Sharad C. Misra*

The MP Local Area Development (MPLAD) Scheme was initially launched in December 1993 with an amount of Rs. 5 lakh per MP per year. The amount was increased to Rs.1 crore in 1994-95 and to Rs. 2 crore in 1098-99. It has now been increased more than twofold to Rs. 5 crore with increased allocation of Rs.2,370 crore for the Financial Year 2011-12, as announced by the Finance Minister during his reply to the debate on the General Budget in the Lok Sabha. This offer was welcomed by all the MPs barring the Left. Significantly, the MPLAD Fund is outside the State and Central Plan and is not taken into account in determining the Plan outlays of the States.

Currently overseen by the Ministry of Statistics and Programme Implementation, the MPLAD Scheme provides that each Lok Sabha MP has the choice to suggest to the District Collector works in his/her Constituency estimated to cost up to Rs.2 crore per annum, since increased to Rs. 5 crore. The Rajya Sabha MP can recommend works in one or more districts in the State from where he/she has been elected while the nominated members of both the Houses may select any one or more districts from any one State in the country for implementation of the works of their choice.

The Scheme was challenged in the Supreme Court by COMMON CAUSE and others under Writ Petition (civil) No. 404 of 1999 on the ground that it was discriminatory and unconstitutional. The petitioners also pleaded that the Scheme led to its misuse and misappropriation of funds, as brought out in the reports of the Comptroller and Auditor General of India. The petition was considered by a Constitution Bench headed by Chief Justice Mr. K.G. Balakrishnan. In its judgment delivered on May 6, 2010, the Court held that “the Scheme benefitted the local community by meeting its various development needs such as, drinking water facility, education, electricity, health and family welfare, irrigation , non-conventional energy, community centers, public libraries, bus stands, pathways, bridges and sports infrastructure”. As for the constitutional validity of the Scheme which was the core issue involved the Court observed that since it was voted and approved by the Parliament like any other Appropriation Bill it was not unconstitutional. In regard to misuse of funds the Court held that there were enough ‘checks and balances’ to prevent it and that on all these counts there was no case for judicial intervention for scrapping the scheme.

The increase of MPLAD fund from Rs.2 crore to Rs.5 crore has imposed a heavy burden on the tax-payers whose benefits need to be reappraised. The Supreme Court’s ruling in support of the Scheme forecloses the option of making out a case for its review in regard to its constitutional validity. But regarding misuse of funds, one may venture to say that even though there were ‘checks and balances’ in collection of income-tax, excise and customs duty, property-tax, foreign exchange regulation etc. there was massive corruption in all these areas which motivated Anna Hazare to launch his anti-graft agitation, But, besides the constitutional validity of the Scheme which was the main focus of attention of the Constitution Bench there are other aspects too which merit detailed consideration that might justify scrapping of the Scheme in its present form and replacing it with one which is more equitable and beneficial to the society.

The main objection against the MPLAD Scheme is that it is highly regressive. The funds placed in the hands of each MP are equal and hence unrelated to the state of development of the constituencies which varies widely. For instance, the MP representing Madhepura in Bihar, one of the most backward constituencies, would be given the same amount of Rs. 5 crore as those representing Amethi or Rai Bareli, the highly developed constituencies in UP. Within the same State there are vast differences in the state of development of the different constituencies, particularly in urban and rural areas. Since the Scheme has been approved by the Parliament by majority vote no MP representing a backward constituency can plead his case for relatively more funds being given to him/her even though his demand may be apparently justified nor can a Non-Government Organization (NGO) now petition the Supreme Court alleging that the Scheme was unconstitutional.

A better arrangement would be to grant total amount of MPLAD fund to the States and to treat the Scheme like any other Centrally Sponsored scheme. Thus for example, if a certain State is represented by say, 80 MPs in the Lok Sabha and Rajya Sabha it may be given a total amount of Rs.400 crore per year and the amount to be given to each MP may be determined by the State based on the extent of backwardness of the constituency he/she represents. It should be left to the States to lay down the criteria of backwardness, guidelines and procedures for applying the fund in consultation with the Planning Commission. This would also help in identifying, planning and executing the MPLAD projects in coordination with the projects provided in the State plans and avoid overlap, duplication and conflicts which would improve the quality of planning. Since the Center would provide the funds to the States the Planning Commission also needs to be closely involved in monitoring and evaluation of the projects.


The suggestion made by Shri Sharad Misra in the preceding article may rectify the inherent
inequity of a local area development scheme that makes an annual allocation of a fixed sum of money
to every parliamentary constituency regardless of its size and level of development. The scheme will,
however, still violate the principles of federalism, democratic decentralization and separation of powers
between the legislature and the executive. The following observations of the National Commission to
Review the Working of the Constitution (NCRWC), the National Advisory Council (NAC) and the
Second Administrative Reforms Commission (SARC) elucidate these points.

NCRWC (2002)

“The MPLAD scheme is inconsistent with the spirit of federalism and distribution of powers
between the union and 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.”

NAC (2005)

“The MPLADS scheme is implemented through district collectors. Ideally, local area development
needs should be determined and interventions made by the elected local governments. Therefore,
MPLADS scheme should be dispensed with, and these funds should directly go to Panchayats and
Municipalities for the same purposes.”

SARC (2007)

“These schemes seriously erode the notion of separation of powers, as the legislator directly
becomes the executive.”

“The use of discretionary funds at the disposal of legislators, the power to determine specific
projects and schemes or select the beneficiaries or authorize expenditure shall constitute discharge
of executive functions and will invite disqualification under articles 102 and 19 (of the Constitution),
irrespective of whether or not a new office is notified or held.”

Unfortunately, these considered views failed to impress the Constitution Bench of the Supreme

Experience has shown that in the absence of any mechanism to enforce accountability, the
exercise of executive authority by legislators may give rise to corrupt practices. The sting operation
code named “Operation Chakravyuh” (November 2005), which presented the unedifying spectacle of
six Members of Parliament seeking commissions for allotting Scheme funds for development work in
their constituencies, should still be fresh in the public memory.


The Common Cause fraternity mourns the demise of its esteemed life member, Mr. B.G.
Deshmukh, who left for his heavenly abode on August 7, 2011. A public servant par excellence, who
rose to the pinnacle of the civil services as Union Cabinet Secretary during the prime ministership of
Rajiv Gandhi, he greatly influenced the evolution of policies of economic liberalization, democratic
decentralization and adoption of technology. After his retirement, he continued to take an active
interest in various social activities. He was one of the founders of Public Concern for Governance
Trust, which was set up in 2002 to fight corruption and promote good governance.

Mr. Deshmukh took a keen interest in the activities of Common Cause. In October 2010, we
were greatly enthused to receive a letter of appreciation from him along with a generous contribution
of Rs. 75,000/-. His kind words will continue to inspire our team to redouble its efforts to further the
public causes that we espouse.

Common Cause extends its heartfelt condolences to the bereaved family and joins it in praying
for the eternal peace of the departed soul.

* Mr. Sharad C. Misra is a political commentator writing on a variety of subjects of national importance.
Basically a development economist, he held important positions in the Government and later joined
the United Nations Organization as Technical Assistance Advisor.


April – June, 2011