Most works under MPLADS are recommended during last year of a Lok Sabha tenure
Sai Krishna Muthyanolla
August 7, 2020
Among the many austerity measures taken by the government to battle COVID-19, suspension of the MPLADS for a period of two years is one. Review of the MPLADS data for the last few Lok Sabha tenures indicates that most of the works under MPLADS are recommended during the last year of a Lok Sabha tenure.
On 06 April 2020, the Union Cabinet took a decision to keep on hold the operation of MPLADS (Members of Parliament Local Area Development Scheme) for the next two years i.e. 2020-21 & 2020-21. This decision was taken in view of the COVID-19 situation in the country, where-in the funds earmarked for MPLADS, will be now at the disposal of Ministry of Finance and can be made available for COVID-19 related containment and relief efforts.
This decision would effectively result in the following.
The opinion is divided on this decision of the government. Members from the opposition parties have said that it is a unliteral decision by government and such centralization can be detrimental to parliamentary democracy. There is also an opinion that earlier track record of Central Government, the delays in devolution funds, could hamper targeted local level works which MPLADS used to take care off. Meanwhile, there is also an argument that suspension of MPLADS could be a step in the right direction.
However, what does the available data and information about MPLADS say about this scheme? We took a look at the numbers relating to the scheme and observations made about the implementation & workings of MPLADS.
86% of released funds unspent during the first year of 17th Lok Sabha
Each MP is entitled to ₹ 5 Crores per year as part of MPLADS. As against this entitlement of ₹ 5 crores, only ₹2.5 crores were released to the MPs (with exception of few MPs) during the first year of the constitution of 17 Lok Sabha i.e. 2019-20. This is because the annual entitlement of ₹ 5 crores is released, in two equal instalments of Rs 2.5 crore each, subject to certain conditions as listed in the guidelines of this scheme. This means that many of the MPs did not spend enough to become eligible for the release of the second instalment.
This released amount is a total of ₹ 1512.5 for 2019-20. Coupled with interest, the total amount available with District Authorities is ₹ 1,526.24 crores for 2019-20. Out of the released amount, the cumulative amount that was recommended by the MPs for various works amounted to ₹ 691.25 crores, of which the District Authorities have sanctioned ₹ 469.87 crores. A total of ₹ 207.54 crores were spent so far on various works, which is only around 14% of the total amount that is released to the MPs in 2019-20. Even in terms of the sanctioned amount, the utilization so far is less than half.
Nearly 2000 crores of unspent amount from the past three Lok Sabhas, with another 1600  crores unspent by Rajya Sabha members.
In the 14th Lok Sabha, Government of India has released a total of ₹ 14.02 thousand crores, which totalled to ₹14.47 thousand crores with interest added. Of the total ₹15.7 thousand crores worth of works recommended by the MPs; the respective district authorities have sanctioned ₹ 14.35 thousand crores for carrying out various works, of which ₹ 14.32 thousand crores were utilized.  ₹151.13 crores of available funds available to the MPs of 14 Lok Sabha remains unutilized.
In the 15th Lok Sabha, a total of ₹10.26 thousand crores was released to MPs under MPLADS, which accumulated to ₹ 10.9 thousand crores along with Interest. MPs of 15 Lok Sabha have recommended works worth ₹ 12.22 thousand crores, of which the District authorities have sanctioned works worth ₹ 10.47 thousand crores. A total of ₹ 10.43 crores were spent by the district authorities for various works. However, around ₹ 463 crores available for MPs of 15Lok Sabha remains unspent.
₹12.36 thousand crores were released to the MPs of 16th Lok Sabha under MPLADS by Government of India (GoI) which accumulated to ₹13.33 thousand crores along with interest. The MPs have recommended works worth ₹15.53 thousand crores, but only ₹ 13.47 thousand crores were sanctioned. A total of ₹ 1.38 thousand crores remain unspent with ₹11.96 thousand crores utilized by the district authorities for various works.
A total of ₹ 1.99 thousand crores i.e. 5.4% of the total amount released by GoI under MPLADS over the past three Lok Sabhas remain unspent, with a major portion of it belonging to the 16 Lok Sabha.
Nearly ₹ 1.66 thousand crores out of ₹ 15.93 thousand crores released to Rajya Sabha MPs remains unspent. Of this, ₹ 540 crores are unspent by the Sitting Rajya Sabha MPs and ₹ 1.12 thousand crores released to ex-Rajya Sabha MPs is unutilized.
Around 31% of the works recommended in 16th Lok Sabha remain unfinished
During the 16th Lok Sabha, around 3.72 lakh works were recommended by MPs of which nearly 2.57 lakh works were completed over the five years. Nearly 31% of the recommended works remain unfinished.
Highest number of works in a year were recommended during the last year of Lok Sabha tenure with more than 87.7 thousand works. There is a year on year increase in the number of works recommended during the tenure of the 16 Lok Sabha, with around 54 thousand works being recommended during the first year i.e. 2014-15.
Out of all the works recommended by Lok Sabha MPs during 2014-19, around 86% have been sanctioned by the district authorities. The highest number of works completed were for the third year of the tenure i.e. 2016-17 with 58.9 thousand works completed. However, large number of works that are more recent i.e. recommended during the last two years of tenure, remain unfinished with only around 54 thousand and 43 thousand completed respectively.
Major portion of utilization of Funds is during last years of Lok Sabha Tenure
As the data indicates, majority of the pending works belong to the last two years of the Lok Sabha tenure. The pendency is not just due to the fact that they were recently recommended, but also because of the substantial increase in the number of works recommended by the MPs during the last years of the Lok Sabha tenure. The data from 16 Lok Sabha, indicates that during the initial years, the value of projects recommended and expenditure on the projects is relatively less than the amount made available. This is covered up in the subsequent years.
Apart from 16 Lok Sabha, the CAG’s 2011 Report on MPLADS, also makes a similar observation for the period 2004-2009.
The expenditure was highest during 2004-05 and 2008-09. CAG observes that : ‘The two peaks in the expenditure incurred in 2004-05 and 2008-09, were coterminous with the beginning and close of the 14th Lok Sabha and the pre-election years of the 15th Lok Sabha respectively’.
This clearly indicates that the there is an increase in the expenditure of MPLADS funds as the tenure of the Lok Sabha draws to a close and when the MPs get ready to face the next election.
Discipline in planning and execution needed to ensure the purpose of MPLADS is met
MPLADS was introduced in 1993, to provide MPs with a mechanism to take up works that are developmental in nature and to create durable community assets. Taking up local development works without the need to wait for Central or State Level budgetary grants was the key idea behind this scheme.
Accordingly, the allocation was increased from ₹ 5 lakhs per year to ₹ 5 crores over a period of time. As per the data in the latest published annual report of 2016-17, the percentage of utilization of the funds ranged around 88-92% over a period of ten years, while the completion of works was on average around 90%.
However, as observed earlier, most of the work happens during the last years of a Lok Sabha tenure. A more planned approach could help in ensuring that the projects are initiated earlier and completed on time, rather than remaining pending at the end of a tenure.
Apart from this CAG has also observed discrepancies in the implementation of the scheme. Few of the major lapses observed by CAG in its 2010-11 report includes:
CAG has also highlighted issues with the utilization of the funds, as discussed in this story.
Apart from these, there are also allegations of misappropriation of funds under the scheme. Recently, in 2019, there were allegations about a Union Minister, where in CAG highlighted a fraudulent and irregular payment of ₹ 5.93 crores without a tender to a cooperative society from the MPLADS funds.
Factly has earlier written as story on the utilization of the funds over the years along with the observations and recommendations of CAG in 2011. The key recommendations were around brining in transparency and accountability in the execution of the works under MPLADS.
With the two-year suspension of MPLADS, it is a good opportunity to complete the pending works and utilize the unspent amount. It is also a good time to review the implementation of the MPLADS scheme, before charting the further course of the scheme.