The Chaos in MPLADS Funding
The Member of Parliament Local Area Development Scheme (MPLADS) is witnessing a pandemonium with the Union government, which is asking some members of Parliament (MPs) to submit proposals, while not releasing funds for works in constituencies of those who are repeatedly sending request letters. Further, the parliamentary standing committee on finance has sharply criticised the ministry of finance (MoF) for releasing Rs2,200 crore under the MPLADS and has asked for this money to be spent within a week! 
In March this year, Rao Inderjit Singh, minister of statistics and programme implementation, told the Rajya Sabha that the Union government had decided to release the pending instalments of 2019-20 under MPLADS on priority basis. On 19 July 2021, MPLADS division in the ministry sent letters to chief secretaries of all states soliciting proposals for the release of pending instalments of FY2019-20.
Mr Rao, the minister, also told the Rajya Sabha that the ministry has received demands and requests from MPs and nodal district authorities for the release of pending instalments due up to 31 March 2020, to resume the ongoing works and clear the committed liabilities under MPLADS. 
However, the reply received under the Right to Information (RTI) Act shows that six MPs from Maharashtra, including a former Cabinet minister in the Union government, sent requests to release the MPLADS fund for pending works for even FY2018-19. 
The RTI reply received by Pune-based Praful Sarda shows that Prakash Javadekar, former minister of information and broadcasting and a senior leader of the Bharatiya Janata Party (BJP), sent a letter to Mr Rao seeking release of Rs2 crore under MPLADS. Interestingly, the letter from Mr Javadekar shows that all the three works sanctioned under MPLADS, for which he was seeking release of funds, were suspended by the ministry of statistics and programme implementation.
Mr Sarda says, "Information sought about MPLADS funds release clearly states that despite several requests from MPs, most of them have not received funds and former cabinet minister Prakash Javadekar's request to release funds has been suspended by the concerned ministry and the minister of state (MoS). This might be the first time in history where the MoS suspended the funds of a cabinet minister and recently Mr Javadekar had to resign from the cabinet as well."
Data published by the ministry of statistics and programme implementation (MoSPI) on its website shows that from Maharashtra 51 MPs (including former MPs) from the Lok Sabha and 12 MPs from the Rajya Sabha are waiting for release of funds under the MPLADS. Many of them, including another cabinet minister Nitin Gadkari, are waiting for fund release for projects sanctioned in FY18-19.
In April 2020, the Union Cabinet decided to suspend MPLADS funds during FY20-21 and FY21-22 in view of the adverse impact of the outbreak of COVID-19 in India. Mr Javadekar, the then Union minister had said, "The consolidated amount of MPLADS funds for two years is about Rs7,900 crore and will go to the Consolidated Fund of India.” 
Coming back to the parliamentary committee, which, in its report submitted last week, observed that the demand for grant by MoSPI under MPLADS was left unfinished midway, despite the sanction letters having been issued and funds for these were withheld, citing the suspension of the scheme.
On 16 March 2021, the department of expenditure (DoE) informed MoSPI about its intent to allot Rs2,200 crore for projects under MPLADS. However, the department of economic affairs (DEA) released the funds only on 22 March 2021 with a condition to spend the funds allotted for eligible projects within FY20-21 itself, so that the amount does not lapse. This means, the DEA wanted MoSPI to spend the released funds in about eight days or before 31 March 2021.
The parliamentary committee stated, "The Committee are unable to comprehend the reason as to why Rs2,200 crore was allotted to MoSPI barely one week before the end of FY20-21… This constitutes a serious lapse in fiscal management with negative consequences for communities across India.”
The MoSPI cleared eligible proposals worth Rs1,107.5 crore, which it received till 31 March 2021, leading to the balance Rs1,092.5 crore lapsing.
The MPLADS is a centrally-sponsored scheme fully funded by the government of India under which funds are released in the form of grants in-aid directly to the district authorities.
Launched in December 1993, MPLADS provides a mechanism for the MPs to recommend works of developmental nature for the creation of durable community assets and for provision of basic facilities including community infrastructure, based on local needs.
During 1994-95 and 1997-98, MPs were entitled to Rs1 crore funding each under MPLADS, which was later increased to Rs2 crore. In FY11-12, the united progressive alliance (UPA) government increased the annual entitlement under MPLADS to Rs5 crore per MP.
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