22nd April – MPLAD

MPLAD Scheme

The Central Government recently decided to suspend the Member of Parliament Local Area Development (MPLAD) fund scheme for two years and this decision has been taken in view of the huge funds requirement to fight coronavirus.

What is it?

  • The MPLAD scheme was introduced in 1993. The purpose of the scheme was to enable MPs to create durable assets based on local requirements of their respective constituencies.
  • The scheme is administered as per guidelines issued from time to time. The present limit for each MP is ₹5 crore per year.
  • Unutilised funds can be carried over to the next year. Like any other, this scheme too was introduced with a noble purpose to enable MPs to develop their own constituency based on the local need and requirement.
  • There were many lacunas in the administration of the scheme at the ground level and often the MPs have deviated from the original purpose of the scheme. MPLAD funds were mostly under-utilised and misused. Reports from the Comptroller and Auditor General (CAG) list out various lapses in the implementation of the scheme. The CAG observed flouting of rules and corruption while implementing the scheme.

Issues in the MPLAD Scheme as per CAG Audit Report (2011) –

The following are some of the irregularities pointed out under CAG audit report.

  • Construction projects – Various construction works that are ‘not permitted’ had been executed on the recommendation of MPs. For example, construction or renovation of building for government offices, hospitals, railways stations, jail premises, bus stations for State transport corporations, private institutions are not permitted under the scheme, but had been executed. The CAG report pointed how premises of temples, churches, and madrasas for religious purposes were wrongly carried out. Even funds were paid to PM/CM relief fund and works for individual benefit, sports competitions, etc., were carried out even though these were not permissible.
  • Handing over of assets and assets not put to use – The scheme mandates that as soon as a work is completed, it should be transferred to the user agency for public use. Out of the 15,049 sample works created during 2004-09, handing over was not on record for 14,828 cases, which is 98.53 per cent of the works created.
  • Misuse of funds – There are many allegations of misappropriation of funds under the scheme. For example, last year, it was alleged that the CAG has found fraud and bungling by the Union Textile Minister in making payments of ₹5.93 crore from MPLAD funds to a cooperative society of BJP members.
  • Political use – As per the scheme, carrying over of unspent amount is allowed. A study published in 2017 shows that during the period from 2009 to 2014, MPs irrespective of party ideology, spent less in the beginning of the term. Majority of the unspent balance and new funds were spent in the last year of the term. This enables them to spend the amount just before the general election to woo the voters with some pet scheme.
  • Corruption – It is widely alleged that MPs use these funds and get a percentage as commission. When there are 788 MP seats, the funds available under the scheme come to (788 x 5 x 5) ₹19,700 crore for a term in Parliament. The MPs are alleged to use this avenue to enrich themselves. There seems to be no local development but only self-development of MPs.

Way forward –

When the MPs are well paid, they should not try to usurp public funds in the name of financing Local Area Development. The government must discontinue the MPLAD scheme, so that such taxpayers’ money can be used in a far better way. The cut in pay of MPs also should be permanent which can be utilised to carry out the developmental work in their respective constituencies.

SourceThe Hindu Business Line

QUESTION – What is MPLAD Scheme? What are the issues involved in the scheme? Should it be discontinued? Suggest a way forward.

Leave a Comment

Your email address will not be published. Required fields are marked *