Rs. 1750 crores of MPLADS funds unutilized as of December 2020
Sai Krishna Muthyanolla
March 22, 2021
In view of the COVID-19 pandemic, the government had decided to halt the release of MPLADS funds for two years with these funds diverted for COVID-19 relief efforts. However, data provided by the government indicates that more than Rs. 1750 crores MPLADS funds lie unutilized with district authorities as of December 2020. Here is a detailed review.
The Member of Parliament Local Area Development Scheme (MPLADS) was introduced to provide funds to individual MPs to develop their own constituency based on local needs and requirements. Over the years, there are have been apprehensions regarding the underutilization of the allocated funds under this scheme. The Comptroller & Auditor General’s (CAG) report in 2011, makes important observations on the underutilization and discrepancies in the utilization of MP LADS funds.
In an earlier story, we have analyzed the available data about MPLADS and observed the trends in utilization of the funds. This data further corroborates the earlier observations of CAG and the claims by different sections regarding the under-utilization of the funds.
Recently, on 17 March 2021, responding to a question in Lok Sabha, the government provided the details of MPLADS funds available across the various Nodal districts (418 for Lok Sabha MPs & 176 for Rajya Sabha MPs).
A Lok Sabha MP can choose a Nodal District within the constituency while a Rajya Sabha member has the option to choose a district from the State he/she is nominated from.  As per the guidelines, the funds left unspent by an MP at the end of term are given to the successor MPs i.e the funds do not lapse and are carried forward.
Nodal Districts from 5 states account for 50% of the available funds for Lok Sabha MPs
As per the information provided in the Lok Sabha, as of November-December’2020, a total of Rs. 1.32 thousand crores of MPLADS funds of Lok Sabha MPs are available across 418 Nodal Districts. These Districts are spread across the 31 States/UTs in the country.
Among the funds available, the highest is among the districts belonging to Uttar Pradesh with Rs. 182.64 crores. It is understandable as the state has the most number of Lok Sabha MPs and 69 nodal districts are covered in the state.
It is followed by Karnataka with Rs.142.75 crores across the 25 nodal districts in the state. It is followed by Rajasthan, Maharashtra, and Andhra Pradesh respectively. Each of these states has more than Rs.100 crores of available funds across the nodal districts. The total amount of funds currently available for the nodal districts in these 5 states makes up for half of the total MPLAD funds available across all the districts of the country for Lok Sabha MPs.
Karnataka, U.P & West Bengal have the highest available MPLADS funds of Rajya Sabha MPs
A total of 176 Nodal districts have been identified by Rajya Sabha MPs for developmental works using MPLADS funds. As per the information shared by the government in the Lok Sabha, a total of Rs. 422.66 crores MPLADS funds are available as of November-December 2020.
The highest among these are in the state of Uttar Pradesh with 28 districts, followed by Bihar with 16 districts. However, the highest MPLADS funds available is with the districts in Karnataka with Rs. 47.15 crores across 4 districts. It is largely due to the Rs. 43.85 crores of Rajya Sabha MPLADS funds are available with Bengaluru Urban nodal district. Overall, the funds available in the districts of Karnataka are around 11% of the total Rajya Sabha MPLADS funds.
Similarly, West Bengal has the third-highest available funds for Rajya Sabha MPs despite only three districts being identified as Nodal Districts for Rajya Sabha MPLADS. This is largely due to Rs. 40.48 crores available with Kolkata District. Out of the 27 states, 14 states have more than Rs. 10 crores each available.
11 Nodal districts each have more than Rs.10 crores available from Lok Sabha MPLADS
Two of the 418 nodal districts account for 6.5% of the total unutilized available funds under Lok Sabha MPLADS. Chamrajnagar District in Karnataka has Rs. 47.63 crores available as of November-December’2020. It is followed by Balarampur in Uttar Pradesh which has Rs. 38.39 crores of unutilized Lok Sabha MPLADS funds.
Apart from these two districts, another 9 districts have available funds between Rs. 10 crores & Rs. 30 crores. Andhra Pradesh has 4 out of these 11 districts with available funds over Rs. 10 crores each.
A further 64 districts have available funds ranging between Rs. 5 crores and Rs. 10 crores. Meanwhile, a majority of the Nodal districts i.e  261 districts have available funds ranging between Rs. 1 crore – Rs. 5 crores.  Two districts – Lakshadweep and Ashok Nagar (Madhya Pradesh) have no funds that are currently available.
Around 100 Nodal districts each have more than Rs. 1 crore Rajya Sabha MPLADS Funds
As highlighted earlier in this story, the nodal districts of Bengaluru Urban and Kolkata have funds available in excess of Rs. 40 crores each, thereby contributing towards higher availability of Rajya Sabha MPLADS funds in respective states.
As per the latest information provided in the Lok Sabha, Bengaluru Urban district has Rs. 43.85 crores available from Rajya Sabha MPLADS funds. Kolkata is the only other nodal district with more than Rs.40 crores available.  Another 5 districts have funds available between Rs. 10 crores & Rs. 30 crores each. Among the 176 districts that have Rajya Sabha MPLADS funds available, the major portion of them i.e 83 districts have unutilized funds in the range of Rs.1 crore – Rs. 5 crores each.
In view of hold on MPLADS funds, opportunity to utilize the available funds
Last year, the Union Government took a decision to hold the funding for MPLADS for a period of two years (financial years 2020-21 and 2021-22). As per the government, this decision was taken in view of the COVID-19 pandemic. The funds which are ear-marked for MPLADS would be at the disposal of the Ministry of Finance, to be utilized towards COVID-19 relief efforts.
As per this, MPs would not be able to get new funds for two years and also would not be able to get unreleased installments of previous years pending as of 31 March 2020.  However, any of the works that are already sanctioned can be completed using the funds which are available with the district level nodal authorities. The MPs also have an option of changing the priority of the sanctioned works.
As noted earlier, the total value of Lok Sabha MPLADS funds available is Rs. 1.32 thousand crores and those with Rajya Sabha MPLADS are to the tune of Rs. 422.63 crores. Since the COVID-19 pandemic has affected many sectors, MPs could utilize available funds could be for relief & other efforts as permissible.
Furthermore, since no new funds would be allocated for two years, this time period could be utilized to complete all pending works and utilize the available amount. This could clear the backlog and pave the way for the formulation of a more robust and accountable mechanism of the utilization of MPLADS funds. The government has also initiated a 3rd party evaluation of the MPLADS, the report of which would be available in a few months.
Featured Image: Unutilized MPLADS funds