Data: As New MPLADS Guidelines Come into Force, Unspent Funds Still a Concern

Bharath Kancharla

GoI claims that the revised guidelines aim to broaden the scope of the scheme to enable the MPs to recommend the development works as per the changing needs of the community while also bringing in accountability & transparency. Data shows that unspent funds are a concern.

MPLADS (Member of Parliament Local Area Development Scheme) is a Central Sector scheme that enables Members of Parliament (MPs) to recommend works of a development nature with an emphasis on creating durable community assets based on local needs. Recently, the Government of India released revised guidelines for the MPLADS which are applicable from 01 April 2023. Since their first introduction in 1993, there have been multiple revisions to the guidelines in subsequent years. The most recent revision prior to the current revised guidelines was in June 2016.

The revised guidelines also come in the wake of disruption to the MPLADS in recent years due to the COVID-19 pandemic. The scheme was suspended for the period from April 2020 to November 2021. No funds were allocated for the scheme in 2020-21. For the remainder of the period in 2021-22 (i.e., November 2021 to March 2022) Rs. 2 crores were allocated under this scheme to each MP.

Over the many years, there have been discussions on the continuation of the scheme, in light of under-utilization and mis-utilization of the allocated funds. Our earlier analysis on MPLADS can be read here and here. In this context, the new revised guidelines for MPLADS are expected to overcome a few of the challenges identified in the implementation of the scheme over the past 30 years.

Entire process of fund-flow to be operated through a web-portal, to facilitate real time monitoring

The government of India claims that the revised guidelines aim to broaden the scope of the scheme to enable the MPs to recommend the development works as per the changing needs of the community, with an emphasis on improving the functioning, implementation, and monitoring of the MPLAD scheme. Few of the changes to these guidelines are aimed to meet these objectives.

Each MP is entitled to Rs. 5 crores annually under MPLADS. This would be released in two equal installments of Rs. 2.5 crores each, by the Government of India, directly to the District Authority of the Nodal District of the concerned MP.
MPs are required to recommend every year, works costing at least 15% of the total MPLADS entitlement for the year for areas inhabited by the SC population and at least 7.5% of the total entitlement for the year for areas inhabited by the ST population. The implementing district authorities are required to furnish the details on a quarterly basis to the State Nodal Authority.
A sum of Rs. 50 lakhs can be used for building assets by trusts and societies as per the scheme guidelines.
MPLADS can be converged in individual/stand-alone projects of other Central and State government schemes provided such schemes are eligible under MPLADS. In such pooling, the funds from other scheme sources should be used first and the MPLADS funds to be released later.
The new guidelines provide an indicative list of works permissible under MPLADS under 12 broad areas.
All recommended eligible works should be sanctioned within 75 days from the date of receipt of the recommendation, after completing all formalities. The District Authority shall, however, inform MPs regarding rejection, if any, within 45 days from the date of receipt of recommendations, with reasons. As soon as work under the Scheme is completed, it should be put to public use.
While the renovation of old buildings built under the scheme had been banned earlier, the new guidelines allow repairs costing up to Rs. 50 lakhs.
A penal clause for material breach of MPLADS Guidelines has been introduced for the first time.
MPLADS funds can be given for the construction of government buildings and up to ₹1 crore can be contributed for natural disaster works. MPs have been allowed to contribute up to ₹ 25 lakhs outside the constituency.

Furthermore, the Ministry of Statistics and Programme Implementation (MoSPI) in collaboration with the State Bank of India, has launched a web portal for implementing revised fund flow procedures. The portal aims at facilitating real-time monitoring, increasing transparency, accountability, and scope of permissible works under the central sector scheme.

64% of the Works sanctioned by District Authorities are in progress

As of 04 May 2023, nearly 1.2 lakh works were recommended by the MPs of the 17^th Lok Sabha across all the States and UTs. This data is collated from the collection of Datasets on MPLADS available on Dataful, which is sourced from the data available on the MPLADS website.

Out of these works recommended by the 17^th Lok Sabha MPs, 80% of them i.e., around 95.5 thousand works were sanctioned by District authority. Out of these, around 64% i.e., more than 60.8 thousand works are marked as work in progress. The greatest number of works are recommended in Uttar Pradesh, which has 80 Lok Sabha MPs, the highest in the country. Out of the 15.7 thousand works recommended in the state, 14.2 thousand were sanctioned by District Authorities, and out of these, around 80% are in work-in-progress. Gujarat, Odisha, MP, and Maharashtra are the other states with a higher number of works recommended by the MPs. Gujarat has around 56% of its sanctioned works as works-in-progress, while Bihar has a higher percentage of 81% of the sanctioned works as in progress.

Rs. 1.9 thousand crores unspent balance with District Authorities from 17^th Lok Sabha MPLADS funds

Based on the recommendations from the MPs of the 17th Lok Sabha, Rs. 4.51 thousand crores were released by the Government of India as on 04 May 2023. Among the states, the highest is in Uttar Pradesh with Rs. 798 Crores. Maharashtra and West Bengal, which have the next highest number of MPs also received the next highest amount of funds with Rs. 360.5 crores and Rs. 339 crores respectively.

Out of the funds received, District Authorities in Uttar Pradesh spent Rs. 501.9 crores while funds worth Rs. 343.5 crores remain as unspent balance with the district authorities in the state. It ought to be noted that the funds available with the district authorities also include funds transferred from the former MPs which remained unspent. The next greatest expenditure is from the state of Maharashtra followed by Bihar with Rs. 213.4 crores and Rs.202.5 crores respectively. Maharashtra, West Bengal, Bihar, Andhra Pradesh, and Tamil Nadu, each have more than Rs. 100 crores each of unspent balances with District Authorities.

Rs. 971.5 crores unspent balance relating to Sitting Rajya Sabha MPs

A total of Rs. 2.8 thousand crores of expenditure were incurred by all the current MPs of Rajya Sabha. A further Rs. 971.5 crores remain unspent with the district authorities as on 04 May 2023. As was the case with Lok Sabha MPs, Uttar Pradesh received the highest amount of funds released by the Government of India with Rs. 719 crores.

Kerala which has 9 sitting MPs in Rajya Sabha received the next highest amount of funds with Rs. 217.5 crores. The actual expenditure incurred by current Rajya Sabha MPs under MPLADS is Rs. 186.5 crores, which is only next to Uttar Pradesh. Assam, another state with comparatively fewer Rajya Sabha MPs has the next highest expenditure with Rs. 156 crores. The timeline of the election of MPs representing a particular state has a bearing on the tenure and funds spent by the current MPs in Rajya Sabha. Around Rs. 178 crores remain unspent by the Rajya Sabha MPs from Uttar Pradesh, followed by those from Maharashtra and Tamil Nadu.

With only less than a year left for the 17^th Lok Sabha to end, unspent balance remains a concern. The new guidelines are aimed at bringing more flexibility for the MPs to spend MPLADS funds on a wider range of development projects. While there are concerns about the more centralised nature of new regulations, this could help in bringing in more accountability and transparency in utilisation of the funds.