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Insights into Editorial: MPLADS, its suspension, and why it must go






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.

All Opposition parties have been unanimous in their criticism of the government’s recent move to suspend the Members of Parliament Local Area Development Scheme (MPLADS) for two years, approved by the Cabinet.

Such political unanimity is not very common but does happen whenever self-interest is involved.

It must be said upfront that notwithstanding the fact that unilateral decision-making is inappropriate in a democracy, the decision to suspend MPLADS for two years is a good first step.


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 does the scheme work?

  1. 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.
  2. For the MPLAD Scheme, the guidelines focus on the creation of durable community assets like roads, school buildings etc.
  3. 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.
  4. 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.
  5. 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.


Following reasons for MPLADs scheme should be abolished:

  1. First, the scheme violates one of the cardinal principles, which though not specifically written down in the Constitution, actually permeates the entire Constitution: separation of powers.
    1. The argument that MPs only recommend projects, but the final choice and implementation rests with the district authorities is strange;
    2. There are hardly any authorities in the district who have the courage or the gumption to defy the wishes of an MP.
  2. CAG’s observations: Second, implementation of the scheme has always left much to be desired.
    1. The details below, which are some of the observations made by the Comptroller and Auditor General (CAG) of India, in a report make it clear: Expenditure incurred by the executing agencies being less than amount booked.
    2. Utilisation of funds between 49 to 90% of the booked amount;
  3. 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;
    1. Wide variations in quantities executed against the quantities specified in the BOQ (Bills of Quantity) in 137 of the 707 works test-checked. Variations ranged from 16 to 2312%.
  4. Use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works; “no accountability for the expenditure in terms of the quality and quantities executed against specifications”;
    1. Delays in issuing work orders ranging 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;
  5. Extensions of time granted to contractors without following the correct procedure;
  6. Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified;


Examples: Cases of misuse:

Reports of underutilisation and misutilisation of MPLADS funds continue to surface at regular intervals but there seems to have been no serious attempt to do anything about it till now.

There are innumerable instances of misuse of these funds; one prominent example is the construction of a fountain in the open space of an unauthorised settlement, or a jhuggi jhopdi colony, which did not have provision of drinking water.

The general belief in the settlement was that the contractor who bagged the contract to build the fountain was related to the local Member of Parliament.


Gaps in utilisation of MPLAD Funds:

  1. There are wide variations in the utilisation of the MPLAD amount in various constituencies.
  2. A report published in IndiaSpend has some very interesting insights based on data made available to it by the Ministry of Statistics and Programme Implementation.
  3. 508 MPs (93.55%) did not, or could not, utilise the entire MPLADS amount from May 4, 2014 till December 10, 2018, in 4 years and 7 months.
  4. Only 35 MPs of the Lok Sabha utilised the entire amount of MPLADS during this period;
  5. Though ₹1,757 crore had been released for MPLADs, only ₹281 crore had been utilised by all the 543 MPs till May 15, 2015.
  6. This means only 16% of the money had been spent in one year by all the MPs put together, because the Lok Sabha was constituted in May 2014; Since the MPLADS began in 1993, ₹5,000 crore was lying unspent with various district authorities by May 15, 2015.
  7. It is clear from the details above, as well as later experience, that most MPs use money under MPLADS quite haphazardly, and a significant portion of it is left unspent.
  8. Finally, we come back to the legality or constitutionality issue which was mentioned earlier.
  9. The constitutional validity of MPLADS was challenged in the Supreme Court of India in 1999, followed by petitions in 2000, 2003, 2004, and 2005.
  10. The possibility that implementation of a lot of schemes bears no relationship to how the schemes were intended to be implemented, seems to have completely escaped the attention of the Court.
  11. Common experience does not support this because of large, yawning gaps being found in actual implementation.



The implementation of the scheme was marked by various shortcomings and lapses.

These were indicative of the failure of internal control mechanisms in the department in terms of non-maintenance of records.

Therefore, the need of the hour is to plug the loopholes in the scheme and rechristened it to serve the developmental goals envisaged by the scheme.

The two-year suspension has given the government an opportunity to work in the direction of making the scheme more people’s friendly.