How MPs have spent their money

That the Members of Parliament Local Area Development Scheme is conceptually flawed is evident from the inadequacies in its implementation. Local development is an area best left to the panchayats.

NOW that we are in the process of electing our national people's representatives once again, it is time for the usual efforts at assessing the past performance of our Members of Parliament. MPs in India have multifarious responsibilities, all of them crucial to democracy and to the current and future well-being of society. They are responsible for legislation which has become increasingly complicated and demanding in the present international context; they are called upon to monitor the overall tendencies of administration and implementation of the laws; their interventions in Parliament are among the important means of public expression of approval or disapproval of the activities of the government and can become instruments for changing public policy or action.

It would seem that, just in terms of national level functions, our MPs already have too much work and too many onerous responsibilities. It is, therefore, surprising to realise that in the past decade parliamentarians have voluntarily chosen to add to their many tasks, by taking on the job of administering development in their individual constituencies. It was a long-standing demand of MPs that they should be able to recommend developmental works involving capital expenditure, to be carried out in their respective constituencies. Because of this, a scheme, known as the Members of Parliament Local Area Development Scheme (MPLADS), was initiated in late 1993.

Under this scheme, each MP provides a list of desired projects to the District Collectors concerned, who get them implemented according to certain established procedures laid down in the guidelines. The total amount available for an MP per year was Rs.1 crore until 1998, which was increased to Rs.2 crores.

It is worth considering the reasons why this scheme was introduced. A report of the Rajya Sabha on the matter declared as follows:

"Members of Parliament, being the true representatives of the people, are more conversant with the realities and intricacies of the structural requirements of their constituency, particularly with reference to the economic and social bottlenecks, more so in the remote and tribal areas... (They) are often approached by their constituencies for executing implementation of small works mainly capital in nature to be undertaken in their individual constituency... .

(MPs) had to recommend such works either to local bodies, municipalities or State government. During those times, the member did not have direct involvement either in the administrative implementation of such works or in the financial aspect involved in undertaking the works. He (sic) had to remain merely a silent spectator and any element of corruption which generally creeps in the entire system of implementation of projects and financing of the system, the member could not interfere due to some unavoidable limitations in the entire scenario of the system... .

The ghastly countenance of the mechanics of mal-implementation/non-implementation of projects coupled by improper channelisation of funds for projects and absence of close monitoring of schemes contributed negatively to the entire scenario which gradually assumed a pernicious aberration from a normal state of affairs" (First Report, MPLADS Committee, Rajya Sabha).

So, clearly, the parliamentarians who backed the scheme felt that they could do a better job than the prevailing institutions, in terms of backing more useful and locally relevant projects and supervising more efficient and less corrupt implementation of these projects. And these have remained the arguments of those who support this scheme.

THIS being the case, it is certainly worth assessing how effective this scheme has been, and what has actually been the performance of our MPs with respect to the fairly large amounts of money at their disposal every year for this purpose. A new study undertaken by the Centre for Budget and Governance Accountability ("Rhetoric and Reality of MPLADS", Siba Sankar Mohanty, CBGA 2004) provides important information on the functioning of the scheme thus far.

The study examined actual allocations by MPs, took into account the report of the Comptroller and Auditor General (CAG), and also did a survey in some sample constituencies. The findings of this study are rather disturbing for the supporters of the MPLADS scheme.

To begin with, until 2003 only 77 per cent of the total entitlement of MPs had been used. As many as 31 MPs did not use even a single rupee of their entitlement by 2003, while there were 23 MPs who appeared to have used more than 100 per cent, a budgetary anomaly that has not been resolved. Lok Sabha members used 77 per cent of their entitlement, while Rajya Sabha members used 48 per cent. The study also found that representatives from the national parties such as the Congress and the Bharatiya Janata Party tend to have lower utilisation of MPLADS funds than those from smaller and regional political parties.

The CAG report on MPLADS (tabled in the Lok Sabha on April 17, 2001) listed a number of shortcomings of the functioning of the scheme. These included: irregularities at the level of recommendation of works by MPs; use of funds for inadmissible purposes such as construction of temples, renovation of residences, works belonging to commercial and private organisation, and so on; failure to obtain utilisation certificates in most cases; various corrupt practices such as misreporting of recorded expenses, over-billing, fake muster rolls, underpayment of wages, tinkering with labour-material ratios and so on. In other words, the projects under the MPLADS scheme have been burdened with almost the same problems as the other public infrastructure projects that the parliamentarians protested about and used as arguments for pushing this scheme.

A subsequent Planning Commission evaluation found that in spite of huge unspent balances, MPs appeared to be very thrifty in allocating funds to individual projects, with half the projects receiving less than Rs.50,000 and only around 3 per cent receiving Rs.5 lakhs or more. While the largest proportion of expenditure was on roads, the small amounts on individual projects typically meant that the roads tended to be kutcha, of poor quality, failing to provide effective connectivity and not providing durable assets. MPs have tended to allocate their funds even before cost estimates are provided, often using private contractors as the executing agencies even when public or local community agencies can undertake the jobs. So once again, the difficulties associated with other public works have been repeated in the case of MPLADS projects.

In the sample constituencies, the survey found that the expenditure pattern had been oriented towards projects (such as roads, bridges, and so on.) for which funds could have been arranged from other sources, rather than on localised development issues. In several of the sample districts such as Alwar, Bhopal and Ghazipur, employment, health and drinking water quality were identified by the people as the most important problems, but the MPs' funds had been used for other purposes. Typically, MPs relied on suggestions made by local party workers and similar interest groups rather than more extensive interaction with would-be beneficiaries. The most common complaints made by respondents were of inadequate employment generation, poor quality of work, corruption, lack of interest on the part of the elected representatives and use of such funds for narrow political gain.

All this suggests that so far at least, this scheme has not been much of a success. But perhaps we are mistaken in even expecting it to be. Ideally, funds for local development should be controlled by local representatives whose primary function is to cater to the needs of and be responsible to the local population - that is, the panchayats at different levels. In fact, providing funds for local development to MPs whose interests and concerns are intended to be national, is probably misguided. If local relevance and control over infrastructure projects for development are truly sought, then these should be under the control of locally elected bodies whose responsibilities do not extend much further afield.

So the inadequacies and shortcomings of the MPLADS probably stem for the very conception of the scheme itself. The time when another set of newly elected MPs will soon enter Parliament may be an appropriate time to reconsider it.