Issues with MPLAD Scheme

WHY IN NEWS:

• The government has decided to release the pending installments under the Member of Parliament Local Area Development (MPLAD) scheme till March 31, 2020. Earlier Union government suspended the MPLAD fund for the next two years, subsuming the funds to the central pool to fight the COVID-19 pandemic.

WHAT IS MPLAD SCHEME?

• Under the MP Local Area Development Scheme (MPLADS), each MP has 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.
• It is a Central Sector Scheme
• Who can recommend?
  • Lok Sabha Members can recommend works in their respective constituencies
  • The Rajya Sabha Members 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.
• Implemented by:
  • The scheme is under the Ministry of Statistics and Programme Implementation.
  • District Collector/District Magistrate/Deputy Commissioner is generally the District Authority to implement MPLADS in the district.
• Non-Lapsable Funds
  • Funds released to the District Authority by the Government of India are non-lapsable.
  • Funds left in the district or not released by Government of India can be carried forward for utilization in subsequent years

GUIDELINES:

• The sum can be spent only on creating permanent structures and not on perishables.
• Infrastructure and development works, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS.
• According to the given guidelines, out of Rs.5 crores a M.P. shall recommend Rs.75 lacs for areas inhabited by S.C. population and Rs.37.5 lacs for areas inhabited by S.T. population.
• In case there is insufficient tribal population in the area of Lok Sabha Member, they may recommend this amount for the creation of community assets in tribal areas outside of their constituency but within their State of election.
• In case a State does not have S.T. inhabited areas, this amount may be utilized in S.C. inhabited areas and vice-versa.
• This scheme can also be converted into individual/stand-alone projects under the Central and State Government schemes provided they meet the eligibility conditions of MPLADS.

ISSUES

• Inefficient fund utilization:
  • There are wide variations in the utilisation of the MPLAD amount in various constituencies.
  • As per report published in IndiaSpend >> 508 MPs (93.55%) did not utilise the entire MPLADS amount from 2014 till December, 2018, in 4 years and 7 months.
  • Only 35 MPs of the Lok Sabha utilised the entire amount of MPLADS during this period
  • It is clear from the details above that most MPs use money under MPLADS quite haphazardly, and a significant portion of it is left unspent.
• Implementation lapses:
  • The Comptroller and Auditor-General of India (CAG) has flagged instances of financial mismanagement and artificial inflation of amounts spent.
  • As per observations made by the CAG >> expenditure incurred by the executing agencies being less than amount booked
• Weakens Panchayati raj system:
  • MPLADS encroaches upon the domain of local self-governing institutions and thereby violates Part IX and IX-A of the Constitution.
• Against the doctrine of separation of powers:
  • There has been criticism against the MPLADS scheme that it goes against the separation of powers as it allows individual legislators to encroach on the planning and implementation duties of the executive.
  • The 2nd ARC (Administrative Reforms Commission) recommended its abrogation altogether, highlighting the problems of the legislator stepping into the shoes of the executive.
• No statutory backing:
  • The scheme is not governed by any statutory law and is subject to the whims and fancies of the government of the day.
• Lack of creation of new assets:
  • As per observations made by the Comptroller and Auditor General (CAG)>> 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
• Poor quality of work:
  • CAG report of 2019-20 >> also site >>use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works under MPLADS projects
• Lack of accountability on MPs
  • No accountability for the expenditure in terms of the quality and quantities executed against specifications
• Delays in issuing work orders
  • As per CAG report of 2019-20 >> delay in issuing work orders ranges 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
• No proper registration of assets:
  • Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified
• Lack of awareness lack of adequate information in MPs:
  • MPs of both Rajya Sabha and Lok Sabha have recommended works in the same district and of same nature.
  • This has led to disproportionately large amount of money flowing into one district.
• Monitoring and regulation:
  • The scheme was launched for promoting participatory development but there is no indicator available to measure level of participation.
• Corruption
  • Money under MPLADS are often used to appease favourite contractors >> There are instances of contractor being a relative, close friend, or a confidant of the MP, and the contractor and the MP being financially linked with each other.
• Criticism over its purpose of introduction:
  • There were allegation that the scheme was introduced in 1993 >> to gain the support of MPs in coalition politics.

ARGUMENTS FOR CONTINUATION OF MPLADS:

• Improved the role of individual MP
  • MPLADS is the only means for an MP to direct development resources to his constituency
  • It preserved the sense of direct responsibility for the well-being of constituents
• Improvement in basic amenities:
  • Entire population across the country stands to benefit through the creation of durable assets of locally felt needs, namely drinking water, education, public health, sanitation and roads etc, under MPLAD Scheme
• A vehicle for rural development:
  • Until 2017, nearly 19 lakh projects worth Rs 45,000 crore had been sanctioned under the MPLAD Scheme
  • 82% of the projects have been in rural areas
• Supreme Court held that the scheme is Constitutional
  • The constitutional validity of MPLADS was challenged in the Supreme Court of India in 1999, followed by petitions in 2000, 2003, 2004, and 2005.
  • The judgment for all these petitions was delivered in 2010, with the scheme being held to be constitutional.
  • Supreme Court ruled that there was no violation of the concept of separation of powers because the role of an MP in this case is recommendatory and the actual work is carried out by the Panchayats and Municipalities which belong to the executive organ.

SUGGESTIONS

• Ensure better coordination:
  • There is a need for greater co-ordination between MPs of a state on one hand and between MPs and nodal agencies on the other for selection of appropriate district for recommended works
• Engaging private contractors:
  • The guidelines need to be amended to allow hiring of private contractors since government departments may lack necessary infrastructure for completion of works.
  • This will ensure faster completion of works.
• Recommendations by National Commission to Review the Working of the Constitution, 2002:
  • It 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 centre and the state.

BEST PRACTICE:

• Kottayam model
  • Kottayam experience shows that participatory planning has worked well with MPLADS.
  • Panchayati Raj Institutions, as an implementing agency, have also acquired skills of implementation, considerably improving their role.

PRACTICE QUESTION:

Q. Reports of underutilisation and misutilisation of MPLADS funds continue to surface at regular intervals. In the light of this context, give suggestions to reform the scheme in an effective manner