Editorial Notes

[Editorial Notes] MPLADS scheme and its loopholes

The MPLADS is a Central Sector Scheme which enables the MPs to recommend works for creation of durable community assets based on locally felt needs in their constituency. However, the scheme has attracted ire because of its haphazard implementation, unfair practices and under utilisation of allocated funds to the MPs.
By IASToppers
May 05, 2020


  • Introduction
  • MPLADS scheme
  • Reasons to abolish MPLADS
  • Gaps in actual implementation
  • Cases of Misuse
  • Conclusion

MPLADS scheme and its loopholes

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The Central government has recently suspended the Members of Parliament Local Area Development Scheme (MPLADS) for two years. The government’s reason is to use these funds “to strengthen the government’s efforts in managing the challenges and adverse impact of COVID-19 in the country”.

Members of Parliament Local Area Development Scheme:

  • The MPLADS is an on-going Central Sector Scheme which was launched in 1993-94.
  • The Scheme enables the Members of Parliament to recommend works for creation of durable community assets based on locally felt needs in their constituencies.
  • The assets can be created in the area of national priorities namely drinking water, education, public health, sanitation, roads etc.
  • The Ministry of Statistics and Programme Implementation is responsible for the policy formulation, release of funds and monitoring mechanism for implementation of the Scheme.
  • The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.
  • Under the scheme, each MP 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.
  • However, experts are in the opinion to abolish the MPLADS scheme forever for the following reasons.

Reasons to abolish MPLADS:

1. Violation of separation of powers:

  • The scheme violates one of the cardinal principles of the Constitution: separation of powers.
  • This scheme gives an executive function to legislators.
  • The argument is that MPs only recommend projects, but the final choice and implementation rests with the district authorities.
  • This argument is strange and holds almost no value as there are hardly any authorities in the district who have the courage to defy the wishes of an MP.

2. CAG’s observations:

  • The implementation of the scheme has never been satisfactory.
  •  The reports of CAG of India make it clear: Expenditure incurred by the executing agencies has been less than the amount booked.
  • Utilisation of funds is between 49 to 90% of the booked amount.
  • 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.
  • Use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works.
  • No accountability for the expenditure in terms of the quality and quantities executed against specifications.
  • 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.
  • Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified.
  • The implementation of the scheme was marked by various shortcomings and lapses.
  • These were indicative of the failure of internal control mechanisms in the department in terms of non-maintenance of records.

3. Gaps in utilisation:

  • There are wide variations in the utilisation of the MPLAD amount in various constituencies.
  • A report published in IndiaSpend shows that: A year after MPs took office, 298 of 542 members of the 16th Lok Sabha — India’s lower house of parliament — have not spent a rupee from the ₹5 crore that is set aside annually for them to develop their constituencies.
  • 508 MPs (93.55%) did not, or could not utilise the entire MPLADS amount from May 4, 2014 till December 10, 2018, in 4 years and 7 months.
  • Though ₹1,757 crore had been released for MPLADs, only ₹281 crore had been utilised by all the 543 MPs till May 15, 2015.
  • This means only 16% of the money had been spent in one year by all the MPs put together.
  • It is clear from the details above that most MPs use money under MPLADS quite haphazardly, and a significant portion of it is left unspent.

4. Unfair practices and Favouritism:

  • Added to the data above MPLADS is being used to appease or oblige two sets of people: opinion-makers or opinion-influencers, and favourite contractors.
  • An often-heard tale is that of the contractor being a relative, close friend, or a confidant of the MP, and the contractor and the MP being financially linked with each other.

Gaps in actual implementation:

  • The constitutional validity of MPLADS was challenged in the Supreme Court of India in 1999, followed by petitions in 2000, 2003, 2004, and 2005.
  • The combined judgment for all these petitions was delivered on May 6, 2010, with the scheme being held to be constitutional.
  • The Court seems to have placed an unquestioned trust in the implementation of MPLADS scheme without an assessment of the situation prevalent in the field, evidence of which is available in audit reports wherein gross irregularities and infirmities in implementation have been pointed out.
  • The possibility that implementation of a lot of schemes bears no relationship to how the schemes were intended to be implemented, seems to have completely escaped the attention of the Court.
  • Common experience does not support this because of large gaps being found in actual implementation.

Cases of Misuse:

  • Reports of underutilisation and misutilisation of MPLADS funds continue to surface at regular intervals but there seems to have been no serious attempt to do anything about it till now.
  • There are innumerable instances of misuse of these funds; one prominent example is the construction of a fountain in the open space of an unauthorised settlement, or a jhuggi jhopri colony, which did not have provision of drinking water.


The scheme has not been able to deliver the services it was meant to and further is short in fixing the accountability of the stakeholders involved. Therefore the order to convert the two-year suspension into the complete abolition of the scheme can be worked upon with the consensus of legislators.

Mains 2020 Editorial Notes

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