The setting up of a special fund -- PM CARES Fund - for providing relief to those affected by COVID-19 has invited controversy after people questioned the need for a new fund when the Prime Minister's National Relief Fund (PMNRF) is already in existence.

The PM CARES, or the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund, has been set up as a public charitable trust. The Prime Minister is the chairman of this trust and its members include Defence Minister, Home Minister And Finance Minister.

The questions that people have raised primarily are on the utility and advantages of having a separate fund when the PMNRF is for exactly the same purpose, when it was registered, and under which act, etc.

The statement issued by the government justifies the setting up of a fund by saying that distress situations, whether natural or otherwise, demand expeditious and collective action for alleviating the suffering of those affected, mitigation/control of damage to infrastructure and capacities etc. It also says that the Prime Minister's office has been receiving spontaneous and innumerable requests for making generous donations to support the government in the wake of this emergency.

So why a separate fund when the Prime Minister's National Relief Fund is already there? The justification coming from the government sources is that while PMNRF is for all kinds of natural disasters, PM CARES fund is specially meant for COVID-19 similar pandemic situations.

The government officials also say that any spending from the Consolidated Fund of India needs to be passed by the Parliament, therefore, creation of a donation-based fund means that legislature hurdle is taken care of.

There are others who believe that a separate fund for COVID-19 relief would encourage more people to contribute in the fund because everyone is impacted by Coronavirus outbreak.

"COVID-19 has impacted people across the country. Therefore, PM CARES attaches a cause to it. Everyone is feeling for this cause. An earthquake in Andaman or a storm in Orissa is not something for which people would have same level of concern as that of a pan-India disaster like COVID-19. Hence, a separate fund for COVID-19 relief makes perfect sense," says Mohit Chaudhary, a Supreme Court lawyer and managing partner of law firm Kings and Alliance.

Virag Gupta, a Supreme Court lawyer, also dismisses the questions on setting up of a new fund as he feels the COVID-19 outbreak is one-off crisis, which needs special attention.

As for the question on legalities of setting up a charitable public trust, Virag Gupta says that any kind of a trust has to be registered, and the PM CARES Fund must have been registered as per the relevant laws.

However, Mohit Chaudhary of Kings and Alliance says these relief funds are different kinds of charitable funds and they are not governed by laws and regulations meant for ordinary charitable trusts. So, he feels that with PM as the chairman of the trust and defence minister, home minister and finance minister as its members, legal issues like registration of the trust, etc will hardly be an issue.

The PM CARES Fund tries to differentiate itself from PMNRF by enabling micro-donations. The statement issued by the government specifically says that the fund will enable micro-donations as a result of which a large number of people will be able to contribute with smallest of denominations.

One can donate as low as Rs 10 in the PM CARES Fund, while the minimum one can donate in PM National Relief Fund is Rs 100.

The contribution towards PMNRF is used to offer immediate relief to families of those killed in natural calamities such as floods, cyclones and earthquakes, etc and to the victims of the major accidents and riots. The fund is also used to partially pay for expenses for medical treatment like heart surgeries, kidney transplantation, cancer treatment and acid attack etc. The fund consists entirely of public contributions and does not get any budgetary support. The PM National Relief Fund had a balance of Rs 3,800 crore as on 31 March 2019.

The contribution towards PMNRF is 100 per ccent tax deductible under Section 80 G of the Income Tax Act. Though contribution towards PM CARES Fund will also get Section 80 G tax benefits, it is not clear if there 100 per cent deduction will be allowed. Not all donations under Section 80 G are eligible for 100 per cent tax deductions.

Contributions towards PM CARES Fund will be an eligible expenditure under the Corporate Social Responsibility (CSR) obligations. Under CSR, companies have to spend 2% of their last year's profit towards social causes.

Many corporate houses like Reliance Industries, JSW Steel, etc have contributed to PM-CARES Fund.