India’s most valued company Reliance Industries, seemingly flush with cash after the recent investments by Facebook and PE giant Silver Lake, announced salary cuts and the postponement of performance-linked payments in its hydrocarbon business. Yet, it contributed Rs500 crore to PM Cares.

Under such circumstances, it is pertinent for professionals to wonder if voluntary contributions to relief funds trump a firm’s contractual obligations to staff. This trend of companies trumpeting their donations while short-changing their own employees is bizarre.

Contributions to PM Cares can be legally counted as part of a company’s annual corporate social responsibility (CSR) contribution, according to the FAQs issued by India’s corporate affairs ministry.

While companies must assist the government machinery in these testing times, the net financial burden of CSR, it seems, is indirectly being passed on to employees. Are we looking at a scenario where corporates are using the pandemic to negate their CSR obligations and earn positive press at the expense of their staff?

The mandate of PM Cares

The questions do not end with the actions of corporates or startups. There are relevant concerns over PM Cares itself.

Its stated objective is to undertake and support relief measures concerning public health emergencies, calamity, or distress, including to create or upgrade of healthcare or any other relevant infrastructure. The fund also provides financial assistance to affected people in the form of grants or concessions.

These objectives are similar to the mandate of the Prime Minister’s National Relief Fund (PMNRF), established in 1948. The PMNRF is intended for all types of natural tragedies.

However, there are two striking differences between the two funds:

The moot question is: Given the existence of PMNRF, was it necessary to establish a pseudo-private fund with no legal mandate, and outside the purview of CAG?

The peculiar situation of supposedly distressed companies contributing significantly to the relief fund has developed a sense of mistrust between employees and corporates.

It is of little help that PM Cares is not subject to the prism of accountability.

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