To Scrap Or Invent?

Financial Express, September 09, 2016

In 1993, the then prime minister PV Narasimha Rao announced the “Member of Parliament Local Area Development Scheme” or MPLADS. The scheme was initiated to enable and empower MPs to develop their constituencies based on perceived local needs.

The primary duty of MPs is legislative and, therefore, one might ask, why even introduce something like MPLADS? However, it is clear that the MP’s responsibility as an elected representative of his/her constituency is also to ensure that their constituents’ developmental needs are met. This perhaps also affects the electoral prospects, which are certainly not determined by the legislative work. Therefore, MPLADS facilitates a partial fulfilment of MPs’ developmental role. There has been a constant debate on whether there is a need to reformulate the MPLADS to make it more efficient.

MPLADS is a centrally sponsored scheme fully funded by the government. Under MPLADS, MPs are given a choice of recommending development works to the tune of R5 crore per annum to the district collector of a nodal district in their parliamentary constituency. In 1993-94, when the scheme was launched, an amount of R5 lakh per MP was allotted. This was stepped up to R2 crore in FY99 and then to R5 crore in FY12. A recent proposal for five-fold increase in annual allocation to R25 crore was turned down by the finance ministry.

Working of MPLADS

Earlier, the scheme was administered by the ministry of rural development, but the ministry of statistics and programme implementation (MoSPI), is currently responsible. The organogram pertaining to the working of MPLADS starts with MoSPI at the top followed by the state nodal department, the district authority (DAs) and finally the implementing agency (IA). Supervision and monitoring is in the hands of state nodal departments. The responsibility of cost estimation, work scrutiny, identification is vested with IAs and transfer of funds is vested with the DAs. The scheme mandates that Panchayati Raj Institutions be preferred as the IA.

Performance of MPs

One of the key tests of their competence is how effective have their recommendations been for utilisation of MPLADS funds. Since 2008, internal audits by MoSPI show that majority of MPs have failed this test. As far as the 15th Lok Sabha goes, audits show that not even a single MP has been able to effectively utilise allocated funds for development in his/her constituency.

Opinions in favour of scrapping this scheme

There are many that favour scrapping MPLADS on account of violation of guidelines by MPs, DAs and IAs; ineffective utilisation/misuse of funds, poor monitoring mechanisms etc. Some petitioners have even argued for scrapping the MPLAD scheme by challenging its constitutionality before the Supreme Court. The main reasons were that the scheme violated the concept of separation of powers (as MPs become members of the executive) and there were rampant use MPLADS funds. The court observed that the role of MPs is limited to ‘recommending’ works as the actual implementation is done by local authorities. Therefore, the scheme does not violate separation of powers.

Despite the Supreme Court declaring the validity of the scheme, there are regular demands for either scrapping or reinventing the scheme. In August 2016, INLD member Ram Kumar Kashyap said in Rajya Sabha that MPs should be allowed to utilise MPLAD Fund for repair and maintenance of community assets which is not permitted as of now as per the guidelines. Even Congress vice-president Rahul Gandhi said: “If you ask MPs, at least 50% will tell you that put an end to this MPLAD scheme because the scheme does not give so much money that development work can be carried out in the entire Parliamentary seat.” Gandhi wants the scheme to be scrapped as it did not have sufficient resources to be effective in development work.

According to the Evaluation Report of Planning Commission, maintenance of assets is a major weakness. Despite explicit suggestion in the guidelines, only 55 of the 103 collectors claimed that they included some provision of asset maintenance before sanctioning civil works. There is simply no accountability on maintenance of assets created.

In 2011, the Performance Audit Report No 31 on MPLADS concluded that there is no point continuing with a scheme that has failed so spectacularly to deliver and has only furthered the politician-bureaucrat-contractor nexus—the bane of India’s governance structure. According to this CAG report, “the fact that the funds under the scheme are non-lapsable leads to a large amount of unspent balance, which is rising over the years.” Reasons for this, cited by Collectors and development functionaries, include recommendation of fewer works by some MPs and inadequate allocation for individual works. One solution to this problem, suggested by some of the MPs, is to make the fund lapsable and return the funds annually to the Ministry.

Need for structured research

In our view, the MPLAD scheme should not be scrapped as this provides feasible means for ground level development. Instead, factors that result in its inefficient utilisation and those which can improve its effectiveness should be identified and addressed. A primary reason for underutilisation is that MPs have no real knowledge of actual needs of their constituents or of the development landscape of the constituency. This can be addressed by structured research to support constituency development and planning. This will not only enable the MPs to understand the ground level reality of his/her constituency but also aid in better and planned utilisation of funds that can also ensure maintenance of assets created.

New MPs are using grievance redressal mechanisms for prioritising their constituency development agenda. However, this approach is merely targeted towards problem-solving with no development impact. Therefore, a planned approach towards development based on detailed primary survey, data analysis and empirical research that also takes into account central and state welfare schemes would yield better results. It is time to locate MPLADS in the broader context of district-level planned development, which requires a more systematic approach.

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