MPLADS: Members of Parliament Local Area Development Scheme

By BYJU'S Exam Prep

Updated on: September 13th, 2023

Recently the government suspended the Member of Parliament Local Area Development (MPLAD) Scheme for two years so that these funds could be utilised for COVID-19 management efforts. MPLAD Scheme has been very controversial since the last 2 decades and the recent Suspension of MPLAD Scheme has opened up yet again the discussion on the need of MPLAD. This topic is important for upcoming UPSC Prelim and Main Exam.

MPLADS: Members of Parliament Local Area Development Scheme

Historical Background:

  • The MPLAD scheme was introduced in December 1993 by Prime Minister, P.V. Narasimha Rao to fulfil the urgent needs of the legislator’s constituency.
  • The scheme was mooted after MPs demanded that they should be able to recommend certain development projects in their constituencies.
  • It is under the aegis of the Ministry of Statistics and Programme Implementation.


  • It is a Central Sector Scheme.
  • It is budgeted through the government’s finances and continues as long as the government is agreeable.
  • In 2018, the Cabinet Committee on Economic Affairs approved the scheme until the term of the 14th Finance Commission, that is March 31, 2020
  • Lok Sabha Members can recommend works within their constituencies and elected Members of Rajya Sabha can recommend works within the State they are elected from.
  • Nominated MPs both the Upper House and Lower House can recommend works anywhere in the country.
  • It aims to create durable assets of national priorities –
    • Drinking water
    • Primary education
    • Public health
    • Sanitation and roads
  • Non-durable assets can be created only under special circumstances. For example, Recently, MPLADs funds are utilised for the purchase of personal protection equipment, coronavirus testing kits etc.
  • MPLADS works can be carried out in areas affected by natural disasters, chemical, biological and radiological hazards.
  • Implementation:
    • The role of the MP is limited only to the recommendation of works to District authority.
    • At the National level, The Ministry of Statistics and Programme formulates the guidelines, releases funds, and monitors implementation.
    • At the State level, a nodal department is responsible for coordinating, monitoring and supervising the implementation
    • At District Level; District Authority scrutinises and sanction the recommended works and identifies an implementing agency to execute the work.
    • Implementation Agency: Panchayati Raj Institutions and Urban Local Bodies are one of the few designated agencies to carry out implementation work.
  • MPLADS Fund
    • Every MP gets ₹5 crores for carrying out developmental works in one’s constituency.
    • The Government of India releases the annual entitlement in the form of grants-in-aid of ₹ 5 crores in two equal instalments of ₹ 2.5 crores each, directly to the district authority.
    • Nature of funds: Non-lapsable, i.e., they are carried forward to the subsequent years if not utilised in a particular year.
    • 15 percent of MPLADS funds are earmarked for Scheduled Caste areas and 7.5 percent funds to be utilized for Schedule Tribe population.


  • Undermining the Separation of Power doctrine: Scheme co-opts legislators into executive functioning
  • Inconsistent with the Federal spirit:
    • Union Government can make expenditure on the subjects enshrined in Union List as per that of Seventh Schedule of Indian Constitution.
    • It encroaches upon the Local self-government domain that violates the Part IX and IX-A of the Indian constitution.
  • No proper accounting and monitoring system put in place by the government for the works allotted under the scheme.
    • As soon as the Budget grants are sanctioned, the nodal ministry sends the grant to the district head and treats it as an expenditure. After that, accounting or monitoring for it is absent.
  • Inefficiency: Big Gap between the recommendations made by MPs and their implementation by the district administration.
  • Unused Funds: Funds by many MPs remains unutilised even after 5 Years.
  • Laps in Implementation:
    • There are lapses on the supervision front, with the District Authorities failing to inspect the required number of sanctioned works as well as in sending regular monitoring reports.
    • Comptroller and Auditor General(CAG) Observed that Expenditure incurred by the executing agencies are less than the amount booked. Further, they flagged the issue of financial mismanagement as well as artificial inflation of the spent amount.
    • The scheme mandates that as soon as a work is completed, it should be transferred to the user agency for public use.
    • Out of the 15,049 sample works created during 2004-09, handing over was not on record for 98.53 per cent of the works created.
  • Promotion of Patronage Politics: MPLADS provides scope for MPs to utilise the funds allocated via MPLADS as a source of patronage which they can dispense at their will.
  • The National Commission to Review the Working of the Constitution (NCRWC) in 2002 suggested immediate discontinuation of the MPLAD scheme. A similar view was presented by the 2nd ARC Report.


  • Until 2017, nearly 19 lakh projects worth Rs 45,000 crore had been sanctioned under the MPLAD Scheme.
  • Third-party evaluators appointed by the government reported that the creation of good quality assets had a positive impact on the local economy, social fabric and feasible environment.
  • The 2nd ARC’s report on Ethics in Governance took a firm stand against the scheme arguing that it seriously erodes the notion of separation of powers, as the legislator directly becomes the executive.
  • Lok Sabha constituencies in the southern states have not utilized the entire allocation of MPLAD Funds
  • IndiaSpend Report Observations:
    • Even a year after 298 of 542 members in 16th Lok Sabha have not spent a rupee from the ₹5 crores that are set aside annually for them to develop their constituencies.
  • Unspent Funds: As on March 4, 2020, it has been found that a cumulative sum of Rs 5,275.24 crore MPLAD fund remained unspent.

Supreme Court View:

  • The Constitutional validity of MPLADS was challenged on the grounds that this scheme violates the spirit of federalism and distribution of powers between the Union and the States in the Supreme Court of India in 1999, followed by petitions in 2000, 2003, 2004, and 2005.
  • The combined judgment on all these petitions was delivered by the Apex Court on May 6, 2010, with the scheme being held to be constitutional. SC held that:
    • Indian COnstitution does not recognise the strict separation of powers as is done in the USA Constitution.
    • India is a Quasi-Federal state wherein as per Article 282, the Union and the State government, both have the power to provide grants for the public purpose within the meaning of the Constitution. This is done irrespective of whether the subject matter of the purpose falls in the Seventh Schedule of the Indian Constitution.
    • MPLAD comes in the purview of RTI Act so there is provision for transparency.

Way forward

  • The Ministry of Statistics and Programme Implementation has suggested that a single parliamentary committee be formed comprising members of both Houses of Parliament to monitor MPLAD schemes.
  • Social Audit should be made mandatory.
  • MPLAD funds should be made lapsable and return the funds annually to the Ministry for effective utilisation of funds.
  • 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.
  • Implementing agencies could involve the local community in the voluntary supervision of works.
  • 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.
  • A legal obligation should be made to ensure transparency in recommending works by an MP.

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