Suspension of MPLAD scheme
The Members of Parliament Local Area Development Scheme (MPLAD) is a central government scheme, under which MPs can recommend development programmes involving spending of Rs 5 crore every year in their respective constituencies. MPs from both Lok Sabha and Rajya Sabha, including nominated ones, can do so. This scheme was started in 1993 in Lok Sabha and has continued uninterrupted for 27 years.
Last year, the government temporarily suspended the Member of Parliament Local Area Development (MPLAD) Scheme for two years so that these funds would be available for its COVID-19 management efforts. Suspension of the MPLAD Scheme will make Rs 7,800 crore available to the government.
Note: States have their version of this scheme with varying amounts per MLA. Delhi has the highest allocation under MLALAD; each MLA can recommend works for up to Rs 10 crore each year. In other states the amount is between 2 to 5 crore each year. In Bihar, MLALAD scheme was discontinued in 2010, only to revive it before the 2014 general elections.
How does the scheme work?
- MPs and MLAs do not receive any money under these schemes. The government transfers it directly to the respective local authorities. The legislators can only recommend works in their constituencies based on a set of guidelines.
- For the MPLAD Scheme, the guidelines focus on the creation of durable community assets like roads, school buildings etc. Recommendations for non-durable assets can be made only under limited circumstances. For example, the government allowed use of MPLAD funds for the purchase of personal protection equipment, coronavirus testing kits etc.
What has been the impact of the MPLAD scheme?
- In 2018, when continuation of the scheme was approved, the government noted that “the entire population across the country stands to benefit through the creation of durable assets of locally felt needs, namely drinking water, education, public health, sanitation and roads etc, under MPLAD Scheme”.
- Until 2017, nearly 19 lakh projects worth Rs 45,000 crore had been sanctioned under the MPLAD Scheme.
- Third-party evaluators appointed by the government reported that the creation of good quality assets had a “positive impact on the local economy, social fabric and feasible environment”.
- Further, 82% of the projects have been in rural areas and the remaining in urban/semi-urban areas.
Why has the scheme been sometimes criticised?
- Against Doctrine of Separation of Power: National Commission to Review the Working of the Constitution (NCRWC) and Second Administrative Reforms Commission both have recommended scrapping of the scheme because it goes against principle of demarcation of responsibilities between Executive and the Legislature.
- Previously, this scheme was challenged in the Supreme Court as being violative of Articles 275, 282, the 73rd and 74th Amendment, and the constitutional design itself.
- Non – utilisation of funds: In the 16th Lok Sabha, Central Government released INR 1,757 crore towards this scheme in the first year, of which only 16% was spent. 278 of the 543 Lok Sabha constituencies did not receive any amount.
- Undermines role of Local governments: Local governments are best suited to assess local needs and are better placed to respond to them than State or Central governments. But MPLADS allows MPs to overstate their authority and step on jurisdiction of local bodies which are, ironically, devoid of funds.
- Poor quality of assets: About 46.4% of works were allocated less than INR 50 thousand while works with allocation of INR 5 lakhs or more constitute only 3.6%. Many of these small works are petty works. This is not in conformity with the objective of creating durable assets.
- Prone to high corruption: Comptroller and Auditor General (CAG) has highlighted cases of corruption and misappropriation of funds. Private contractors (which are not permitted) are engaged to implement the works and expenditure has been incurred on works prohibited under the scheme.
- Lack of awareness lack of adequate information in MPs: MPs of both Rajya Sabha and Lok Sabha have recommended works in the same district and of same nature. This has led to disproportionately large amount of money flowing into one district.
- Weak Monitoring: Monitoring and supervision is the weakest part of the scheme. This is due to inadequate infrastructure available to District Authority vested with the responsibility.
Arguments in favour of scheme:
- In any developing nation, the aspiration for better quality public goods and an enhanced standard of living is a legitimate desire. The expectation, therefore, from public representatives to contribute to this paradigm is strong.
- That’s why, it was formulated to enable the members of Parliament to identify small works based on locally felt needs in their constituencies.
- The broad focus of the scheme is on clean drinking water, primary education, public health, sanitation and roads. Thus, aimed at fulfilling the basic need of the society.
- In 2010, a five-judge bench of the SC held the scheme to be intra vires of the Constitution and declared “Indian Constitution does not recognise strict separation of powers.
- Even though MPs have been given a seemingly executive function, their role is limited to ‘recommending’ works and actual implementation is done by the local authorities. Therefore, the scheme does not violate separation of powers.
- Contrary to popular perception, MPLAD funds cannot be spent at the discretion of an MP in any manner he/she wants. There is a set of guidelines mandating the utilisation of the monies. These diktats are updated regularly and are available on the website of the Ministry of Statistics and Programme Implementation.
- A complete breakdown of how the money is utilised is also available under the Right to Information (RTI). The funds spent are subject to audit by the Comptroller and Auditor General of India.
- Moreover, the MPs can only recommend development works and the money is electronically transferred to the concerned executing agency directly by the district administration.
- Most MPs use their MPLAD funds judiciously and guard them zealously. For them, it is a constant battle between great hopes and scarce resources.
- Coming to COVID-19, many MPs acted even before the government got its act together, for they have their ear to the ground always. Individually and collectively, they represented to the presiding officers of both the Houses to relax the guidelines in order to enable them to procure the necessary wherewithal to fight this pandemic.
- While centre has suspended the MPLAD scheme, most of the state has left MLALAD scheme untouched. Thus, the suspension of MPLAD scheme may affect the position of MPs vis-a-vis MLAs.
Way Forward:
- Coordination between MPs and implementing agencies: There is a need for greater co-ordination between MPs of a state on one hand and between MPs and nodal agencies on the other for selection of appropriate district for recommended works.
- Creation of durable assets: The asset intended to be created should be described in detail so that its cost implication is clear. This will enable MPs to allocate adequate funds for completion of work leading to creation of durable assets.
- Efficient utilisation of funds: To tackle the issue of large unspent balances which have accumulated and are rising over the years, fund can be made lapsable. This way funds lying unused can be put to other uses.
- Engaging private contractors: The guidelines need to be amended to allow hiring of private contractors since government departments may lack necessary infrastructure for completion of works. This will ensure faster completion of works.
- Impact Assessment: For the scheme to be more effective, an impact assessment study should be undertaken at the constituency level, annually, to assess the benefits of the works implemented to the community at large.
- Role of Panchayati Raj Institution (PRI): Kottayam experience shows that participatory planning has worked well with MPLADS. PRIs, as an implementing agency, have also acquired skills of implementation, considerably improving their role.
