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Development at discretion of MPs
By Sudhirendar Sharma

Since its launch in 1993, the MPLAD scheme has remained controversial amid charges of corruption and inefficiency; still the new government wants to increase the annual allocation from Rs 2 crore to Rs 5 crore.

      It is a baggage that the congress-led ruling alliance finds it tough to disown and a parliamentary privilege that the honorable members would not like to surrender. Raising the annual allocation under the Member of Parliament Local Area Development Scheme (MPLADS) from Rs 2 crore to Rs 5 crore can only please the members, ideological differences can wait. The fact that the proposal has been pushed ahead of the Supreme Court’s judgement on petition challenging the scheme is somewhat disturbing.

Ever since it was launched by the Narasimha Rao government in 1993, the scheme has remained controversial on account of charges of corruption and inefficiency. Aimed at discouraging defections, the scheme has been widely believed to be a political incentive funded out of the exchequer. If the sting operation that had caught seven MP’s seeking bribes for doling out contracts under the scheme on December 20, 2005 has been any indication, the scheme has lived up to its dubious origin.

The origin of MPLADS

The MPLAD scheme was announced on November 23, 1993 by the then PM, P.V. Narsimha Rao after opposition MPs demanded that all MPs should be given equal resources to undertake development projects in their areas since areas represented by opposition members remained backward. The MPs also mentioned that the central planning authority was not able to provide a regional perspective for planning development, so the MPs should be given the authority and funds to recommend development projects in their areas.

Initially, a token amount of Rs.5 lakhs per MP was fixed, which was increased to Rs.1 crore in 1994, and again raised to Rs.2 crores from December 1998. Initially, the Ministry for Rural Development was the monitoring agency, but since 1994 the Ministry for Statistics and Programme Implementation has been the nodal agency monitoring the scheme. The scheme has guidelines about works that can be undertaken, like there should be ‘locally felt needs’ and ‘durable capital assets’ being created.


Nothing seems to have changed since! Conversely, it may have worsened as the ongoing review of the scheme in several states by the Comptroller & Auditor General reflects. From delayed commissioning of works to diversion of funds and from irregular payments to siphoning of resources, the scheme is a veritable menu on corrupt practices. MPs in Andhra Pradesh have gone a step further, parking as much as Rs 64 crore in fixed deposits to earn interest. The list of violations seems endless!      

The UPA government’s resolve to enhance allocation under MPLADS seems a throwback to the days of the benevolent feudal landlord who would dole out favors to please the selected few.

Can a scheme that has been full of flaws, both in design as well as in its execution, be effectively regulated? The Minister of Statistics and Program Implementation Shriprakash Jaiswal has gone on record to argue that corruption in most public transactions is inevitable. This clearly means that neither is corruption a crime nor a sin that cannot be accepted as a social reality. It must therefore be doubted if the Parliament can frame effective regulations to keep corruption by its fraternity under check!

The flip side of the story is that strict regulation will only bring further decline in fund utilisation. CAG has already reported that some 60 per cent of the provisionary amount never gets spent for the purpose it is meant, indicating that the scheme has not been seriously pursued by most members. What purpose does the scheme serves when its beneficiaries are unwilling on its effective execution?

In several States, CAG has cited factors like insufficient and late disbursal of funds, sanctioning of inadmissible works, a large number of works lying incomplete, lacunae in work inspection and inadequacy of monitoring mechanism in MPLAD scheme.

Even where the money has been utilised, it is doubtful whether the money was utilised for the sanctioned purpose. Also, the work undertaken is generally of poor quality, at times in violation of the guidelines of the scheme, and not necessarily catering to local needs.

Although a review of the MPLAD Scheme has been recommended several times, governments have not taken steps to prevent misuse of thousands of crores of public money.

The UPA government’s resolve to enhance allocation under MPLADS seems a throwback to the days of the benevolent feudal landlord who would dole out favors to please the selected few. And it contravenes the ruling alliance much appreciated recent decision to bar its elected members from using their erstwhile feudal titles like ‘raja’. It doesn’t make sense to refrain the members from using feudal titles while vesting public funds with them to further discretionary powers contained therein.

It goes without saying that within the constitutional framework the role of legislature is to frame pro-people policies and to ensure effective utilization of public resources for generating public goods, and not indulge in actual execution of works. The National Commission to Review the Working of the Constitution had found design flaws in suggesting that MPLADS be discontinued as it isn’t consistent with the spirit of federalism and encroaches on areas under Panchayati Raj institutions.

Far from legitimizing a flawed scheme, the government should honor its constitutional obligation of strengthening the three tiers of democracy. Building a community centre or a bus shelter by an MP only weakens the foundation of elected democracy and erodes peoples’ faith in it. And, continues persistence with a flawed scheme only exposes the hidden intentions of the government at the cost of it’s much acclaimed ‘aam aadmi’ image.'      

There is one way in which a semblance of order can be brought about in this widely rubbished scheme – divert allocation under MPLADS to NREGA

It will be erroneous to assume that public memory is short-lived on matters of corruption in high offices of the government. On the contrary, public perception on the scheme remains undeterred as a vast majority firmly believes that the discretionary annual fund has perpetuated corruption ever since MPLADS was launched in 1993? Ironically, the members haven't let them down either!  

However, there is one way in which a semblance of order can be brought about in this widely rubbished scheme – divert allocation under MPLADS to NREGA with an added obligation for each of the MP’s to play supervisory role in monitoring its effective utilisation within their respective constituencies. Over Rs 7,500 crore of public money is currently at stake every year, which is slated to increase to whopping Rs 20,000 crore should the present proposal get through.

Disclaimer: The views expressed above are personal and do not necessarily reflect the views of d-sector editorial team.

Sudhirendar Sharma  |  Environmentalist, development analyst and columnist  |  sudhirendarsharma@gmail.com

Dr Sudhirendar Sharma is an environmentalist and development analyst. Formerly with the World Bank, Dr Sharma is an expert on water, a keen observer on climate change dynamics, a critic of the contemporary development processes. A prolific writer, he was a senior correspondent with India's leading weekly, India Today, and the science editor for The Pioneer newspaper. He holds degrees in agriculture and environmental science and lives in Delhi. He is attached with the Ecological Foundation.

Write to d-sector  |  Editor's Note

Corruption Watch

The bad news is that corruption has not only sustained but has grown in size and stature in the country. With scams being a regular feature, seventy per cent respondents in a survey have rightfully opined that corruption has continued to increase in India. One in every two interviewed admit having paid a bribe for availing public services during last one year. Transparency International's latest survey reveals that the political parties top the chart for the most corrupt public institutions, followed by police force and legislatures. No wonder, India continues to make new records on the global corruption arena!

The shocking revelation is that the health and education sectors haven't remained untouched by this phenomenon. With 5th and 6th positions respectively for these sectors on the public perception chart on corruption, corruption has crept insidiously into these sectors of hope for the masses. With bureaucracy being fourth in the list of corrupt institutions in the country, corruption seems to have been non-formally institutionalized with little hope if public services would ever be effective in the country. With economic growth having literally institutionalized corruption, are we now expecting corrupt to be socially responsible - a different CSR.

Poor. Who?

Not giving 'aid' to India is one thing but calling it 'rich' is quite another. If one in three of the world's malnourished children live in India, what does average daily income of $3 indicate? It perhaps means that there is a relative decline in poverty - people are 'less poor' than what they used to be in the past. But having crossed the World Bank arbitrary threshold of $2 a day does not absolve the 'developed' countries of their obligation to part with 0.7 per cent of their Gross National Income in development aid. Should this three-decade old figure not be revised?  

An interesting debate in UK's House of Commons delved on future of development assistance by the British Government. While prioritizing limited resources has been a concern, there has been no denying the fact that development aid must be guided towards tangible gains over a short period of time to start with. There are difficult choices for elected governments to make - should they invest in long-term primary education or in short-term university scholarships? Which of these will bring gains and trigger long-term transformation in the society. As politicians continue to be divided on the matter, poverty persists!!   

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