Funds allotted for ongoing MPLADS projects lapse

Context:

Virtually half of a belated Rs. 2,200 crore allotted for completing ongoing MPLADS projects in 2020-21 simply lapsed.

Relevance:

GS-II: Social Justice and Governance (Central Sector Schemes, Government Policies & Interventions)

Dimensions of the Article:

1. Members of Parliament Local Area Development (MP-LAD)
2. Features of MPLADS scheme
3. Release of Funds under MPLADS
4. About the recent issue regarding lapse of funds

Members of Parliament Local Area Development (MP-LAD)

• Members of Parliament Local Area Development Scheme (MPLADS) is an ongoing Central Sector Scheme which was launched in 1993-94.
• The Scheme enables the Members of Parliament to recommend works for creation of durable community assets based on locally felt needs to be taken up in their constituencies in the area of national priorities namely drinking water, education, public health, sanitation, roads etc.
• Nodal Ministry: The Ministry of Statistics and Programme Implementation has been responsible for the policy formulation, release of funds and prescribing monitoring mechanism for implementation of the Scheme.

Features of MPLADS scheme

The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.

• MPs are to recommend every year, works costing at least 15 per cent of the MPLADS entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by S.T. population.
• In order to encourage trusts and societies for the betterment of tribal people, a ceiling of Rs. 75 lakhs is stipulated for building assets by trusts and societies subject to conditions prescribed in the scheme guidelines.
• Lok Sabha Members can recommend works within their Constituencies and Elected Members of Rajya Sabha can recommend works within the State of Election (with select exceptions).
• Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
• All works to meet locally felt infrastructure and development needs, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS as prescribed in the scheme guidelines.
• Expenditure on specified items of non-durable nature are also permitted as listed in the guidelines.

Release of Funds under MPLADS

• Funds are released in the form of grants in-aid directly to the district authorities.
• The funds released under the scheme are non-lapsable.
• The liability of funds not released in a particular year is carried forward to the subsequent years, subject to eligibility.

Execution of works:

• The MPs have a recommendatory role under the scheme. They recommend their choice of works to the concerned district authorities who implement these works by following the established procedures of the concerned state government.
• The district authority is empowered to examine the eligibility of works sanction funds and select the implementing agencies, prioritise works, supervise overall execution, and monitor the scheme at the ground level.

About the recent issue regarding lapse of funds

• The Finance Ministry granted “barely a week” to the Ministry of Statistics and Programme Implementation (MoSPI) to release the funds because of which Half of the Rs. 2,200 crore allotted for completing ongoing MPLADS projects in 2020-21 simply lapsed virtually – inviting the ire of the Standing Committee on Finance.
• The resultant funding crunch would have hit several local area development projects under implementation across the country, especially in the five States that went to polls this year as no funds were released for these States and constituencies citing the Model Code of Conduct.
• Spending under the Members of Parliament Local Area Development Scheme (MPLADS) had already halved before the government suspended the scheme for two years in April 2020 and diverted the funds for managing the COVID-19 pandemic.
• On March 2021, an SCF report on the Statistics Ministry’s demands for grants pointed out that many MPLADS projects that began earlier were “left unfinished midway despite the sanction letters being issued and funds for the same were withheld”, citing the suspension of the scheme.
• The Finance Ministry has also asked the Statistics Ministry to further tighten the scheme’s guidelines by September 2021, so that “if a work sanctioned by an MP is not used for five years, it will automatically lapse even if there is a committed liability for the work to be completed”. Currently, funds released to district authorities under MPLADS is not lapsable, while funds not released by the government in a particular year are carried forward.

-Source: The Hindu