Members of Parliament Local Area Development Scheme (MPLADS)

Context:

The Union government has said that it is not considering any proposal to restore Members of Parliament Local Area Development Scheme (MPLADS) funds for FY21 and FY22.

About MPLADS:

• Members of Parliament Local Area Development Scheme (MPLADS) is a scheme formulated by Government of India on 23 December 1993
• The scheme enables the members of parliaments (MP) to recommend developmental work in their constituencies with an emphasis on creating durable community assets based on locally felt needs.
• Initially, this scheme was administered by Ministry of Rural Development. Later, in October 1994, Ministry of Statistics and Programme Implementation (MOSPI) has been looking into its working.
• Funds are released in the form of grants in-aid directly to the district authorities.
• The funds released under the scheme are non-lapsable.
• The liability of funds not released in a particular year is carried forward to the subsequent years, subject to eligibility.
• The MPs have a recommendatory role under the scheme.
• The district authority is empowered to examine the eligibility of works, sanction funds and select the implementing agencies, prioritise works, supervise overall execution, and monitor the scheme at the ground level.
• At least 10% of the projects under implementation in the district are to be inspected every year by the district authority.
• Top-5 states with highest utilisation-to-released fund ratio are Telangana (101.42%), Sikkim (100.89%), Chhattisgarh (99.6%), Kerala (99.3%) and West Bengal (98.65%). The Bottom-5 states are Uttarakhand (87.22%), Tripura (88.46%), Jharkhand (88.93%), Rajasthan (90.16%) and Odisha (90.54%). Top Union Territories (UT) with highest utilisation-to -released fund ratio are Lakshadweep (111.68%), Andaman & Nicobar Islands (105.68%) and Delhi (104.1%).

How MPLADS works:

1. A Member of Parliament shall give his/ her choice of Nodal District in a prescribed format to the Ministry of Statistics and Programme Implementation with copy to the State Government and to the District Magistrate of the chosen District.
2. The annual entitlement of Rs 5 crore shall be released, in two equal instalments of Rs 2.5 crore each, by Government of India directly to the District Authority of the Nodal District of the Member of Parliament concerned.
3. Each MP shall recommend eligible work on the MP’s letter head duly signed by the MP to the district authority.
4. The District Authority shall identify the Implementing Agency capable of executing the eligible work qualitatively, timely and satisfactorily. It shall be responsible for timely and effective implementation of such works. All recommended eligible works should be sanctioned within 75 days from the date of receipt of the recommendation, after completing all formalities. The District Authority shall, however, inform MPs regarding rejection, if any, within 45 days from the date of receipt of recommendations, with reasons thereof.
5. MPLAD Scheme can be converged in individual/stand-alone projects of other Central and State Government schemes provided such works of Central/State Governments Schemes are eligible under MPLADS. Funds from local bodies can similarly also be pooled with MPLADS works. Wherever such pooling is done, funds from other scheme sources should be used first and the MPLADS funds should be released later, so that MPLADS fund results in completion of the project.
6. As soon as a work under the Scheme is completed, it should be put to public use. For greater public awareness, for all works executed under MPLADS a plaque (stone/metal) carrying the inscription ‘Member of Parliament Local Area Development Scheme Work’ indicating the cost involved, the commencement, completion and inauguration date and the name of the MP sponsoring the project should be permanently erected.
7. One MP – One Idea : In order to foster a grass-root bottoms-up approach to innovation and development and to arrive at solutions for local problems, which are sustainable and scalable, there is a need for seeking out and campaigning for ideas that have the potential to solve challenges. Accordingly, based on the innovative ideas received from the local people regarding developmental projects, a ‘One MP – One Idea’ Competition may be held in each Lok Sabha constituency annually to select the three best innovations for cash awards and certificate of appreciation for next five best innovations.

Features

1. The MPLADS is a Plan Scheme fully funded by Government of India. The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.
2. MPs are to recommend every year, works costing at least 15 per cent 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.
3. In order to encourage trusts and societies for the betterment of tribal people, a ceiling of Rs. 75 lakh is stipulated for building assets by trusts and societies subject to conditions prescribed in the scheme guidelines.
4. Lok Sabha Members can recommend works within their Constituencies and Elected Members of Rajya Sabha can recommend works within the State of Election (with select exceptions). Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
5. All works to meet locally felt infrastructure and development needs, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS as prescribed in the scheme guidelines. Expenditure on specified items of non durable nature are also permitted as listed in the guidelines.

Type of recommended work

Works which will serve greater public purpose and not purpose of few individuals need to be recommended. MPs can only recommend, but District Authorities have the ultimate power to sanction it.

• Key priority sectors : Drinking water facility, education, electricity facility, non-conventional energy resources, healthcare and sanitation, irrigation facilities, railways, roads, pathways and bridges, sports, agriculture and allied activities, self-help group development, urban development.
• Works not permitted: construction of office and residential buildings for public and private agencies, land acquisition or paying compensation, naming assets after individuals, grants or loans to state/central relief fund, assets for individual benefits, works on lands belonging to religious groups, execution of works in unauthorized colonies.
• Other works permitted: construction of railway halt station, providing CCTV camera in strategic locations, installation of bio-digesters at stations, schools, hospitals, provision for fixed weighing scale machines for farmers, installation of rainwater harvesting systems in public spaces, construction of shelters for skill development.

Since start there have been reports of malpractices in running the scheme and there have been demands to scrap it. In 2006, a scandal was exposed by a TV Channel, that showed MPs taking bribe for handing over project work under the MPLADS. A seven – member committee was set up to probe the matter.

Some new guidelines for MPLADS were announced by MOSPI :-

1. Projects implemented by government agencies would now be provided 75 per cent of the project cost as the first instalment, while those implemented by non-governmental agencies would be provided 60 per cent.
2. For smaller projects costing less than ₹2 lakh (US$2,800), the entire amount would be released at one go.
3. No project costing less than ₹1 lakh (US$1,400) would be sanctioned with exception in the case of essential projects, such as installation of hand pumps, and purchase of computers and their accessories, solar electric lamps, chaupals and equipments .
4. The basket of works that could be taken up under the scheme had been widened to include projects such as the purchase of books for libraries, and ambulances and hearse vans that would be owned and controlled by district authorities.
5. The purchase of Microsoft Office software along with the training of two teachers per school would be now allowed as part of an effort to promote computer literacy in the country.

Guidelines are given to maintain transparency of work done: 

1. A plaque should be permanently erected at the work place mentioning MP’s name, year, cost involved etc.   
2. List of complete and ongoing works under MPLADS should be displayed at District Authority office and MPLADS website (www.mplads.gov.in).   
3. Citizens can file RTI to know about the status of funds and work.
4. Funds utilised should be audited by chartered accountants, local fund auditors, or any statutory auditors as per state/UT Govt. procedure.  
5. Review meetings should be held by MoSPI in states and centre regarding fund utilization under MPLADS scheme.
6. Respective district authorities should also review work implementation with the implementation agency every month, or at least once in a quarter.

Issues Related to MPLAD Scheme

• Breach of Federalism
  • Union Government can incur expenditure only with respect to matters over which it has subject domain as per seventh schedule.
  • MPLADS encroaches upon the domain of local self governing institutions and thereby violates Part IX and IX-A of the Constitution.

• Conflict with Doctrine of Separation of Powers
  • The Scheme disturbs the scheme of separation of powers under the Constitution, as MPs are getting involved in executive functions.

• Implementation Lapses
  • MPLAD scheme gives scope for MPs to utilise the funds as a source of patronage that they can dispense at will.
  • The CAG has flagged instances of financial mismanagement and artificial inflation of amounts spent.
  • Also, the scheme is alleged to be marred by the nexus of MP and private firms.
  • Due to this sometimes spending of MPLADS funds is seen for private works, recommending funds to ineligible agencies, diverting funds to private trusts, etc.

• No Statutory Backing
  • The MPLAD Scheme is not governed by any statutory law and is subject to the whims and fancies of the government of the day.

• Some Commission Recommendations
  • In 2002, the National Commission to Review the Working of the Constitution recommended immediate discontinuation of the MPLAD scheme on the ground that it was inconsistent with the spirit of federalism and distribution of powers between the centre and the state.
  • Similar thing has also been taken by the 2^nd Administrative Reforms Commission’s report 2007.

Constitutionality of the Scheme

Based on above arguments the MPLADS was challenged in the Supreme Court (SC) in 2010. A five-judge bench of the SC held that:

• 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

• India has a quasi-federal nature of the Constitution.
  • Article 282 held that both the Union and the State have the power to make grants for a purpose irrespective of whether the subject matter of the purpose falls in the Seventh Schedule provided that the purpose is “public purpose” within the meaning of the Constitution.
  • Also, the Scheme falls within the meaning of “public purpose” aiming for the fulfillment of the development and welfare of the State as reflected in the Directive Principles of State Policy.
• Also there are robust accountability mechanisms for the scheme as it comes under the RTI Act.

CAG report on MPLADS

The Comptroller and Auditor General of India (CAG) conducted a performance audit of 128 District Authorities of 35 states/ UTs for the period 2004-05 to 2008-09 and published a report in 2010. They observed: Flouting of rules and corruption

• Cases of faulty sanction of works were found where DAs sanctioned work without recommendation from MPs, or at a higher cost than estimated.
• In almost 100 districts, funds were utilised to create non-permissible assets such as office buildings for Govt. or private entities, works for religious institutions, etc.
• In 10 states, costs sanctioned for Registered Societies/ Trusts exceeded the ceiling of Rs. 25 lakhs.
• In 9 states/UTs, MPs directly recommended an implementation agency, which is against the norms. Unspent funds.
• In 11 states/ UTs, unfruitful expenditure worth Rs. 8.50 crore was incurred due, as incomplete works were suspended or abandoned.
• Unspent balances left by predecessor Rajya Sabha MPs in 10 states were not carried forward to the new MPs.
•   Delays in sanctioning works were found. Lack of monitoring.
• 90% of audited District Authorities did not maintain asset/work register.
• Ministry could not ensure timely receipt of monthly progress reports.
• Functioning of state level monitoring committees was questionable.
• 86 District Authorities of 23 states/UT did not inspect any work in the period 2004-05 to 2008-09

Arguments in favour of MPLADs Suspension:

In an article published in The Hindu, the following points were mentioned in favour of the suspension of the MPLAD Scheme:

1. The scheme is contrary to the separation of powers where the legislators become the executors. As the scheme allows the Members of Parliament to recommend projects in a district/state; it takes away the decision-making power of the district authorities as they have no other way but to accept these projects.
2. Comptroller and Auditor General (CAG) report on the expenditure made under the MPLADS underlines the facts that the amount booked for the scheme is underused. Also, instead of asset-creation which is a prime feature of the scheme, 78 percent of the projects recommended under MPLADS were for improvement of the existing assets.
3. As per a report published in IndiaSpend:

3. 298 members out of 542 of Lok Sabha did not utilize the amount of Rs.5 crore allotted to them for MPLADS.
4. Between 4th May 2014 and 10th December 2018, 93.55 percent of the MPs couldn’t utilize the entire sum allocated under the scheme.
5. ₹5,000 crores were lying unspent with various district authorities by May 15, 2015
6. The MPLADS could be misused by the opinion-maker and the opinion-influencer. In this case, the opinion influencer could be MP’s relative or acquaintance which can be the contracting parties. Hence, instead of being a transparent and accountable project for the public, it could be used for a selfish motive.
7. The constitutional validity of the scheme had been earlier challenged in the years 2000, 2003, 2004, and 2005. Though the Supreme Court upheld the constitutional validity in 2010; many still question the scheme based on its underutilization of the funds and gross irregularities.

Why MPLADS is needed?

• The suspension of the MPLADS scheme and the blatantly undemocratic way it was announced has raised many questions, especially in a time when the funds could have been most effectively used.
• Over the years, many development projects important to the local community were implemented using the MPLADS funds. MPLADS thus helps the local people in getting an immediate response to the development needs, which if passed through the traditional system of executing via Block Development Officers will take a long time.
• Many MPs like Shashi Tharoor had utilized the funds purchasing of personal protective equipment, rapid-testing devices, infrared thermometers, and scanners. Instead, the government could have mandated that MPLADS funds should be spent entirely on COVID-19 related relief measures.
• The decentralized nature of the scheme has helped many MPs to address gaps in governance initiatives and implement small scale and time-sensitive projects within their respective constituencies. When the funds are centralized, there will be significant delays in its allocation and project implementation.
• Moreover, how the change in the scheme was brought about is worrying. The government took the ordinance route to change Budget provisions for the ongoing fiscal year and also for the next year. This is an indication of the centralization of powers and is unhealthy in a Parliamentary democracy.

Conclusion

The continuation of the scheme is much needed for providing an alternate mechanism to carry out critical development works at the local level. However, the many pitfalls of the scheme must be seriously looked into and a revamped implementation of the scheme in consonance with the CAG recommendations is desirable.

Source: The Hindu

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