The government has bowed to the might of Members of Parliament by allowing them to allocate Rs 1 crore (or 20 %) of their annual local area development (MPLAD) to trust and societies of their choice despite evidence suggesting corruption in similar practice adopted in past.
The Ministry of Programme Implementation and Statistics, mandated to execute works under MPLAD scheme, had imposed a restriction in March this year that a MP can allocate works worth Rs. 25 lakh in registered societies and trusts in their lifetime, evoking strong reaction from 115 MPs cutting across political spectrum.
"The only restriction should be that proper accounts are kept of the expenditure and the work being done is of high quality," said a letter written by BSP MP Vijay Bahadur Singh that bears signatures of 115 MPs in a reaction to the ministry's decision.
The letter was also signed by Samajwadi chief Mulayam Singh Yadav, PL Punia of Congress, Supriya Sule of NCP, Shatabdi Roy of Trinamool Congress, A Owaisi of All India Majlis-e-Ittehadul Muslimeen, Rajeev Ranjan Singh of Janata Dal (United) and Francisco Sardinha, who also presides in Lok Sabha in absence of speaker and deputy speaker, among others. "MPs are highly responsible people and their discretion should be trusted," Singh said.
The MPs even threatened to forgo their fund if they were not allowed to utilize the funds as per their choice saying they were not government employees who are bound by rules.
Hit by the rebellion, the ministry changed the MPLAD rule earlier this month and allowed MPs to spend up to Rs. one crore every year for works even in unregistered trusts and societies.
The earlier life-time restriction for MPs had been replaced by a restriction that a society or a trust would not be able to seek more than Rs. 50 lakh from MPLAD in its life-time. But, it does not prevent them to form new trusts or societies and keep on getting public money from the MP.
"This is gross misuse of public money and will lead to misappropriation of funds," said Jagdeep S Chhokar, founder member of Association for Democratic Reforms, a civil society watchdog on MPs. "I believe that whole of MPLAD scheme is to make money and is unconstitutional," he added.
A Central government agency Nabcons in 2009 found out that there was a clear bias in allocating MPLAD fund to certain trusts and societies in Surat, Gujarat.
The report also said that in many areas there was no record of how the money allocated to trusts and societies was utilized, raising suspicion of corruption.
"The allocated work was being done by contractors indicated by MPs in violation of MPLAD rules," said another report of Nabcons.
A government official did not rule out the possibility of misuse but said the onus of maintaining sanctity of the rules was with the district administration while hinting at pressure to make the change.
The MPs, however, say they use the fund for betterment of society as per local needs.