PM CARES Fund Declared Public Authority Sparks Federalism Debate Over CSR Contributions

Kerala Joins PM SHRI, Raises Federalism Questions Amid PM CARES Transparency Concerns

The United Democratic Front government in Kerala has reversed its earlier opposition and agreed to roll out the Prime Minister’s Schools for Rising India (PM SHRI) programme in state‑run schools. The decision comes as the state grapples with education arrears of ₹1,466 crore and seeks central funding, while a parallel controversy over the PM CARES Fund’s opaque accounts fuels a broader debate on fiscal accountability and federal balance.

PM SHRI is a centrally‑sponsored initiative aimed at upgrading infrastructure, digital classrooms and teacher training in government schools. The Centre bears 60 % of the project cost; the remaining 40 % must be met by the participating state. Nationwide, 13,095 schools across 776 districts have been enlisted, including 33 Kendriya Vidyalayas and 14 Navodaya Vidyalayas in Kerala.

• ▸The scheme targets schools from primary to higher‑secondary level.
• ▸Central funding covers capital expenditure such as smart boards and laboratory equipment.
• ▸States are required to contribute their share within a stipulated timeline, failing which the project stalls.
• ▸Kerala’s MoU with the Centre was signed during the previous LDF administration but remained unimplemented until the UDF’s recent endorsement.

The programme’s financial design reflects the Union’s intent to standardise education quality while preserving state discretion over curricula.

Federalism and the Constitution

India’s federal structure is anchored in Article 245, which delineates the law‑making competence of Parliament and State Legislatures, and Article 256, which obliges states to comply with Union laws. Article 257, however, curtails unwarranted central interference in state administration, preserving the “indestructible” nature of the Union affirmed by the 42nd Amendment. These provisions constitute the basic structure doctrine, upheld in the landmark Kesavananda Bharati Case and reiterated in subsequent jurisprudence.

• ▸Article 245 vests legislative power in the Union and the States, subject to the Union List, State List and Concurrent List in Schedule VII.
• ▸Article 256 mandates that states give effect to Union laws, enabling schemes like PM SHRI to operate across the country.
• ▸Article 257 restricts the Union from exercising executive power in a state except where expressly provided, safeguarding state autonomy.

Thus, while the Centre can finance education projects, it cannot dictate the syllabus, a point the Kerala government has insisted upon.

Financial Stakes and State‑Centre Dynamics

Kerala’s education department reports arrears of ₹1,466 crore, a burden that intensifies the appeal of centrally‑sponsored funds. The IUML, now holding the education portfolio, argues that accepting PM SHRI does not compromise the state’s syllabus control but provides much‑needed capital. Politically, the shift also neutralises earlier accusations that the previous LDF government was facilitating a “saffronisation” agenda.

• ▸The state’s share of PM SHRI projects amounts to 40 % of total project costs.
• ▸Kerala’s 33 Kendriya Vidyalayas and 14 Navodaya Vidyalayas stand to receive infrastructure upgrades under the scheme.
• ▸The MoU signed earlier remains binding, compelling the current administration to honour its financial commitments.
• ▸Education arrears of ₹1,466 crore represent roughly 3 % of Kerala’s total fiscal deficit for the current year.

These figures illustrate how fiscal constraints can drive states to negotiate the terms of central schemes, testing the limits of cooperative federalism.

PM CARES Fund and Transparency

The PM CARES Fund, created in March 2020 as a public charitable trust, has been criticised for operating outside the ambit of the Right to Information Act 2005. Although audited statements for FY 2022‑23 are available, no subsequent accounts have been disclosed, raising questions about parliamentary oversight and the fund’s classification as a public authority.

• ▸The fund’s opening balance as of 31 March 2023 was ₹5,415.65 crore.
• ▸Voluntary contributions during FY 2022‑23 totaled ₹909.64 crore, bringing total receipts to ₹6,723.07 crore.
• ▸Payments amounted to ₹439.38 crore, leaving a closing balance of ₹6,283.68 crore.
• ▸No audited financial statements have been released for FY 2023‑24, and the fund remains exempt from RTI queries.
• ▸The Ministry of Corporate Affairs retrospectively amended the Companies Act rules to shield the fund from public