MPLADS - What is it? Why was it in news recently? Issues faced & Suggestions.
In news:
MPs have written to Speaker Om Birla to restart the MPLADS.
Background:
Recently, the Government of India in the event of struggle against Covid-19 has suspended Member of Parliament Local Area Development Scheme or MPLADS funds for two years (2020 & 2021) and directed these funds to be transferred to the Consolidated Fund of India.
The Government is seeking to garner around Rs 7,900 crores by suspending the MPLADS for two years.
Conflicting views:
The government is of view that the transfer of these sums to the Consolidated Fund of India would help the judicious deployment of the fund, but political opposition has criticized this move, as in their opinion the decision may undermine the decentralized manner of funding local area development.
Apart from this political tussle, the decision has revived the debate regarding the relevance of the MPLAD scheme.
What is the MPLAD Scheme?
- The MPLAD scheme was formulated in 1993 to enable MPs to recommend development works in their constituencies with emphasis on the creation of durable community assets based on the locally felt need.
- Durable assets of national priorities and community need viz. drinking water, primary education, public health, sanitation, and roads, etc.
- Initially, the Scheme was under the control of the Ministry of Rural Development and Planning. In October 1994, the scheme was transferred to the Ministry of Statistics & Programme Implementation.
- Under this scheme, every MP is entitled to spend Rs 5 crore annually.
- Similar to MPLADS, several states have enacted schemes called Member of Legislative Assembly Local Area Development Scheme (MLALADS) where funds are given to MLAs.
- According to the ‘Guidelines on Members of Parliament Local Area Development Scheme (MPLADS)’ published by the Ministry of Statistics and Programme Implementation in June 2016, the MPLAD funds can also be used for implementation of the schemes such as Swachh Bharat Abhiyan, Accessible India Campaign (Sugamya Bharat Abhiyan), conservation of water through rainwater harvesting and Sansad Aadarsh Gram Yojana, etc.
Special focus:
MPs 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 percent for areas inhabited by S.T. population.
Release of Funds:
- 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, prioritize 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
Recommendation of works:
- Lok Sabha Members can recommend works in their respective constituencies.
- Elected members of the Rajya Sabha can recommend works anywhere in the state from which they are elected.
- Nominated members of the Lok Sabha and Rajya Sabha may select works for implementation anywhere in the country.
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 the 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 utilize 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.
Under-utilization
- 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
- Nepotism in awarding contracts with funds under MPLADS used to oblige influential contractors or relatives.
Some serious lapses observed by the 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 the 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.
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 center and the state.
- A similar thing has also been taken by the 2nd Administrative Reforms Commission’s report 2007.
Recommendations of CAG for better functioning of MPLADS
- 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 a year with the 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.
Constitutionality of the Scheme
Based on the 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 recognize the 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 the 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.
Way Forward
While the question of the constitutionality of the MPLAD scheme may have been put to rest by the Supreme Court ruling, other issues related to the implementation of the scheme still remain. These can be rectified by:
- Better transparency and monitoring of funds spent and sanctioned works.
- The scheme can be made more inclusive by including citizens for which project to be executed from MPLAD funds.
- Also, lapsable funds can put pressure on MPs for optimum utilization and prevent a build-up of unutilized funds
- Given the decentralized nature of the MPLAD scheme, with adequate monitoring and sufficient political will, it can work as an indispensable tool of development at the grassroots.
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