MARCH 18, 2019

By Naresh Minocha, Consulting Editor

THE Congress Party's campaign seeking dismissal of Union Textiles Minister Smriti Zubin Irani should turn focus on controversies-ridden Members of Parliament Local Area Development Scheme (MPLADS).

The focus should also be extended to similar scheme, Member of Legislative Assembly Local Area Development Scheme (MLALADS), which is funded by State Governments.

Both should be scrapped on fiscal, administrative, ethical and electoral grounds. The two schemes are apt instances of institutionalized corruption & fiscal mismanagement that no political party wants to scrap.

This is inspite of categorical recommendation from National Commission to Review the Working of the Constitution (NCRWC). In its report submitted to Vajpayee Government in April 2002, NCRWC recommended "immediate discontinuance of the MP LAD Scheme as being inconsistent with the spirit of the Constitution in many ways".

Like this august panel of constitutional experts, Comptroller and Auditor General (CAG), Public Accounts Committee (PAC) and Government-commission studies have found numerous flaws in the schemes.

The Supreme Court, in two separate verdicts, has, however, upheld the constitutional validity of the two schemes. Central Information Commission has, on the other hand, called for law to ensure transparency and accountability of MPLADS.

Before elaborating on the logic to trash the two schemes, recollect the Congress Party's demand that set the twitter on fire with trend #SackSmritiIrani on 14 th March 2019.

In its release on Mrs. Irani, the Congress posed: "Will PM Modi show the courage of conviction to sack Union Minister, Smt. Smriti Irani immediately?"

This question has so far remained unanswered by any of the stakeholders - Mrs. Irani, Prime Minister/the Government and BJP.

It is here pertinent to quote BJP's recent internal guide on ‘ handling media and social media '.

The ‘Quick Guidebook' says: "Do not try to defend the indefensible: All parties have some bad elements. If a member of our party is alleged to be doing something reprehensible and there is apparently ample proof against him/ her, do not try to defend such people/ incidents on social media. Silence is the best answer to such posts till the time the clouds settle on the issue and/or you have better evidence".

The question pertains to alleged fraud and irregularities in the projects funded with money sanctioned from her account under Members of Parliament Local Area Development Scheme (MPLADS). The serious allegations listed in Congress release are based on Comptroller and Auditor General (CAG) report on Gujarat numbered 4 of 2018.

Without identifying Mrs. Irani by name, CAG report concluded: "Injudicious awarding of works under MPLADS to a Non-Government Organisation (NGO) without inviting tenders resulted in irregular payment of Rs 5.93 crore including fraudulent payment of Rs 84.53 lakh to the NGO".

One need not go into specific irregularities. This is because it is not the first time CAG has detected wrongdoings including frauds under MPLADS. The broader, core issue is reluctance of the Centre, the States and political class to not draw curtains on the schemes on electoral, ethical, fiscal and administrative grounds.

On 10 th January 2018, Modi Government thus decided to continue MPLADS till the term of the 14 Finance Commission, i.e. 31 st March 2020. A release on Government's decision stated that the Scheme would entail an annual allocation of Rs. 3,950 crore and total allocation of Rs 11,850 crore for 3-year period. Since the scheme's inception in 1993-94 till August 2017, the Centre has sanctioned Rs. 44,929.17 crore for 18,82,180 works/projects under MPLADS.

One can thus assume that Rs 57,000 crores of public money has been spent so far at the discretion of MPs. The annual allocation for each MP has been raised in three phases from Rs. 5.0 lakh in 1993-94 to Rs 5.0 crore in 2011. The allocation for each MLA varies from State to State. It is normally Rs 2 crore/MLA and Rs 4 crore per MLA in Delhi.

The data on total annual allocation for MPLADS and MLALADS for all States is hard to come by. The amount would be huge in any case. It might well be Rs 13,000 crore per year.

Under MPLADS, each MP suggests to the District Collector the works/projects costing Rs.5 Crores per year to be taken up in his/her constituency. The list of physical assets that can be created with these funds is very large ranging from water supply to laptops for Government-aided educational institutions.

If an MP desires, the MPLADS funds can be converged with scheme/projects of Central & State Govt. Similarly, funds from local bodies can be pooled with MPLADS works.

MPLADS' guidelines are so flexible that they enable an MP to recommend up to Rs. one crore/year for works to be executed for NGOs/societies/trusts. Such entities can receive a maximum of Rs. 50 Lakh from MPLADS kitty in their lifetime.

As if this flexibility were not enough, MPs have been seeking more avenues to channel funds from their entitlement. This aspect emerged at an open house discussion (OHD) on MPLADS organized by the Government during January 2019.

At OHD, Harish Dwivedi, MP, suggested that MPLADS should provide for financing of memorials in keeping with the demand from local people in different constituencies. There should also be provision to allocate certain percentage of funds from MPLADS for fire relief works as allowed under MLALADS.

According to summary record of OHD prepared by Ministry of Statistics and Programme Implementation (MoSPI), Farooq Abdullah, MP suggested: "Ministry may explore the feasibility of inclusion of special provisions in the Guidelines with regard to utilization of MPLADS funds for treatment of cancer and cardiac illness; for mass marriage ceremonies, for renovation of burnt homes for persons/families below Poverty Line (BPL)".

The separate domain of elected representative-driven capital expenditure is expanding gradually. It is new a de facto fourth tier of Government as far as development & welfare expenditure is concerned. The existing tiers are Central, State and panchayats / municipal corporations.

The fourth tier of capital expenditure has created difficulty in monitoring expenditure as elected representatives come and go. How does one ensure prevention of defalcation of money by mixing MPLADS expenditure with work investment stream of Central, State or NGO schemes? How does one ensure that there is no duplication of investment on one project?

CAG only does test check of assets created under MPLADS as it did in case of Mrs. Irani-recommended projects in Gujarat. And it is inspection of assets selected under test check which revealed fake certificates for assets not created or created with funds from other entities.

In 2011, CAG in its 3 rd report on MPLADS noted: "Many of the systemic weaknesses affecting the implementation of the MPLADS had been persisting since its inception 17 years ago. The lapses were brought to the notice of the Ministry by the CAG in two earlier performance audit reports (1998 and 2001). Submission of ATNs (Action Taken Notes) on the Report of 2001 after a lapse of eight years (2009) speaks volumes about the monitoring methods".

It recommended that the Government should carefully review and evaluate MPLADS' benefits "for taking a view regarding continued implementation of the Scheme".

In its action taken report on CAG report, MoSPI claimed MPLADS has resulted in creation of good-quality assets. The scheme has been welcomed by local population where works are undertaken.

Would the beneficiaries not welcome the works if the same money is channeled as additional allocation to the States and local Government bodies? Would that not streamline monitoring and accounting of assets?

At present, the nation is clueless about the fate of lakhs of assets created with funds from MPLADS and MLALADS. The God knows how much money has been misused and siphoned off.

It is thus hardly surprising to learn that Central Information Commission (CIC) urged Parliament in September 2018 to create legal framework for MPLADS to improve its transparency and accountability.

CIC did so in its interim order on an appeal filed by an RTI applicant who could not get information on railway works funded by an MP from two ministries.

Interestingly enough, the Supreme Court did not call for such legal framework in two separate verdicts given during different years on MPLADS and MLALADS.

In its judgment delivered during May 2010, the Court upheld the constitutional validity of MPLADS. It also concluded: "The Scheme does not result in an unfair advantage to the sitting Members of Parliament and does not amount to a corrupt practice".

With due respect, this conclusion is difficult to accept if we reckon the fact that an MP gets 25 crore at his disposal to appease voters in his/her constituency through small projects at various locations. He can also discriminate against those localities that are perceived to be strongholds of rival political parties.

This is a definitive, unethical advantage for a sitting MP against other contestants especially the independent ones in the elections.

Should MPs not devote adequate time to discussing policies, projects and schemes in Parliament? Should they not get more time daily in Parliament to raise and discuss problems people face in their constituencies? Should Parliament not sit for more days to clear colossal backlog of legislative work?

It is here apt to bring in NCRWC's contentions against MPLADS. It stated: "Insofar as these schemes involve the legislators in exercise of executive powers, they militate against the demarcation of responsibilities between the legislature and the executive. Also, almost all the items on which the funds under the MP LAD Scheme are to be spent are in the State List and, in fact, many are in the Eleventh and the Twelfth Schedules"

NCRWC added: "The role of a Member of Parliament must undergo some change as a result of Panchayat Raj institutions taking charge of some local matters. The MPLAD Scheme is inconsistent with the spirit of federalism and distribution of powers between the Union and the States. It also treads into the areas of local government institutions".

This concern was also echoed by late Era Sezhiyan, a distinguished parliamentarian and author, in his analysis of MPLADS in Frontline during March 2002.

Mr. Sezhiyan wrote: "The MPLADS has only served the purpose of diverting the attention of the MPs from the failures of planning and administrative performance at all levels, and to confine their attention to some small schemes restricted to individual constituencies".