50% funds allotted for ongoing MPLADS projects lapse

Last Updated06/08/2021

The Standing Committee on Finance has found that virtually half of a belated ₹2,200 crore allotted for completing ongoing MPLADS projects in 2020-21 simply lapsed.
The resultant funding crunch would have hit several local area development projects under implementation across the country,
The Finance Ministry has asked the Statistics Ministry to 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”.

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 2021 and diverted the funds for managing the COVID-19 pandemic.
The panel had sought the release of funds for these projects so that MPs could fulfill their promises to the public.
The Department of Expenditure (DoE) conveyed its intent to allot Rs 2,200 crores for such projects to the Statistics Ministry.
The allotment of funds by the Department of Economic Affairs (DEA) took place in March, with the condition that the funds must be spent or allotted further for eligible projects “within the financial year 2020-21 itself so that the amount has not lapsed”.
From Rs 5,012 crores spent during 2018-19, expenditure of just Rs 2,491.45 crores were taken up under the scheme in 2019-20.

MPLADS is an Ongoing Central Sector Scheme which was launched in 1993-94.
The Scheme enables the Members of Parliament to recommend works for the 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.
The MPs then were entitled to recommend works to the tune of Rs 1 crore annually between 1994-95 and 1997-98, after which the annual entitlement was enhanced to Rs 2 crore.
The UPA government in 2011-12 raised the annual entitlement to Rs 5 crore per MP.
MPs can recommend every year at least 15 percent of the MPLADS entitlement for the year for SC inhabited areas and at least 7.5 percent of the entitlement for the year for ST inhabited areas.
To implement their plans in an area, MPs have to recommend them to the District Authority of the respective Nodal District.
The District Authorities then identify Implementing Agencies that execute the projects.
MPLADS guidelines state that the funds released to the District Authority are non-lapsable.