, 1908.
  • It was not set up through a Central or State Act.
  • It has argued that it is not a public authority under RTI; all bodies established by the government are public authorities under that Act.
  • The Fund is audited by an independent auditor, not by the CAG.