MPLAD Scheme Restored

In News

• Recently, the Union Cabinet restored the Members of Parliament Local Area Development Scheme (MPLADS) that was suspended in April 2020.

Latest developments

• Suspension:
  • The scheme was suspended for two financial years (2020-21 and 2021-22).
  • The funds for the scheme were subsumed in the Consolidated Fund of India.
  • The government diverted ?8,000 crore to be spent under the scheme for fighting the COVID-19 pandemic.
• Reason for Restoration:
  • Citing economic recovery, the Government announced a partial rollback. 
  • The MPs will get ?2 crore instead of the annual approved ?5 crore.

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 being used to appease or oblige two sets of people: 
    • opinion-makers or opinion-influencers, and 
    • favourite contractors. 
  • An often-heard tale is that of the contractor being a relative, close friend, or a confidant of the MP, and the contractor and the MP being 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. 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 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 crore.
• 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 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 with financial strain themselves. 

Way Ahead

• To avoid inadequate allocation of funds for individual works, the asset intended to be created may be described in more detail so that it’s 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: TH