MPs allowed to spend one-fifth of MPLAD allocation on societies, trust work

The government is planning to make some changes in Member of Parliament Local Area Development (MPLAD) scheme and allow parliamentarians to spend almost one-fifth of their annual allocation on works of societies and trusts.

Earlier, this ceiling was only Rs 25 lakh. However, there was a growing clutter among MPs to enhance this ceiling as government had raised the allocation under MPLAD to Rs 5 crore from the earlier Rs 2 crore per year.

The enhanced allocation for societies and trusts comes with a rider that works of more than Rs 50 lakh cannot recommended during the lifetime of a single society or a trust. In other words, once a trust or a society has been granted Rs 50 lakhs, no supplementary allocation could be made to it.

Under the MPLAD scheme, a sum of Rs 5 crore is released to every Member of Parliament each year to recommend development work in their constituencies particularly for creation of durable community assets. The fund is released in two installments.

The first installment of Rs 2.5 crore is released immediately at the time of constitution of the Lok Sabha or election of a Rajya Sabha member.

In the remaining years, the first installment (of Rs 2.5 crore) is released subject to the furnishing of a provisional completion certificate.

In other words, if any Member of Parliament has not fully utilised his first installment or has not furnished utilisation certificate covering at least 80% expenditure of the first installment of the previous year, his next installment is withheld.

Lok Sabha MPs are free to recommend any works within their constituencies, while those in Rajya Sabha can do so within the state from which they are elected.

As on date, works costing around 3,200-3,300 crore are in progress out of total budget of around Rs 4,000 crore every year. One reason for the less sum spent than entitlement is lack of coordination between MPs and their local administration.

The government has taken several new initiatives and relaxed the rules to allow MPs freely spend the funds allocated to them under MPLAD.