Context: The government’s recent move to suspend the Members of Parliament Local Area Development Scheme (MPLADS) for two years, has been criticized by all opposition parties unanimously. 

More on the news: 

  • The government’s reasoning to suspend these funds is to strengthen the government’s efforts in managing the challenges and adverse impact of COVID-19 in the country.
  • The non-operation of the MPLAD fund for two years will allow the government to channelize the earmarked corpus of ₹7,900 crore to the consolidated fund of India.
  • Under the scheme, each Member of Parliament has the choice to suggest to the District Collector for works to the tune of ₹5 crores per annum to be taken up in his/her constituency.

Concerns raised by opposition parties:

  • Will adversely impact grass-root level work: MPLAD is meant to execute development work in the constituency, suspending it is a huge disservice to the constituents and will undermine the role and functions of MP.
    • In the short run, during the times of COVID-19 pandemic, MPLADS funds could have been used for procurement of such supplies that will help in fighting against the disease.
  • Impact efforts at state and local level: As there is enough evidence that covid-19 is best fought at the state and local level, the step will take away expenditure to meet unique requirements of an area. 
  • Against federalism as the decision to suspend the scheme is taken unilaterally by the central government.
  • Against development: As the scheme attempts to address large variations in infrastructure across the states, the suspension will make it difficult to reduce inequality in development and(in the short run) will weaken our fight against covid-19. 

Despite above concerns, the decision will showcase a right signal and gesture of accountability as the government is readying to announce a financial stimulus to deal with the covid-19 pandemic.

Though unilateral decision-making is inappropriate in a democracy, the decision to suspend MPLADS for two years seems to be a step in the right direction.

Case in Favor of scrapping MPLADS

  1. Violates separation of powers: 
    1. Separation of powers though not specifically written down in the Constitution, actually permeates the entire Constitution. 
    2. This scheme gives an executive function to legislators: The argument that MPs only recommend projects, but the final choice and implementation rests with the district authorities is strange, as hardly any authorities in the district have courage to defy the wishes of an MP.

As the financial audit of MPLADS is done by the CAG and further examined by the Public Accounts Committee consisting of Members of Parliament, it adds another layer of conflict.

The NCRWC recommended immediate discontinuation of the MPLAD scheme on the grounds that it was inconsistent with the spirit of federalism and distribution of powers between the centre and the state.

The 2nd ARC’s report on Ethics in Governance took a firm stand against the scheme arguing that it seriously erodes the notion of separation of powers, as the legislator directly becomes the executive.  

  1. Improper implementation: The implementation of the scheme was marked by various shortcomings and lapses. According to the observations made by the Comptroller and Auditor General (CAG) of India, in a report: 
    1. Expenditure incurred by the executing agencies being less than the amount booked. For example, Utilisation of funds between 49 to 90% of the booked amount.
    2. Diversion from the objective: Though the scheme envisages that works under the scheme should be limited to asset creation, 78% of the works recommended were for improvement of existing assets. 
    3. Wide variations in quantities executed against the quantities specified in the BOQ (Bills of Quantity). 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.
    5. No accountability for the expenditure in terms of the quality and quantities executed against specifications. 
    6. 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).
    7. Extensions of time granted to contractors without following the correct procedure.
    8. Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified.
  2. Gaps in utilisation: There are wide variations in the utilisation of the MPLAD amount in various constituencies. According to a report published in IndiaSpend based on data made available to it by the Ministry of Statistics and Programme Implementation
    1. A year after they took office, 298 of 542 members of the 16th Lok Sabha have not spent a rupee from the ₹5 crore that is set aside annually for them to develop their constituencies.
    2. 93.55% did not or could not, utilise the entire MPLADS amount in close to 5 years of 16th Lok Sabha. Only 35 MPs of the Lok Sabha utilised the entire amount of MPLADS during this period.
    3. Since the MPLADS began in 1993, ₹5,000 crore was lying unspent with various district authorities by May 15, 2015.
    4. 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.
  3. MP-Contractor nexus: The money under MPLADS is alleged to be used to appease or oblige two sets of people: opinion-makers or opinion-influencers, and favourite contractors.  For example, a contractor often being a relative, close friend, or a confidant of the MP, and the contractor and the MP being financially linked with each other.
  4. Legality or Constitutional issue
    1. The constitutional validity of MPLADS was challenged in the Supreme Court of India in 1999 and later. 
    2. The combined judgment for all these petitions was delivered in 2010, with the scheme being held to be constitutional as the actual work is carried out by the Panchayats and Municipalities which belong to the executive organ.
    3. Concerns: The judgement seems to have placed an unquestioned trust in the efficacy of the scheme, ignoring the situation prevalent in the field, evidence of which is available in audit reports wherein gross irregularities and infirmities have been pointed out. 

Way Forward

Leveraging Technology

  • There is the need to explore the potential of technology to improve efficiency. For example, Geo tagging of works under MPLADS will help in monitoring the projects.

Ensuring Accountability

  • Public debates need to be encouraged on issues that impact the working of our legislatures.
  • They also need to hold them accountable for their work under MPLADs.

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. 

Members of Parliament Local Area Development Scheme

  1. The Members of Parliament Local Area Development Scheme (MPLADS) is an ongoing Central Sector Scheme which was launched in 1993-94.  
  2. The Scheme enables the Members of Parliament to recommend works for creation of durable community assets based on locally felt needs to be taken up in their constituencies in the area of national priorities namely drinking water, education, public health, sanitation, roads etc.
  3. The Ministry of Statistics and Programme Implementation has been responsible for the policy formulation, release of funds and prescribing monitoring mechanism for implementation of the Scheme.


  1. The MPLADS is a Plan Scheme fully funded by the Government of India. The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.
  2. MPs are to recommend every year, works costing at least 15 percent of the MPLADS entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by S.T. population.
  3. In order to encourage trusts and societies for the betterment of tribal people, a ceiling of Rs. 75 lakh is stipulated for building assets by trusts and societies subject to conditions prescribed in the scheme guidelines.
  4. Lok Sabha Members can recommend works within their Constituencies and Elected Members of Rajya Sabha can recommend works within the State of Election (with select exceptions). Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
  5. All works to meet locally felt infrastructure and development needs, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS as prescribed in the scheme guidelines. 
  6. Expenditure on specified items of non durable nature are also permitted as listed in the guidelines.


  1. A Member of Parliament shall give his/ her choice of Nodal District in a prescribed format to the Ministry of Statistics and Programme Implementation with copy to the State Government and to the District Magistrate of the chosen District.
  2. The annual entitlement of Rs 5 crore shall be released, in two equal instalments of Rs 2.5 crore each, by Government of India directly to the District Authority of the Nodal District of the Member of Parliament concerned.
  3. Each MP shall recommend eligible work on the MP’s letter head duly signed by the MP to the district authority.
  4. The District Authority shall identify the Implementing Agency capable of executing the eligible work qualitatively, timely and satisfactorily. It shall be responsible for timely and effective implementation of such works. 
  5. All recommended eligible works should be sanctioned within 75 days from the date of receipt of the recommendation, after completing all formalities. 
  6. The District Authority shall, however, inform MPs regarding rejection, if any, within 45 days from the date of receipt of recommendations, with reasons thereof.
  7. MPLAD Scheme can be converged in individual/stand-alone projects of other Central and State Government schemes provided such works of Central/State Governments Schemes are eligible under MPLADS. 
  8. Funds from local bodies can similarly also be pooled with MPLADS works. Wherever such pooling is done, funds from other scheme sources should be used first and the MPLADS funds should be released later, so that MPLADS fund results in completion of the project.
  9. One MP - One Idea: Based on the innovative ideas received from the local people regarding developmental projects, a ‘One MP – One Idea’ Competition may be held in each Lok Sabha constituency annually to select the three best innovations for cash awards and certificate of appreciation for the next five best innovations.


Image Source: The Hindu