MLALAD fund hike in Delhi raises upcoming Assembly elections pitch

AAP govt increases the amount to Rs 15 crore, the highest in India, sparking Opposition criticism over potential misuse ahead of polls

With the upcoming Assembly elections just four months away, the Delhi Cabinet on Thursday increased the MLA Local Area Development (MLALAD) fund from Rs 10 crore, already the highest in the country, to Rs 15 crore per year for each of its 70 MLAs.

With a Rs 1,050 crore budgetary allocation, Delhi’s spend on its MLALAD will be the fourth most in the country, surpassing Rajasthan, which allocates Rs 5 crore each to its 200 legislators, totaling Rs 1,000 crore each year. Uttar Pradesh, with Rs 5 crore each for its 403 MLAs and 100 Legislative Council Members (MLCs) under MLALAD, has an annual allocation of Rs 2,515 crore, followed by Maharashtra’s Rs 1,830 crore with Rs 5 crore each for its 288 MLAs and 78 MLCs, and Bihar’s Rs 4 crore each for 243 MLAs and 75 MLCs (Rs 1,272 crore).

The Delhi government introduced its MLALAD fund in 1994-95 with an allocation of Rs 1 crore per MLA per year. It was modelled on the lines of the Member of Parliament Local Area Development Scheme (MPLADS), which then Prime Minister P V Narasimha Rao announced in Parliament on December 23, 1993. The scheme’s objective was to enable each MP to recommend development works with an “emphasis on the creation of durable community assets based on the locally felt needs of the people”. Currently, MPLADS allocation for each MP is Rs 5 crore per annum.

Over time, Delhi’s MLALAD fund has been increased to Rs 1.40 crore in 1999-2000, Rs 1.90 crore, Rs 2 crore in 2004-05, and Rs 4 crore in 2011-12. In 2018-19, it reached Rs 10 crore, the highest in the country, and has now been increased to Rs 15 crore. In addition to the MLALAD fund, Delhi also has a Chief Minister's Local Area Development (CMLAD) fund with a Rs 300 crore allocation.

Under the MLALAD fund, Delhi’s 70 legislators can ask district officials to take up development works, including installing cement or stainless steel benches in public parks, including housing societies, public gyms, installing closed-circuit televisions in marketplaces, installing the Indian national flag in public places, and purchasing diesel generators for village chaupals.

While Delhi has the largest MLALAD fund, Tripura’s is one of the lowest at Rs 50 lakh, with plans to increase it to Rs 75 lakh. Three states — Haryana, Punjab, and Sikkim — do not have MLALAD funds. Haryana legislators earlier had a Rs 5 crore fund each, which was scrapped in 2019. In Punjab, Chief Minister Bhagwant Mann has proposed a Rs 10 crore fund, but the state’s Rs 3.5 trillion debt has delayed the scheme’s implementation.

In Delhi, following a complaint by a Congress leader alleging non-utilisation of the MLALAD, the Lieutenant Governor (LG) ordered an inquiry in August. The Opposition Bharatiya Janata Party (BJP) has alleged that the fund hike was “more likely to be misused” by the ruling Aam Aadmi Party (AAP) legislators. The AAP has blamed the LG and his “favourite officers” for the lack of civic works in Delhi.

These schemes have long faced criticism. The 2007 Ethics in Governance report by the Second Administrative Reforms Commission, chaired by M Veerappa Moily, recommended abolishing MPLADS and MLALAD schemes. It noted that these schemes “seriously erode the notion of separation of powers as the legislator directly becomes the executive”, “infringed on the rights of the local governments”, but the “most serious” objection is “the conflict of interest that arises when legislators take up executive roles”. The report rejected claims that legislators don’t directly handle funds, arguing that neither ministers nor officials handle public money, except treasury officials. “Making day-to-day decisions on expenditure after the legislature has approved the Budget, is a key executive function,” the report said.

In its reports, the Comptroller and Auditor General has pointed out irregularities in implementing these schemes, including discrepancies between amount booked and actual expenditure by executing agencies, with utilisation ranging from 49 to 90 per cent of the booked amount. The CAG found wide variations in the quantities executed compared to those specified in 137 of the 707 works it reviewed, with discrepancies ranging from 16 to 2312 per cent. It also noted a lack of accountability in terms of the quality and quantity of work completed against specifications.

According to Jagdeep Chhokar of the Association of Democratic Reforms, there is also the widespread belief that these funds are often used to appease opinion-makers and favourite contractors.

However, the Supreme Court of India upheld the constitutional validity of MPLADS in a 2010 ruling that addressed multiple petitions challenging the scheme.

A Rajya Sabha committee, which was set up in 1998 to monitor the implementation of MPLADS, has not presented a report since 2014. A similar committee for the Lok Sabha that was set up in 1999 has no meeting records for the tenure of the 17th Lok Sabha (2019-24).

CRUNCHING THE NUMBERS
 

Annual allocation for MLALAD in some of the states

> UP: Rs 2,515 cr

Rs 5 crore each for 403 MLAs and 100 MLCs

> Maharashtra: Rs 1,830 cr

Rs 5 crore each for 288 MLAs and 78 MLCs

> Bihar: Rs 1,272 cr

Rs 4 crore each for 243 MLAs and 75 MLCs

> Delhi (proposed): Rs 1,050 cr

Rs 15 crore each for 70 MLAs

> Rajasthan: Rs 1,000 cr

Rs 5 crore each for 200 MLAs
 

> Telangana: Rs 795 cr

Rs 5 crore each for 119 MLAs and 40 MLCs

> Tamil Nadu: Rs 702 cr

Rs 3 crore each for 232 MLAs

> Kerala: Rs 700 cr

Rs 5 crore each for 140 MLAs

> Madhya Pradesh: Rs 690 cr

Rs 3 crore each for 230 MLAs

> Karnataka: Rs 588 cr

Rs 2 crore each for 224 MLAs

and 75 MLCs

> Odisha: Rs 441 cr

Rs 3 crore each for 147 MLAs