A scheme under fire

Rajib Bhawan, the Congress office in Dergaon constituency in Jorhat district of Assam, which was sealed by the Election Commission after it found that the MLA's local area development fund was diverted to build it.-RITU RAJ KONWAR

The Administrative Reforms Commission recommends that for good governance constituency development funds must be scrapped.

THE Second Administrative Reforms Commission (ARC) has recommended the abolition of the Members of Parliament Local Area Development Scheme (MPLADS) and the Members of the Legislative Assembly Local Area Development Scheme (MLALADS) on the grounds that these schemes "seriously erode the notion of separation of powers, as the legislator directly becomes the executive".

In his preface to the report on "Ethics in governance", ARC Chairman M. Veerappa Moily states: "Prevalent institutional arrangements have to be reviewed and changes made where those vested with power are made accountable, their functioning made more transparent and subjected to social audit with a view to minimising the discretionary decisions. All procedures, laws and regulations that breed corruption and come in the way of efficient delivery system will have to be eliminated."

The ARC's recommendation to scrap the constituency development schemes is a step in the right direction to ensure good governance.

Under the scheme, the Centre gives each MP an annual grant of Rs.2 crores to be spent on works chosen at his or her discretion in his/her constituency. A system of placing public money at the disposal and discretion of the legislator has never been undertaken in any other country.

When Prime Minister P.V. Narasimha Rao announced the scheme in the Lok Sabha on December 23, 1993, Communist Party of India (Marxist) leader Somnath Chatterjee, now Speaker, opposed it saying: "On principle we are not accepting this proposal. This will mean only disturbing the priority which is decided by the district planning body."

After a decade, Somnath Chatterjee's criticism of the scheme only became sharper. Expressing his views to senior journalists on July 28, 2005, he said: "The scheme should be scrapped. Note that this scheme was launched immediately after passing the Constitution 73rd Amendment. The game clearly was to sabotage the emergence of panchayats, which were autonomous of the weight-throwing MPs and MLAs."

Justice E.S. Venkataramiah, former Chief Justice of India, called the scheme an assault on the Constitution. In a scintillating analysis made in February 1997, he pointed out: "The scheme has the effect of interfering not merely with the federal scheme but also with the healthy constitutional principle of separation of powers; there is no provision in the Constitution, conferring power on individual MPs for spending public money or giving directions to any officer, particularly an officer belonging to a State public service, on any matter. Collectively, when they sit in their respective Houses, they exercise the sovereign power of Parliament; individually they are like every other citizen."

The ill-effects of the unconstitutional and undemocratic nature of the scheme were exposed by the audit reports of 1998 and 2001. The reports pointed out several instances of mismanagement and misuse of funds as on March 31, 2000: there has been no proper accounting system, leading to non-maintenance of accounts and a lack of accountability to the government; non-refund of the Rs.3,689 crores remaining unspent with the district heads and implementing agencies; the district heads failed to submit utilisation certificates for 11,915 works, forming 70 per cent of the total works completed under the scheme; district heads had themselves spent money on 5,587 works under the scheme without the recommendations of the MPs concerned; several works not permissible under the scheme have been completed.

Works were allowed in places of religious worship, which are not only prohibited under the scheme but are unconstitutional as per Article 27.

The audit report of 2001 concluded: "In summary, in its present form, the scheme, which is in operation since December 1993, has hardly served its main objectives. In view of these findings and the findings of the 1998 audit report, the Central government needs to have a thorough review of the present arrangements for the implementation of the scheme."

The Evaluation Team (2001) of the Planning Commission, after visiting several spots where works were undertaken under the scheme, said in its report: "Many MPs do not have full information even about the works they have recommended; the works thus recommended by MPs may not correspond to the pressing needs of the large section of the population. Consequently, the felt-needs of many others may get overlooked; a small group of persons having easy access to the MP at times may impress upon him to recommend works according to their felt-needs; it seems that in a large number of cases, once the work is recommended, sanctioned and fund released, nobody kept track of the progress; the evaluation team during its field visits failed to locate quite a few of the assets claimed to have been created in these sectors.

Such cases, largely a consequence of weak monitoring, perhaps encourage various types of irregularities to thrive; both the Comptroller and Auditor-General of India and this evaluation team found financial mismanagement of the scheme and consequent inflated reporting of the amount spent; monitoring and supervision is perhaps the weakest part of the scheme; and functionaries at different levels conceded poor maintenance of the assets created under the scheme."

Until now, neither the government nor Parliament has taken any steps to examine the reports of the audit and evaluation teams. On their part, the State legislatures have also begun to allocate annual grants of Rs.1 crores or Rs.2 crores to MLAs. Some municipal corporations are giving ward development funds to councillors.

About the MPLAD Scheme, the report (2002) of the National Commission to Review the Working of the Constitution, which was headed by former Chief Justice M.N. Venkatachaliah, recommended: "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."

More than the reports of the committees and commissions, leaders of political parties have, time and again, called for the withdrawal of the scheme to avoid blanket charges of misappropriation of funds against all MPs. In a Short Duration Discussion in the Rajya Sabha on December 10, 2003, on charges of diversion of the MPLADS funds, Leader of the Opposition Manmohan Singh said: "If you allow things to go this way, people will lose faith in politicians and the democratic system of governance. This will be a mockery of our legal system also."

Following a sting operation telecast by a television channel in December 2005 showing MPs getting commissions for recommending schemes, the Speaker held meetings with the leaders of the Opposition parties. At that time, Bharatiya Janata Party leader L.K. Advani suggested the scrapping of the scheme and allotting the funds involved to the corpus for state funding of elections. D.P.Yadav, leader of the Rashtriya Janata Dal, considered the scheme unconstitutional, and K. Yerran Naidu, leader of the Telugu Desam Party, said his party was against the scheme.

In order to monitor the implementation of the National Common Minimum Programme of the United Progressive Alliance government, the government set up, in June 2004, the National Advisory Council (NAC) with Congress leader Sonia Gandhi as chairperson. The NAC recommended discontinuance of MPLADS. In its recommendation of April 2005, it said: "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... . Several new schemes, missions, and projects have been launched by the Union government in pursuance of the National Common Minimum Programme. Most of these programmes, and most components of these programmes, cover the subjects in XI and XII Schedules. All these programmes should be implemented by local governments, and all the funds should be kept at their disposal... . This will ensure a substantial devolution to local governments. The local governments should own, manage, monitor and control all these new programmes and missions."

When I expressed my anguish at the undemocratic and unconstitutional distortions made to the accountability of the parliamentary system and the legislators being made part of the executive, many members thought that I was idealistic. When the audit reports came and the Institute of Social Sciences, New Delhi, published my report `MPLADS - Concept, Confusion and Contradictions', the politicians became aware of the growing resentment of the public against the mismanagement and misuse of the scheme's funds. Ten cases are pending in the Supreme Court questioning the constitutionality of the scheme. Although the leaders are convinced of the futility of the scheme, they are yet to convince their MPs who are reluctant to give up the annual discretionary funds.

After the television expose of the scam in the distribution of MPLADS funds in 2005, Sonia Gandhi and Prime Minister Manmohan Singh urged the MPs at the Congress Parliamentary Party to "do some introspection and adhere to the code of ethics".

The ARC has incorporated the decisions of the NAC and the code of ethics stressed by the Congress president and the Prime Minister in its report. Aptly, its recommendation for the abolition of MPLADS and MLALADS is made under the chapter "Ethical Framework". The report will hopefully put an end to the ill-plannedand ill-implemented scheme.