Explained: How MPLAD scheme works, and how far its suspension will help Covid-19 fight

MPLAD is a central government scheme, under which MPs can recommend development programmes involving spending of Rs 5 crore every year in their respective constituencies.

Earlier this month, the government suspended the Member of Parliament Local Area Development (MPLAD) Scheme so that these funds would be available for its COVID-19 management efforts.

Following the Centre’s announcement, UP Chief Minister Yogi Adityanath suspended the state’s MLALAD scheme for a year, a move that will allow the state to spend Rs 1,500 crore on COVID-related efforts.

A look at the scheme, and the implications of the move:

What is the MPLAD Scheme?

MPLAD is a central government scheme, under which MPs can recommend development programmes involving spending of Rs 5 crore every year in their respective constituencies. MPs from both Lok Sabha and Rajya Sabha, including nominated ones, can do so.

States have their version of this scheme with varying amounts per MLA. Delhi has the highest allocation under MLALAD; each MLA can recommend works for up to Rs 10 crore each year. In Punjab and Kerala, the amount is Rs 5 crore per MLA per year; in Assam, Chhattisgarh, Maharashtra and Karnataka, it is Rs 2 crore; in Uttar Pradesh, it was recently increased from Rs 2 crore to Rs 3 crore.

How much will the suspension contribute to the Centre’s efforts to manage the pandemic?

Suspension of the MPLAD Scheme will make Rs 7,800 crore available to the government. For comparison, this is only 4.5% of the Rs 1.70 lakh crore relief package for the poor announced under the Pradhan Mantri Garib Kalyan Yojana.

Opposition MPs have reacted sharply. Adhir Ranjan Choudhary, leader of the Congress Legislature Party in Lok Sabha, termed the move a gross injustice towards people’s representatives. RJD MP Manoj Jha said the diversion of MPLAD funds would centralise their administration and decrease the efficiency of their disbursal.

How does the scheme work?

MPs and MLAs do not receive any money under these schemes. The government transfers it directly to the respective local authorities. The legislators can only recommend works in their constituencies based on a set of guidelines. For the MPLAD Scheme, the guidelines focus on the creation of durable community assets like roads, school buildings etc. Recommendations for non-durable assets can be made only under limited circumstances. For example, last month, the government allowed use of MPLAD funds for the purchase of personal protection equipment, coronavirus testing kits etc.

The guidelines for use of MLALAD funds differ across states. For example, Delhi MLAs can recommend the operation of fogging machines (to contain dengue mosquitoes), installation of CCTV cameras etc. After the legislators give the list of developmental works, they are executed by the district authorities as per the governments financial, technical and administrative rules.

When did the scheme start?

Prime Minister P V Narasimha Rao announced the scheme on December 23, 1993 in Lok Sabha. He mentioned that it was being started at the request of MPs across parties. Opposition to the proposal came from CPI(M) MPs Nirmal Kanti Chatterjee and Somnath Chatterjee.

This happened during a tumultuous year for Rao’s minority government. Earlier that month, Parliament was agitated that the government was trying to clip Election Commissioner T N Seshan’s wings by converting the EC into a multi-member body. Months earlier, the government had survived a controversial trust vote in Lok Sabha. And in May that year, Lok Sabha witnessed the first impeachment proceedings in India’s history, against High Court Judge Justice V Ramaswami. These events led some commentators to suggest that the scheme was an attempt by the minority government to appease MPs. Over the years, the scheme was adopted and adapted by state governments.

How long are the schemes supposed to continue?

The central scheme has continued uninterrupted for 27 years. It is budgeted through the government’s finances and continues as long as the government is agreeable. In 2018, the Cabinet Committee on Economic Affairs approved the scheme until the term of the 14th Finance Commission, that is March 31, 2020.

In the recent past, there has been one example of discontinuation of a Local Area Development scheme. Bihar Chief Minister Nitish Kumar discontinued the state’s scheme in 2010, only to revive it before the 2014 general elections.

What has been the impact of the MPLAD scheme?

In 2018, when continuation of the scheme was approved, the government noted that “the 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”.

Until 2017, nearly 19 lakh projects worth Rs 45,000 crore had been sanctioned under the MPLAD Scheme. 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”. Further, 82% of the projects have been in rural areas and the remaining in urban/semi-urban areas.

Why has the scheme been sometimes criticised?

The criticism has been on two broad grounds. First, that it is inconsistent with the spirit of the Constitution as it co-opts legislators into executive functioning. The most vocal critic was a DMK ex-MP and a former Chairman of the Public Accounts Committee, Era Sezhiyan. He said the workload on MPs created by the scheme diverted their attention from holding the government accountable and other legislative work. The National Commission to Review the Working of the Constitution (2000) and the Second Administrative Reforms Commission, headed by Veerappa Moily (2007), recommended discontinuation of the scheme. In 2010, the Supreme Court held that the scheme was constitutional.

The second criticism stems from allegations of corruption associated with allocation of works. The Comptroller and Auditor General has on many occasions highlighted gaps in implementation.

Chakshu Roy is Head of Outreach, PRS Legislative Research