In the background of COVID19 crisis, the Central Government of India recently suspended the Member of Parliament Local Area Development Scheme or MPLADS for two years.
This fund was launched to enable Members of Parliament to aid developmental works in their respective constituencies and create durable community assets based on local needs.
What is MPLADS?
The implementation of MPLADS is entrusted with Members of Parliament Local Area Development Division.
Launched in 1993, the scheme provides each MP with the choice to suggest to the District Collector for works to the tune of Rs.5 Crores per annum to be taken up in his/her constituency.
The objective is to create durable community assets and for the provision of basic facilities including community infrastructure based on locally felt needs.
There is a special focus on areas inhabited by Scheduled Caste and Scheduled Tribe population by earmarking 15% and 7.5 % of the MPLADS funds respectively. Thus, out of an amount of Rs.5 Crores, the M.P. shall recommend for areas inhabited by the S.C. population, Rs.75 lakhs, and Rs.37.5 lakhs for areas inhabited by S.T. population.
There is a ceiling of Rs.50 lakhs that can be spent from MPLADS fund, for works of a particular Society/Trust in its lifetime. To encourage trusts and societies for the betterment of tribal people, this ceiling is enhanced to Rs. 75 lakhs.
The Ministry of Statistics & Programme Implementation (MoSPI) is the nodal department responsible for policy formulation and release of funds.
The state nodal departments are responsible for supervision and monitoring.
The district authorities are responsible for work scrutiny, cost estimation, identification of the implementing agency, and transfer of funds. The scheme mandates that Panchayati Raj Institutions be preferred as the implementing agency.
Each MP will recommend works up to the annual entitlement to the concerned District Authority, who will get the eligible sanctioned works executed as per the established procedure of the State Government.
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 based on unspent amount and utilization certificate. The funds are non-lapsable and can be carried forward.
Issues with MPLADS
- The scheme gives an executive function to legislators and thus it violates the principle of separation of powers. Even though MPs only recommend projects and the final implementation is made by the district authorities, in most cases, all recommended projects are executed. However, the Supreme Court in a judgment delivered on May 6, 2010, held the scheme to be constitutional.
- Some serious lapses observed by the Comptroller and Auditor General (CAG) of India, include:
- Expenditure incurred by the executing agencies being less than the amount booked.
- Utilization of funds between 49 to 90% of the booked amount.
- The scheme envisages that works should be limited to asset creation, but 78% of test-checked works recommended were for improvement of existing assets.
- Selection of works prohibited by the scheme guidelines.
- Wide variations in quantities executed against the quantities specified in the BOQ (Bills of Quantity).
- Use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works;
- Delays in issuing work orders.
- Extensions of time granted to contractors without following the correct procedure.
- Register of assets created, as required under the scheme, not maintained.
- The scheme guidelines mandate that as soon as work was completed, it should be transferred to the user agency and be put to public use. However, over 98% of the works created had no record of handing over to the user agency.
- Under-utilization of the MPLAD funds in various constituencies. According to some reports, 93.55% of MPs could not utilize their entire MPLADS fund from May 4, 2014, till December 10, 2018, in 4 years and 7 months. In the first year since Lok Sabha was constituted in May 2014, only 16% of the money had been spent by all the MPs put together.
- Nepotism in awarding contracts with funds under MPLADS used to oblige influential contractors or relatives.
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.
Recommendations of CAG
- The details of all works executed and that in progress should be validated and periodically reconciled with the works completion reports. These must be disclosed openly and widely circulated amongst the local people.
- A reliable data management system capturing work progress, creation of assets, utilization of funds, etc. must be created at all levels.
- Ministry of Statistics and Programme Implementation must establish a strong monitoring mechanism and accountability for maintenance of records at various levels should be prescribed.
- The monitoring committee at the state level must meet at least once in a year with wider participation of MPs.
- The District Authorities must inspect works under progress along with the MP concerned and an inspection register must be maintained to record the findings.
- Regular internal audits and periodical social audits must be carried out.
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.