Labour ministry under-utilises funds by nearly half, despite greater need during COVID-19

Livelihoods: The Parliamentary Standing Committee on Labour has raised concerns over the under-utilisation of funds in the various schemes of the Ministry of Labour and Employment.

The panel observed that the under-utilisation of funds by nearly half the allocated budget had impacted the performance of certain schemes thereby defeating the purpose for which they were set up, namely to benefit vulnerable groups. It added that this was particularly distressing in a year where large groups of people had been severely impacted by the COVID-19 pandemic.

In its report that was presented in Parliament on March 16th, the panel said that although the ministry’s expenditure for the current fiscal was increased on account of the launch of Pradhan Mantri Gareeb Kalyan Yojana (PMGKY), it could only spend about 52.8 percent of the funds till March 15th.

Following the roll out of PMGKY, the ministry’s allocation was revised upwards from the budget estimate of INR 12,065.49 crore to INR 13,719.56 crore for 2020-2021. This was done to boost the economy during the COVID-19 crisis, the report stated.

In addition to this, the INR 1,000 crore allocated for the Atmanirbhar Bharat Rojgar Yojana (ABRY) scheme in 2020-2021 saw zero utilisation “due to non-dispersal of funds”.

The report further expressed concern over the ministry’s inability to meet physical targets in many major schemes. “While some schemes, like the coaching-cum-guidance centres for the SCs/STs, had achieved the targets, others, like the training centres for working children and the Pradhan Mantri Shram Yogi Maan-Dhan Yojana (PMSYM), which achieved 1.18 lakh enrolments out of the target of 2 crore new enrolments, had not.”

Read this article on why the Union Budget fails to address the problem of rural employment.

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.