Thursday, 14 July 2011


Member of Parliament Local Area Development Scheme

This scheme is fully funded by the GOI and was started in 1993 by PV Narasimha Rao. The objective of the scheme is to enable MPs to recommend works of developmental nature, in response to locally-felt needs, with emphasis on the creation of durable community assets to be taken up in their Constituencies. Durable assets include roads, schools, public health centres and hospitals, drinking water and sanitation facilities etc. 

The Scheme was started with a Rs 5 lakh allocation per MP which has today increased to Rs.5 crore per annum per MP constituency. The annual bill of the scheme will now be Rs 3,950 crores.

Under this scheme, each MP has the choice to suggest works to the District Collector. Special attention to SC and ST areas of constituencies is mandated with an allocation of 15% and 7.5% of MPLAD fund to be spent towards their development. Recent changes in guidelines also provide the MPs with a choice to spend upto Rs.10 lakh annually in any part of the country (in the spirit of national unity and fraternity). The Rajya Sabha Member of Parliament can recommend works in one or more districts in the State from where he/she has been elected. The Nominated Members of the Lok Sabha and Rajya Sabha may select any one or more Districts from any one State in the Country for implementation of their choice of work under the scheme. Also 2% of the allocated amount has been set aside for meeting administrative costs to implement the scheme. This 2% is included in the total allocation. The Ministry of Statistics and Programme Implementation has issued the guidelines on Scheme Concept, implementation, and monitoring. 

Criticism & Debate:
1.    The MPLAD Scheme has been at the centre of much debate. The first point was whether elected representatives should perform functions of the executive  to implement development projects or not. The Left parties have consistently opposed the MPLAD scheme on the same ground saying the job of MLAs and MPs is to deliberate on policy and frame laws. The Second ARC too has supported this stand by saying that such schemes “seriously erode the notion of separation of powers, as the legislator directly becomes the executive”. The ARC recommended that the scheme be scrapped.
2.    Such works can be haphazard and, as a planning commission report noted maintenance of assets is often under-budgeted. 
3.    The constitutional validity of the scheme was questioned in a petition. Consequently in May 2010, a 5-Judge Constitution Bench upheld the constitutional validity of the MPLAD scheme. However the bench noted that the SC does not judge the ‘veracity of the scheme’ and called for robust monitoring.
4.    The scheme has been criticized for rampant corruption. The latest performance audit by CAG for the period 2004-09 noted several instances where the funds were used for the benefit of private interests. ‘In 100 sampled districts of 29 states and union territories, an expenditure of Rs 73.76 crore was incurred on 2,340 such works during 2004-09’, the CAG report for 2010-11 said.
5.    Other shortcomings mentioned by CAG are:
a.    Though MPLADS is meant for “locally felt need for development works”, the CAG report says there is no mechanism to identify the local needs. No guideline to ensure peoples participation.
b.    State level monitoring committees to review progress has not even been constituted in three states/UTs and are non-functional in most other states.
c.    The scheme was most active during the election time, indicating that it was being used more as election sops.
d.    Works worth Rs 9.45 crore were executed without any recommendation from the MPs.
e.    MPs are not to select the implementing agency as per the guidelines, it is the responsibility of the District Authority (mostly the District Collector). But  MPs had recommended implementing agencies for more than 8,700 works. [Thus facilitating corruption-instances when MPs were taking bribes from contractors to allot MPLAD works-Operation Chakravyuh in 2005]
f.     Utilization of funds with district authorities ranged from 37.4 to 52.4 percent.
g.    The ministry of statics and programme implementation (MoSPI) has not been closing monitoring the receipt of utilization certificates and completion certificates.

        6.     The revised guidelines (2011) which allow release of 75% of funds in first installment,
    widen the suggested-works are also being critiqued for making corruption easier.

13/7/11- GOI has called for a review of expenditure done in MPLADS and an account of the unspent funds. The ministry estimates that over Rs 2,600 crore funds are lying idle with district authorities and accounts for 10 per cent of the total funds released under MPLADS from the previous Lok Sabha and Rajya Sabha. According to officials, the problem of unspent balances has become more acute after the delimitation of constituencies in 2008. The exercise led to creation of new constituencies and also changed the area under existing constituencies. As a result, after the 2009 general election, district authorities were unsure of how and where to distribute the unspent funds under the MPLADS.


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