Member of Parliament Local Area Development Scheme MPLADS

In News

• Recently, a proposed change in rules defining the utilisation of funds under the MPLADS has elicited objections from opposition leaders.

About the recent changes made and the controversy

• Recent restoration of funds: The grant of funds under the MPLADS scheme was suspended for nearly 19 months in the wake of the Covid-19 pandemic and it was restored recently till financial year 2025-26 before some months.
• Interest earnings from the funds: The government has proposed that any interest accrued on the 5 crore annual funds that are allotted to each MP for their local area development scheme (MPLADS) has to be deposited back to the Centre.
  • All interest earnings from the funds released for each central sector scheme shall mandatorily be remitted back to the consolidated fund of India. 

Member of Parliament Local Area Development Scheme (MPLADS)

• About: 
  • The MPLADS is a Plan Scheme fully funded by the Government of India. The annual MPLADS fund entitlement per MP constituency is Rs. 5 crores.
  • It was introduced in December 1993.
  • Lok Sabha Members can recommend works within their Constituencies
  • Elected Members of Rajya Sabha can recommend works within the State of Election. 
  • Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
• Objective:
  • The objective is to enable the Members of Parliament (MP) to suggest and execute developmental works of a capital nature based on locally felt needs with an emphasis on the creation of durable assets. 
• Administration:
  • The Ministry of Rural Development initially administered the scheme. 
  • Since October 1994 it has been transferred to the Ministry of Statistics and Programme Implementation (henceforth, the Ministry). The Ministry prepared guidelines of the scheme and amended this from time to time. 
• Development of Areas inhabited by Scheduled Caste and Scheduled Tribe: 
  • There is a greater need to develop areas inhabited by Scheduled Castes and Scheduled Tribes in order to give special attention for the infrastructure development of such areas. 
  • M.Ps are to recommend every year, works costing at least 15 percent of the MPLADS entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by S.T. population. 
• Authority: 
  • It shall be the responsibility of the district authority to enforce the provision of the guideline. 
  • District Collector/District Magistrate/Deputy Commissioner will generally be the District Authority to implement MPLADS in the district. 

Arguments against MPLAD Scheme

• Separation of Powers: 
  • The scheme violates one of the cardinal principles, which though not specifically written down in the Constitution, actually permeates the entire Constitution: separation of powers. 
  • Simply put, this scheme, in effect, gives an executive function to legislators (read legislature). 
• No Accountability: 
  • No accountability for the expenditure in terms of the quality and quantities executed against specifications; 
  • Delays in issuing work orders ranging from 5 to 387 days in 57% of the works against the requirement of issuing the work order within 45 days of the receipt of recommendation by the MP; 
• Proper SoP Not followed: 
  • Extensions of time granted to contractors without following the correct procedure; 
  • Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified; 
  • The implementation of the scheme was marked by various shortcomings and lapses.
  • These were indicative of the failure of internal control mechanisms in the department in terms of non-maintenance of records”.
• Appeasement of kins or alike: 
  • Money under MPLADS is being used to appease or oblige two sets of people: 
    • opinion-makers or opinion-influencers, and 
    • favourite contractors. 
  • An often-heard tale is that the contractor is a relative, close friend, or a confidant of the MP, and the contractor and the MP are financially linked with each other.
• Gaps in Utilisation:
  • Reports of underutilisation and misutilisation of MPLADS funds continue to surface at regular intervals but there seems to have been no serious attempt to do anything about it till now. 
  • Also, there are wide variations in the utilisation of the MPLAD amount in various constituencies. 
• CAG’s Observations:
  • Implementation of the scheme has always left much to be desired. 
  • Utilisation of funds: 
    • Expenditure incurred by the executing agencies being less than the amount booked. The utilisation of funds between 49 to 90% of the booked amount; 
  • Work on existing assets: 
    • Though the scheme envisages that works under the scheme should be limited to asset creation, 549 of the 707 works test-checked (78%) of the works recommended were for improvement of existing assets; 
  • Variation in quantities: 
    • Wide variations in quantities executed against the quantities specified in the BOQ (Bills of Quantity) in 137 of the 707 works test-checked. 
    • Variations ranged from 16 to 2312%. (“2312%” is the figure actually mentioned in the audit report); 
    • Use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works.
• Various Recommendations: The National Commission to Review the Working of the Constitution (2000) and the Second Administrative Reforms Commission (2007), recommended the discontinuation of the scheme. 

Arguments in Favour of MPLAD Scheme 

• Good number of projects completed: 
  • Since the inception of the scheme, a total of 19,86,206 works/projects have been completed with the financial implication of 54,171.09 crores.
• People-centric MPs: 
  • It engaged MPs, catered to the aspirations of local people and ironed out regional imbalances.
  • 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”. 
• Addresses day-to-day Problems:
  • The responsibility of an MP does not end with the supervision of administration and legislation. 
  • The MPLAD Scheme has enabled MPs to play a leadership role in the developmental process of his constituency and sort out its day-to-day problems. 
  • The suspension of the MPLADS for 2020-21 and 2021-22 in the wake of the pandemic has done away with this vital role of MPs.
• Antidote to favouritism:
  • The pork barrel policy of State and Union Governments often leads to skewed development and regional imbalance. 
  • The elected opposition legislators of those constituencies fall victim to this pork-barrel politics. 
  • MPLADS has been an antidote to this favouritism as it provided opposition MPs with some chance to cater to the developmental needs of their constituency. 
• Aspirations of the marginalised
  • Of the MPLADS corpus, 15% has been earmarked for the development of Scheduled Castes and 7.5% for the Scheduled Tribes. 
  • Around 20 lakh of the MPLADS fund per annum has been allotted for the welfare of differently-abled people. 
  • Suspension of the MPLADS undermines the developmental aspirations of these marginalised segments.
• Proper Audit:
  • The Scheme undergoes impartial and meticulous auditing. 
  • The second instalment of funds is released only when the first instalment is fully utilised with no audit objections. This procedure leaves no place for corruption.
• Suspension Affected States: 
  • The Centre, by way of suspending the MPLAD Scheme, withheld funds for the States during the peak of the pandemic when they were battling financial strain themselves. 

Way Ahead

• There is a need to make the fund lapsable. If the concerned MP fails to recommend enough works to cover the substantial part, say 80 percent, of the fund for the year the unspent balance, may be returned to the Ministry at the Centre.
• The State nodal departments will need to be strengthened in terms of staff and other infrastructure. 
• At the ground level, the PRIs may be involved in execution as well as in monitoring to a larger extent. 
• The Collector may continue to receive funds from the Ministry and recommendations of works from MPs.
• To avoid inadequate allocation of funds for individual works, the asset intended to be created may be described in more detail so that its cost implication is clear. The MP may consider the allocation of funds only after the cost estimate is prepared and the detailed work plan and coordination mechanism is made available to him. 

Source: HT