Coronavirus Outburst: What Is PM CARES Fund? What Financial Challenges Lie Ahead?

If we speculate as to how different PM CARES fund is from the existing PMNRF, when it serves the same purpose, it can be considered just as an add-on or a targeted fund especially for the outbreak.

India   |   7 April 2020 3:42 PM GMT / Updated : 2020-05-05T13:02:20+05:30
Editor : Prateek Gautam | Creatives : Nandan M
Coronavirus Outburst: What Is PM CARES Fund? What Financial Challenges Lie Ahead?

After a nationwide lockdown that was declared on 24th March, with regard to the novel coronavirus COVID-19 outbreak in the country, Prime Minister Narendra Modi via twitter announced the construction of a new public charitable trust, Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund).

The Centre and several State governments announced relief packages to those who are affected by the lockdown, such as a 1.7 lakh crore relief package for the poor 'aiming at providing a safety net for those hit the hardest.'

Till now, there is no official release of the amount of contribution made, but an
estimated contribution
, nor there is any dedicated site for this new public charitable trust. Issue of transparency over the kind of income and expenditure done with the new relief fund can also be seen compared to the Prime Minister National Relief Fund (PMNRF).
Yet, this raises a couple of questions among few citizens, speculating this new relief fund - 'PM CARES' - when there is already an effectively settled PMNRF, which serves the similar purpose of managing natural calamities. This statement can't even be cross-questioned as the coronavirus was declared a 'notified disaster' by the Ministry of Home Affairs.
If we speculate as to how different PM CARES fund is from the existing one, when it serves the same purpose, it can be considered just as an add-on or a targeted fund especially for the outbreak, mostly a marketing strategy showcasing the absolute concern of the government over the pandemic as a lot of things that are happening at the same time are like optics.
Several cases of shortage of basic protective health gear equipment such as masks, equipment, coveralls have continuously been reported for weeks since the outbreak has been declared as a global pandemic. Medical and Paramedical staff are exposed to more severe forms of infection which they are exposed to while treating the patients.
We have more than twenty manufactures producing medical equipment who were already exporting such kits to Europe and the U.S, as when the crisis was at initial point, immediately these countries sourced equipment from India as an alternative to China. So, the case building was already taking place by Indian manufacturers on that front.
After weeks, the government recently said that it was trying to procure medical gear both from domestic firms as well as countries like South Korea and China to meet the shortages.
These issues do raise the question why the pace at which the contributions are being made compared to the pace at which it's being spent holds a huge margin?

"People are contributing to their level best but it is equally important for the government to lay down all the different avenues or the programs through which this fund is going to be spent and maintain clear transparency," says Prof. Biswajit Dhar, Jawaharlal Nehru University while talking to The Logical Indian.

Worry still accelerates as the government has still not announced a full-fledged package to address different problems arising from this pandemic. The scheme/package was announced for people at the bottom of the ladder, but the government needs to do much more than that and that kind of announcement is still awaited.

If we see the problems faced by different sections of the society today and how does one address this, there is no clear guideline from the government. For instance, some state governments have announced some subsidised rations/packages, but the issue that pertains here is when the workers from these informal sectors don't even have enough money in hand to buy that subsidized ration, how does the government ensure that it reaches to the intended beneficiaries?

Initially the government announced that the payment will be made through Pradhan Mantri Jan-Dhan account, but issue that sticks with it is that most of the intended beneficiaries are now on road and so even if money comes in, how are they going to access those accounts, if someone is registered in a different region - that's a big question mark! Simply assuming that many of them have bank accounts and the direct benefits initiated by the government are reaching them would not suffice, as they are currently footloose.

The government itself seems to be in a quandary, as to how to make sure these problems associated with the outbreak can be resolved and met along with the outbreak itself. But one thing is for sure, that they need to be addressed immediately.

If we consider the present resource position of the government today, we will realise it's in a dire state. The resources with the government, such as revenue loss due to GST, along with the problem of the economy slowing down. The tax revenue projected in the '19 budget by the government was nowhere near to the evaluated budget amount. Plus, there was a huge disinvestment program carried out by the government, which was unsuccessful as the market was not in a position for it to take place. So, today the situation is that despite the funds through any of the domestic and international means, there really isn't the 'luxury' of resources.

Another thing that we might be going through is a 'demand slump.' An instance that can be taken is that of the government's significant deduction of corporate taxes, because of which almost about ₹20,000 crores was foregone by the government. Logic behind this was if they give the tax breaks, corporations would then come and invest and get the economy back on track which didn't happen. No one is buying things and that automatically leads to corporations not investing in any new planting missionaries, that could have contributed to the much needed resources during this pandemic. The government lost a lot of resources and corporations did not invest.

The questions and issues raised along does not, in any circumstance, intend to be cynical of the above made contributions but construes as questioning the good intentions of the government as the recovery from this pandemic is a national initiative.

In terms of magnitude, if we consider the first round of spending, i.e, ₹1.7 lakh crores (a bit of which was already budgeted), along with to-be-the estimated amount collected through the 'PM CARES' fund, it is for sure far less compared to what the government actually needs.

In the days ahead, the government should lay down all the schemes and measures it wants to take to address the concerns of the people in distress. It won't be just people directly affected by COVID-19, but the victims of all the disruption that has taken place due to this pandemic. More resources need to be garnered along with a proper rescue package that needs to be put out in order for the economy to recover from this crisis.

Also Read: Prepare 'Graded Plan' To Open Areas That Are Not COVID-19 Hotspots: PM Modi To Ministers

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