(Mis)using the MPLAD funds since 1993 - Analysis on MPLADS fund Utilization
Sai Krishna Muthyanolla
April 1, 2015
“Many of the systematic weaknesses affecting the implementation of the MPLAD had persisting since its inception 17 years ago. The lapses were brought to the notice of the ministry by the CAG in two earlier performance audit (1998 and 2001). Submission of Action Taken Notes on the report on 2001 after a lapse of 8 years (2009) speaks volumes about the monitoring methods” – CAG report in 2010-2011.
The MPLADS or the Member of Parliament Local Area Development Scheme was introduced in 1993 to enable MPs to create durable assets based on local requirements in their constituencies. This scheme is governed by the guidelines issued from time to time. The annual allotment to each MP was Rs 2 crore in 1998-99 and it was increased to Rs 5 crore per annum a few years ago.
In other words, the MPLADS was brought in to enable and empower the MPs to develop their own constituency based on the local need & requirement. However, the reality is different. Previous experience shows that MPLADS are underutilized and when they are utilized, they are often abused and mis-used. The CAG audit reports on the performance of MPLADS in 2001 & 2011 shed light on what is wrong with the scheme.
How is it implemented?
The Ministry of Statistics & Programme Implementation(MoSPI), Government of India is the nodal department responsible for policy formulation and release of funds under the scheme. The state nodal departments are responsible for the supervision and monitoring. The district authorities (DAs) are responsible for work scrutiny, cost estimation, identification of the implementing agency(IA) and transfer of funds. The scheme mandates that Panchayati Raj Institutions be preferred as the IA.
CAG Audit Report of 2001 – Major Findings
The scheme was first reviewed by the CAG in 1998 and then in 2001 & 2011. The major findings of the 2001 report are as follows:
Major Lapses in MPLADS as per the CAG Audit Report of 2010-11
The CAG report of 2010-11 identified major lapses in the scheme. Some of those lapses are explained in detail below.
1. Selection of Prohibited Works
As per the scheme guidelines from November 2005, all works which meet the local community, infrastructure & developmental needs are permissible except those prohibited under the guidelines. However, it is observed by the CAG that in 100 sampled districts in 29 States/UTs, an expenditure of Rs 73.76 crores was incurred in the period 2004-09 on 2340 works which were not permitted under the scheme guidelines.
The chart below shows the statewise expenditure on prohibited works of more than a crore rupees.
2. No Dates & Invalid Dates
The works were not documented as per the guidelines and in most cases either the dates were not entered or were completely invalid. Some of the dates entered were before January 1993 when the scheme did not even exist. The chart below shows the number of works where either dates were not entered or the dates entered were invalid.
3. Handing over of Assets & Assets not put to use
The scheme guidelines mandate that as soon as a work was completed, it should be transferred to the user agency and be put to public use. In the 7 States/UTs studied, out of the 15049 sample works created during 2004-09, handing over or taking over of assets was not on record for 14828 works. In other words, 98.53% of the works created had no record of handing over to the user agency. In six of the seven States/UTs, none of the works had any record of handing over or taking over.
4. Utilization of the Funds
The year wise position of utilization of total funds available during the year (sum of the opening balance, funds released during the year & interest accrued on unspent balance) suggests that the expenditure was even less than the opening balance & interest earned in each year. The CAG also pointed out that the release of funds was not regulated on the basis of fund availability with the DAs.
CAG Recommendations
Based on all the findings, the CAG came up with a set of recommendations that would ensure that the MPLADS would fulfill its intended objective. The important recommendations made are
What about the the current numbers?
As of Mar 2nd 2015, a total sum of Rs 1792.5 crores has been released for the year 2014-15. This includes funds released for both Rajya Sabha & Lok Sabha MPs. If the MP’s have been paying attention to the audit reports and its recommendations, may be these reports will look much better in the future.
Data Sources:
www.saiiindia.gov.in
http://mplads.nic.in/summhtml/s2014-2015_htm.htm