Governance Now, April 1-15, 2011
MPs are supposed to make laws and policies, not run development schemes as a 150 percent hike in their fund would suggest
* Utilisation of MPLADS fund ranged from 37 percent to 52 percent during the last five years (2004-2009)
* 23 states/UTs had not inspected any work under the scheme during the last five years (2004-2009)
* 90 percent of district authorities did not maintain assets/works register
* 12 district authorities in six states showed advance released as ‘utilised’ in ‘utilisation certificate’, thus inflating expenditure figure
* 57 percent of completed works were not uploaded on the website of MPLADS
* Expenditure peaked during election time
These are some of the key findings of the Comptroller and Auditor General of India (CAG) report on the performance of the Member of Parliament Local Area Development Scheme (MPLADS) for the five years between 2004-05 and 2008-09.
The report was released on March 18, 2011 – barely a week after finance minister Pranab Mukherjee announced a hike in the fund for each MP from Rs 2 crore to Rs 5 crore while winding up his reply on the budget in Lok Sabha. Of course he knew about the CAG’s stinging comments, for, he had hastened to add: “I have to add here that the CAG report has just been received and will be laid on the table of
house shortly. Concerns expressed therein will be addressed while formulating the guidelines for enhanced allocation.”
Quite apparently, the intention was to assert that everything was fine with the scheme except for some delivery-related issues which would be sorted out by suitably changing the “guidelines”. We will see how this is not quite so.
For one, Mukherjee probably didn’t read the CAG report carefully. The report strikes at the very roots of the scheme, it’s very raison d’être, which is “to enable MPs to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs”. The operating word here is “locally felt needs”.
Page 9 of the CAG report says: “Audit observed that the design of the scheme did not specify the mechanism to be adopted by an MP to ensure participation of the various constituents, such as active forums of residents, local bodies, NGOs etc in an MP’s constituency in determining and recommending works responsive to locally felt needs. There was no record to indicate that local requirements were considered by systematically with relative importance being explored and weighed properly. The process of selection of works lacked transparency and objectivity to that extent.”
There can’t be anything more damning. Eighteen years after the scheme came into existence the CAG says there is “no mechanism” in it to ascertain “locally felt needs”. CAG goes on to add that “in view of the fact that the absence of a monitorable and participatory mechanism to prioritize needs of the MP’s constituency
opened the scope of utilization of MPLADS on non-priority areas”. Various other government reports have shown how MPs simply go by their whims.
Not Their Job
When the scheme was launched in December 1993 by the P V Narasimha Rao government, it was aimed at enabling the MPs to “attend to small (developmental) things that remain unattended in their constituencies”, says Ram Naik, veteran BJP leader from Maharashtra who initiated the move after having successfully piloted
a similar scheme in his state in 1983.
This was later codified to primarily mean building durable community assets like drinking water, primary education, public health, sanitation and roads. Initially, Rs 1 crore was allotted for this, which was raised to Rs 2 crore later.
Right from the beginning, the scheme leader Somnath Chatterjee stood up in parliament at the time to say: “On principle, we are not accepting this proposal. This will mean only disturbing the priority which is decided by the district planning body.” He pointed out this was meant to sabotage local self-government bodies like the panchayats which had been empowered through the 73rd constitutional amendment passed earlier the same year. Empowerment of the municipalities followed next year by way of the 74th constitutional amendment. It may also be noted that that was the time of dismantling the licence-permit raj by the Narasimha Rao government. This meant a dent in the patronage peddling business of the MPs, which the MPLADS partially restored.
All the government’s expert panels that examined the scheme subsequently said it should be scrapped. Their basic objection was that the MPs were meant to formulate laws and policies, not run the development schemes, which, in turn, was the job of the executive. In 2002, the National Commission to Review the Working of Constitution (NCWRC) sought “immediate discontinuance of the MPLAD Scheme”, saying it was “inconsistent with the spirit of the Constitution in many ways”. In 2005, the National Advisory Council (NAC) said “dispense with it” and give the funds “directly to the panchayats and municipalities”.
The Second Administrative Reforms Commission (ARC) headed by the present law minister, M Veerappa Moily, said in 2007 in the “ethics in governance” chapter that “schemes such as MPLADS and MLALADS should be abolished”.
For years, the government ignored such remarks, pointing out that the constitutionality of the scheme was being examined by the supreme court. Then, on May 6, 2010, a five-member constitutional bench of the apex court, headed by the tehn CJI KG Balakrishnan, held it to be constitutionally valid. It said, among other
things, that:
(i) “Indian Constitution does not recognise strict separation of powers. The constitutional principle of separation of powers will only be violated if an essential function of one branch is taken over by another branch, leading to a removal of checks and balances” and,
(ii) “Even though MPs have been given a seemingly executive function, their role is limited to ‘recommending’ works and actual implementation is done by the local authorities. There is no removal of checks and balances since these are duly provided and have to be strictly adhered to by the guidelines of the Scheme and the Parliament. Therefore, the Scheme does not violate separation of powers.”
An emboldened government immediately sought a hike in the funds by Rs 3 crore, which the MPs, the only supporters of the scheme, had been demanding since 2006 in view of “inflation”. The planning commission refused it, saying there was no fund in the current five-year plan that runs till 2012. Mukherjee didn’t bother and announced the hike.
Systemic Shortcomings
True, there exists elaborate “Guidelines” - issued in 1994, 1997, 1999, 2002 and 2005 - to ensure transparency and accountability. But the CAG report says the scheme continues to be plagued by various shortcomings like diversion and misuse of funds, extremely poor monitoring, transparency and accountability etc.
Despite such pointers in 1998 and 2001, things have not changed. Worse, the near impossibility of bringing about a change is highlighted by none other than the December 2008 report of a Lok Sabha committee on MPLADS. For the record, the MPLADS fund goes directly to the district authority, which executes works recommended by the MPs, inspects, issues completion and utilisation certificates and also updates website of the ministry of statistics and programme implementation (MoSPI), especially designed for the purpose.
After going through persisting and glaring shortcomings in all these activities and failure of implementing its suggested measures, the Lok Sabha panel’s report says:
* The panel is “aghast” to find that the action taken reports (ATRs) on two performance audits of MPLADS submitted in 1998 and 2001 are overdue by 10 and seven years, respectively.
* The panel is “perturbed” to note that in certain cases no action could be initiated against erring officers for years, despite the fact that the issue was raised with the MoSPI “repeatedly” and “constantly”.
* The panel finds to its “utter surprise” that MoSPI simply kept writing letters and reminders to the state governments after being questioned.
* The panel was “shocked” by the response of the MoSPI that “no action can be taken against the officers responsible for violating the Guidelines”.
It went on to suggest that the scheme be turned into a “statutory” one with “penal provision” to punish recalcitrant officials of the states and the centre for proper
implementation. But there is an easier solution.
Dismantle It
The supreme court may have declared the MPLADS “intra vires” of constitution but that doesn’t, in itself, justify the scheme in any way. And that is because since the MPs’ job is “limited to recommending”
works, as the apex court rightly pointed out, they can do this without having to run a development scheme. They would do this better by attending the district level planning meetings, which they are supposed to but don’t.
In fact, when Somnath Chatterjee was told about the hike in the MPLADS fund, his reply was: “I will describe it in three words – unfortunate, if not tragic, and anti-democratic.” (see box)
After winning the mandate for the second time, Bihar chief minister Nitish Kumar immediately dismantled MLALADS - a parallel scheme adopted by the states (even the corporators in Delhi and Mumbai have similar funds ranging from Rs 50 lakh to Rs 2 crore at their disposal) - on the precise ground that it isn’t the MLAs’ job to run a development scheme and that the scheme only increases scope for corruption (see box).
The advantages of dismantling the scheme are many. First to go is the elaborate monitoring and accountability system, saving precious manpower and manhours in the process which can be put to better use. Secondly, the MPs may then be forced to attend the district-level planning meetings. Thirdly, it would help in “devolution” of power to the local selfgovernment bodies, thereby fulfilling the mandates of the 73rd and 74th constitutional amendments. So long as the MPs have their own funds to splurge, they have little incentive to honour this commitment. Fourthly, the corrupt system of patronage peddling will go.
Fifth, we save huge sums of money that can be put to better use, either to achieve the same goal or some other. An annual sum of Rs 5 crore to 790 MPs for a period of five years (minus the extra year for the Rajya Sabha members) means a princely sum of Rs 19,750 crore. This is good enough to, say for example, finance state-funding of elections. Ever since the Indrajit Gupta Committee came out with its formulations for the same in 1999, the government showed little interest, pointing out the futility of it all because of the “lack of funds”. Now that it forms a part of UPA chairperson Sonia Gandhi’s fivepoint formula to check corruption, interest in the subject has revived.
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‘Do away with it’
National Commission to Review the Working of Constitution (2002): “The role of a Member of Parliament must undergo some change as a result of Panchayat Raj institutions taking charge of some local matters. The MP LAD Scheme is inconsistent with the spirit of federalism and distribution of powers between the Union and the States. It also treads into the areas of local government institutions. The Commission recommends immediate discontinuance of the MPLAD Scheme as being inconsistent with the spirit of the Constitution in many ways.”
Administrative Reforms Commission (2007): “Apart from infringing on the rights of the local governments, the most serious objection to the scheme is the conflict of interest that arises when legislators take up executive roles.”
National Advisory Council (2005): “Ideally, local area development needs should be determined and interventions made by the elected local governments. Therefore, MPLADS should be dispensed with, and these funds should directly go to panchayats and municipalities for the same purposes... This will ensure a substantial devolution to local governments. The local governments should own, manage, monitor and control all these new programmes and missions.”
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What They Say
Jagdeep S Chhokar, former dean of IIM Ahmedabad: It is very unfortunate that instead of being abolished MPLADS fund has been increased to Rs 5 crore. In spite of the supreme court upholding the scheme - with due respect to the court - MPLADS is essentially unconstitutional and should have no place in a real and progressive democracy. It destroys the principle of separation of power, making members of legislature responsible for executive work which shouldn’t be their job. In addition, MPLADS is also a negation of the 73rd and 74th amendments.
N C Saxena, member of NAC: My view is to abolish it. An MP’s job is in the legislature, making laws and policies. Implementation is the executive’s work. MPLADS creates confusion between the legislature and the executive.
Somnath Chatterjee, former speaker of Lok Sabha: I will describe it in three words: unfortunate, if not tragic and anti-democratic. MPLADS is against and intended to upset state government and district plan for development. The MPs are being invited for participation in formulation of the district plans. They don’t go. They can disturb the planning process through their political considerations about which area to be developed and which not. They have political interests and I am sorry the state is providing the resources to further the same. As for the hike in MPLADS fund, it is amazing that the finance minister is taxing the hospitals on the one hand and is trying to pamper the MPs by a 150 percent increase on the other.
Ram Naik, former MP: It is a good move. Despite the five-year plan and annual budget, small things remain unattended... MPs and MLAs are elected institutions and they must have a say in development. They are better equipped to have a social overview than the local self-government bodies which
may differ with each other on some issues.
Anjali Bhardwaj, Satark Nagarik Sangathan: The crux of the problem is that the MPs don’t consult citizens on their needs. The guidelines don’t envisage this for identifying development needs of the people. And there is no system of people’s participation in monitoring and auditing these works.
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Guidelines for MPLADS, 2005
• Public display of all completed and ongoing works with MPLADS funds at the district authority office and posted in the website for information of the general public
• The district authority should ensure that details of the work sanctioned are entered in the Input Format and uploaded in the MPLADS website (www.mplads.nic.in) or transmitted to the ministry of statistics and programme implementation for hoisting in its website.
• Two parliamentary committees on MPLADS to monitor the scheme
• MoSPI to monitor release of funds, cost of works, funds spent and also monitor receipt of completion reports, utilisation certificates and audit reports
• MoSPI website to carry complete details of each MP’s recommended works
• States/UTs to web hoist status of MPLADS on their respective states
• Photographic evidence for all works of Rs 5 lakh or more for web hoisting
• MoSPI to bring out annual report on implementation of MPLADS
• Review of implementation by divisional commissioners at state level
• Audit by CAG
• Physical monitoring by Nabard Consultancy Services (NABCONS)
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Legislators' task is different
Bihar chief minister Nitish Kumar scrapped local area development fund for Bihar legislators without much ado. The fact that he got support for this from all the political parties in the state counters the very logic of union finance minister Pranab Mukherjee’s move to raise the MPLADS fund from Rs 2 crore to Rs 5 crore
per year.
Time and again Nitish Kumar has made it clear that the task assigned to the legislators is entirely different. “They are supposed to lay down policies, make laws, recommend public works and supervise the executive,” he commented while explaining the distinct nature of functions assigned to the executive and the
legislature.
This is the precise reason why he asked all legislators to recommend works in their areas without
bothering about the fund. In his view, the agencies assigned with the task of development are
better equipped to take up such works and deliver maximum results.
Given the fact that Nitish Kumar won the fresh mandate on the basis of good governance and
anti-graft drives, it was befitting.
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