Originally Published 2012-03-23 00:00:00 Published on Mar 23, 2012
A study undertaken by ORF on the Members of Parliament Local Area Development Scheme (MPLADS) found that there is a need to work on the loopholes of the scheme and take corrective measures for its better implementation.
MPLAD Scheme: Need to work on loopholes
In India, there are large variations in infrastructure development across the States. The Members of Parliament Local Area Development Scheme (MPLADS) is one of the steps taken to address the issue of inequity in development. Under the Scheme, yearly allocations are provided for undertaking developmental works within an electoral constituency.

However, a preliminary survey of literature suggests that the scheme has shown varied performance across the country. The sustainability and the need for the scheme have also been questioned, time and again. This article provides information on various issues associated with the scheme as well as its significance. The review is based on secondary sources of information, and topics covered include Scheme procedures and guidelines, data on utilisation of funds and completion of projects both at the all India and State level. The appraisal led to an understanding of the issues and challenges confronting the Scheme. 

MPLADS - A brief description

MPLADs was introduced in 1993 to enable MPs to recommend works of developmental nature based on locally felt needs. It is a centrally sponsored scheme under which funds are released as grants-in-aid directly to the District Authorities by the Government of India. The MPs may recommend projects in sectors such as infrastructure development, public health, sanitation, water, etc. Elected members of Lok Sabha can suggest developmental works in their constituency, while elected members of Rajya Sabha can recommend works in one or more districts of their State. Nominated members of Lok Sabha or Rajya Sabha can recommend works in one or more districts anywhere in the country.

The MPs identify works, which are allowed under the guidelines, and recommend them to the District Authority, which in turn is responsible for the overall implementation of the works. It is the responsibility of the District Authority to scrutinise and sanction the recommended works and to identify an implementing agency to execute the work. Local self governments such as the Panchayati Raj Institutions and Urban Local Bodies, government departments (such as Housing Boards, Electricity Boards and Urban Development Authorities), or reputed NGOs can be selected for implementing works.

The Ministry of Statistics and Programme Implementation formulates the guidelines, releases funds, and monitors implementation. At the State level, a nodal department is responsible for coordinating, monitoring and supervising the implementation along with other relevant departments and the District Authorities.

In 1993-94, the scheme was started with an amount of Rs. 5 lakh allocated to each MP. This was increased to Rs. 1 crore in 1994-95 and to 2 crore in 1998-1999. Recently, it was further revised to Rs. 5 crore in 2011, per MP, per annum. This is released in two equal instalments of Rs. 2.5 crore each by the Government of India directly to the District Authority of the MP, with the State nodal department and the MP, duly intimated. It is the duty of the District Authority and the Implementing Agency to deposit the funds in a nationalised bank and a separate account is opened for each MP for this purpose. MPLADS funds are non-lapsable.

Performance of MPLADS

At the all India level for the year 2009-10, full allocation of Rs. 1531.50 crore was released. The expenditure incurred was Rs. 1073.98 crore. The percentage utilisation over release was 70.13. While the number of recommended works was 53891, the number of works sanctioned was 42582. Further, a total of 48345 works were completed during the year. The percentage of works completed to works sanctioned was 113.53.

A classification of States on the basis of their fund utilisation percentage over release into high, medium and low performing states reveals the following - high performing states (those with a utilisation percentage of 80% and above) mainly comprise northern (Uttarakhand, Punjab and Himachal Pradesh) and eastern (Meghalya, Mizoram, Sikkim, Arunachal Pradesh and Nagaland) states. Maharashtra and Chhattisgarh also fall in this category. Where as Assam, West Bengal and a majority of western and southern states fall in the medium category, with a utilisation percentage between 60 and 80. The remaining states namely Haryana, Bihar, Andhra Pradesh, Delhi, Goa, Manipur, Jharkhand, Tripura and Jammu and Kashmir make up the low performing category with a utilisation percentage of below 60. Jammu and Kashmir has recorded the lowest fund utilisation percentage of 54.61 compared to Uttarakhand which has the highest percentage of 117.38.

Further, if we look at the States as per their percentage of works completed to works sanctioned, the following scenario emerges - Meghalya tops the list with a work completion percentage of 198.2 in stark comparison to Manipur with a percentage of 15.89. The high performing states (with a percentage of more than 150) comprise Kerala, Arunachal Pradesh, Goa, Delhi, Bihar, Madhya Pradesh and Sikkim. Majority of the western states along with a few states from the east (Nagaland, Orissa and Assam) coupled with Uttarakhand and Uttar Pradesh fall in the medium category with 100-150 percentage. Others fall in the low performing category with a percentage below 100. The data reveal that Himachal Pradesh, which recorded a high fund utilisation percentage of 100.37, has the third lowest works completion percentage of 55.73. This makes Himachal Pradesh a case for undertaking a detailed study to understand the reasons responsible for the slow progress in the completion of infrastructure projects.

Issues and Challenges

MPLADS has been in contention since its very inception. There are a number of issues which plague the scheme. First is the issue of corruption - there have been cases of widespread corruption and mis appropriation of funds. In a lot of cases, private contractors (which are not permitted) are engaged to implement the works.1  Also, there have been instances where expenditure has been incurred on works which are prohibited under the scheme.2  Second relates to funding - there are large amounts of unspent balances rising over the years, low utilisation of funds and an expenditure bias towards a particular sector. A significant number of MPs are yet to open a bank account.3  Third relates to delivery - there are weaknesses in the process of sanction. The District Authorities tend to execute works without receiving any recommendations from MPs concerned or on the recommendation of the representatives of the MPs rather than the MPs themselves. Further, there are lapses on the monitoring and supervision front, with the District Authorities failing to inspect the required number of sanctioned works as well as in sending regular monitoring reports.4  Fourth issue relates to the sustainability of the scheme - there have been charges that the scheme goes against the spirit of the 73rd and the 74th Amendment, with MPs enjoying the privilege of an uninterrupted yearly flow of funds to do the work which local bodies are better placed to deliver. The constitutionality of the scheme has also been questioned, with the argument that the scheme erodes the notion of separation of powers, as the legislator directly becomes the executive.5

Along with these, there are other issues such as - lack of adequate information available to MPs, which sometimes leads to a disproportionately large amount of money flowing into one district. There also seems to be an absence of a proper mechanism to ensure constituent participation in order to determine locally felt needs, leaving open the possibility of a small group, having easy access to the MPs, impressing upon him to recommend works according to their needs.6

Conclusions and suggestions

This study analysed available data and recommendations made by various institutions and it was felt that the scheme is a unique one which can aid in improving the developmental profile of the States. The scheme connects the MPs to their constituents and helps citizens assess whether the spending has been in line with the promises made or not. As such, we are not in favour of scrapping the scheme. Rather, there is a need to work on the loopholes and take corrective measures for its better implementation. Some of the ’best practices’ followed across the country can also be replicated or innovated upon. Accordingly, the following alternatives can be looked at:

• The "Kottayam experience" shows that participatory planning has mixed well with the MPLADS. PRIs, as an implementing agency, have acquired skills of implementation, considerably improving their role.7

• There needs to be a greater focus on regular monitoring by the District Authorities. The practice of random inspections by the District Authority, both before the release of the second instalment and after the completion of the work, is a good practice followed in Varanasi.8  Implementing agencies could involve the local community in the voluntary supervision of works. Since maintenance of public assets is where the system breaks down, arrangements can be made for the maintenance of assets or maintenance can be outsourced.

• In order to better assess the needs of the constituents, surveys can be conducted across the constituency. For this purpose, NGOs and local community can be involved. Once the needs of the constituency are determined, implementation can be linked to what’s needed.

• For the scheme to be more effective, an impact assessment study should be undertaken at the constituency level, on a yearly basis, to assess the benefits of the works implemented to the community at large.

• To tackle the issue of large unspent balances which have accumulated and are rising over the years, fund can be made lapsable. This way funds lying unused can be put to other uses.9

• Thrust areas, as mentioned in the Annual Reports of the Ministry, could be also modified so as to reflect the needs of the constituency, rather than taking a generic view.


1. Ministry of Statistics and Programme Implementation, 2005, "Guidelines on MPLADS".

2. Ministry of Statistics and Programme Implementation, 2011, "MPLADS, Annual Report 2009-10".

3. Prasanna Mohanty, 2011, "Don’t Fiddle, Dismantle MPLADS", Governance Now.

4. Siba Sankar Mohanty, 2004, "Rhetoric and Reality of MPLADS", Centre for Budget and Governance Accountability.

5. The Hindu, 2011, "Lalu, 24 others yet to touch MPLADS funds".

(Ruchira Chaturvedi is a Research Intern at Observer Research Foundation)

< class="text11verdana">1  Planning Commission, 2001, Evaluation Report on MPLADS.
2  Comptroller and Auditor General of India, 2010-11, Performance Audit of MPLADS.
3  Anshuman Tiwari, 2011, 151 MPs including PM, ministers yet to open bank accounts for MPLADS funds, Jagran Post.
4  Comptroller and Auditor General of India, 2010-11, Performance Audit of MPLADS.
5  Yamini Aiyar, 2011, SC upholds the MPLADS Scheme, Accountability Initiative.
6  Planning Commission, 2001, Evaluation Report on MPLADS.
7  NABCONS, Summary of Major Findings of Monitoring Study of MPLAD Scheme under Phase III, Ministry of Statistics and Programme Implementation.
8  NABCONS, Summary of Major Findings of Monitoring Study of MPLAD Scheme under Phase III, Ministry of Statistics and Programme Implementation.
9  Planning Commission, 2001, Evaluation Report on MPLADS; Lok Sabha, 2011, Starred Question No. 244.

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