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It is time for some financial discipline

Given the economic uncertainty, funds for the Member of Parliament Local Area Development Scheme must be reviewed.

india Updated: Sep 17, 2013 23:24 IST

With the economy in bad shape, is it not time to question all public expenditure and cut down on wasteful expenditure? Many agree that at a time like this the Member of Parliament Local Area Development Scheme (MPLADS) should be reviewed and scaled down, if not shelved altogether.

Critics say the MPLADS decentralises corruption, giving lawmakers the scope to make a quick buck. But MPs say it ensures they can ‘give’ something tangible to their constituents. The MPLADS has seen a five-fold increase in its corpus and the Supreme Court has given its approval to it. But with more than Rs 4,000 crore spent each year it is time to examine whether it serves the purpose it is meant to.

The Comptroller and Auditor General and government-sponsored independent surveys, after assessing the scheme, have expressed concern over the lack of supervision at the district level and violation of guidelines. The CAG’s objections and those raised by Era Sezhiyan and JM Lyngdoh and the available evidence about misuse of the scheme strengthens the argument that it is time to enforce stringent oversight and scale down the corpus sharply.

A NABCONS (NABARD Consultancy Services) survey has shown that in many cases MPs identify implementing agencies (not permitted by the MPLADS guidelines). In five districts the auditors found that over 25% of the works sanctioned were executed by private agencies. Strangely MPs recommended works for NGOs, clubs and educational institutions and the beneficiary institutions were themselves appointed agencies to implement the project. The CAG also found that contracts were awarded without adopting standard tendering processes.

Misappropriation of funds has also come to light. School classrooms that were ‘constructed’ by village education committees were nowhere to be found. In Jharkhand, a company took an advance of `8 lakh for installing solar water pumps and vanished. In Bihar, officials of the MGNREGS were duping the government by claiming MPLADS funds for existing roads.

In Sikkim, funds from this scheme were used to construct anti-erosion bunds and walls to protect the private property of the MP and his relatives. The biggest area of misuse was allocation of these funds to trusts and societies, often controlled by the MPs themselves.

In 10 states, the CAG found that funds in excess of the prescribed ceiling per society or trust had been released. In seven states, auditors found that 145 ineligible societies and trusts were given funds. The accounts are not audited regularly in 40 districts.

This is not to say all MPs misuse the funds. In West Bengal’s Barasat constituency Trinamool Congress MP Kakoli Ghosh Dastidar has broken all records of MPLADS utilisation by not only using the entire `19 crore allotted to her in five years but also utilising nearly `2 crore of funds left over by her predecessor. Ghosh Dastidar, a doctor by profession, says some MPs would go for one big project because that could ensure better kickbacks but if MPs are serious about a second term, they would do what she did — make best use of the MPLADS and do “something for all localities”.

But since Dastidar is an exception rather than the rule, it is time to impose stringent and continuous oversight and link the release of funds to appropriate utilisation. There is also an argument that spreading the benefits over a wide area, like Dastidar has done, does not support the cause of comprehensive development though they make for sound politics. That needs to be considered as well when fresh guidelines for oversight are worked out.

Subir Bhaumik is a senior journalist and author
The views expressed by the author are personal