Why suspension of MPLADS has raised hackles

Tina Edwin New Delhi | Updated on April 13, 2020

The Scheme enables MPs to demonstrate commitment to their constituencies even if project implementation is by district authorities

On April 6, in an unexpected move, the Union government suspended the Members of Parliament Local Area Development Scheme (MPLADS) for two years and decided to transfer the sum that members of the Lok Sabha and Rajya Sabha were entitled to annually, to execute developmental projects in their constituencies, to the Consolidated Fund of India for Covid-19 related spending.

The decision drew sharp criticism from Opposition parties because it meant that MPs would not be able to recommend any new MPLADS projects for two years. A total of ₹7,900 crore of MPLADS money is to be transferred to the Consolidated Fund of India to augment resources for Covid-19 management.

Each MP is entitled to ₹5 crore annually to spend on projects for community use in his or her constituencies, and if a politician were to decide, elsewhere in the State from which he or she was elected. The unspent amount is kept in a non-lapsable account with the district authority in the constituency for use in subsequent years. Most MPs use the funds received under the scheme to recommend projects for implementation that demonstrate their commitment to the welfare of the constituents.

The suspension of the scheme surprised MPs and political parties, as it reversed decisions announced through circulars on March 24 and 28. The March 24 circular issued by the Ministry of Statistics and Programme Implementation (Mospi) allowed MPs to use their entitlement for 2020-21 to purchase a range of items, from infra-red thermometers, face masks and gloves to personal protection equipment kits and ventilators for use in government hospitals and dispensaries.

The March 28 circular stated that MPs may contribute a part of their entitlement for 2020-21 to Covid-19 specific funds of the Centre or head of account decided by the Centre and use the balance for activities in their constituencies.

Too much centralisation

The Congress was critical of the government’s decision though some in the party welcomed it. Among the most vociferous critics was three-time Thiruvanathapuram MP Shashi Tharoor who tweeted that pooling the MPLADS funds into a Consolidated Fund run by the Central government is problematic. “An order to earmark all MPLAD spending for Covid19 related measures would have been OK…MPLADS preserved the sense of direct responsibility for the well-being of constituents that is a hallmark of an Indian MP’s work,” he said in a series of tweets.

Kerala Chief Minister Pinarayi Vijayan tweeted that the move to suspend the fund was anti-federal. “States are entitled to MPLADS funds, and the decision to centralise these funds will immensely weaken the efforts of state governments against Covid19. Decentralised interventions are most effective when it comes to tackling disasters or epidemics. The assistance provided by the Centre to states for Covid19 efforts are unequal and discriminatory in nature,” he wrote in a series of tweets.

Communist Party of India (Marxist) General Secretary Sitharam Yechury tweeted that there was enough evidence that Covid19 is best fought at the State and local level. “By suspending MPLADS, the government is taking away expenditure which would have attended to unique requirements of an area. This centralisation goes against federalism, development, will weaken our fight,” he tweeted.

First time MP, Mahua Moitra of All India Trinamool Congress, too was critical of the suspension. She described the move as “yet another ploy to centralise power” in her tweet, adding that the funds are used directly to serve each area.

Significantly, on March 28, the day the government had initially allowed MPs to contribute to Covid-19 related funds, BJP party president JP Nadda had tweeted: “All MPs of BJP will release Rs 1 crore from their MPLAD funds to the central relief fund to fight against Covid-19.”

How MPLADS works

The MPLADS money is like a special allowance that every MP gets to commission developmental projects for community use. These are usually small projects that are ignored when large programmes and schemes of the Centre and States are implemented. The projects that can be taken usually involve the creation of locally needed durable community assets such as projects for supply of drinking water, primary education, public health, sanitation, roads, bridges and railways, non-conventional energy and cluster development for handloom workers.

Significantly, though MPs have the prerogative to recommend a project, it is the district authorities that have the privilege to sanction, reject and implement those proposals. The district authorities are functionaries of a State government. Effectively, the implementation of such projects benefits States and that explains the Kerala Chief Minister’s disappointment.

Often, the implementation of projects recommended and sanctioned in one financial year tends to spill over into the next and the money allocated for an unfinished project reflects in the unspent balance with the district authority. As funds are usually released in two instalments every year by the Union government into the account of nodal district authorities, the system shows funds in the pipeline for ongoing works as unspent balance. Thus, as of March 4, 2020, there was ₹5,275 crore of unspent balance of MPLADS money with district authorities, the Ministry of Statistics and Programme Implementation said in reply to a question in Parliament.

What MPs can do for two years

The MPs who have already exhausted their annual entitlements of the past year cannot recommend any new projects. Where a recommended project has been sanctioned and implementation has begun, it will need to be completed with the funds available in the accounts of the district authorities. If available funds are too little, and the project was to be completed with the entitlements of 2020-21, that project might have to be scrapped or put on hold, thus annoying a section of the constituents.

If projects recommended are yet to be sanctioned or implementation contracts are yet to be awarded, the MP can reconsider the project and spend the money to complete some of the ongoing projects. Where an MP wants to use some of the funds already transferred to district authorities to purchase items required for Covid-19 management such as personal protection equipment, ventilators and masks, he or she might need to cancel some of their projects recommended earlier and to channel money for this purpose. The Lok Sabha MPs are likely to be hurt more by the Centre’s decision to suspend MPLADs as many would not have much unspent funds.

Published on April 13, 2020

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