Centre not to release pending funds for MPLADS

After suspending MPLADS for next two years, the Central Government has now further tightened the scheme by deciding not to release further funds for sanctioned work in 2019-20, putting the fate of several ongoing projects in trouble.

Also, MPs who have allocated money for COVID-19-related activities in 2020-21 fiscal will have to find money for this from the funds already available and which lawmakers feel will further put stress on projects they had undertaken early in the previous fiscal.

The government, earlier this week, had announced suspension of the MP Local Area Development Scheme (MPLADS) – Rs five crore per year available for each MP for carrying out local area development – for next two fiscals that could save an expenditure of Rs 79,000 crore to help resource-crunched Centre to take up COVID-19 activities. This had invited criticism from a large section of MPs.

According to a circular issued on Wednesday, the Centre has now further tightened the scheme by deciding that there will be "no further release of instalments" of MPLADS for 2020-21 and 2021-22 into the accounts of nodal district authorities. Several MPs claimed the government is yet to release the funds for 2019-20 and now they see their projects in trouble.

The circular said the projects are sanctioned and awarded by district authorities under MPLADS and they will have to complete it "within the existing available funds", as "no more funds will be released for these works" in the two fiscals. The MPs are allowed to recommend change in priority of their recommendations.

On MPs' pledge to COVID-19 related purchases and projects, the circular said they could carry out those but for this, no new funds will be released. Expenditure for this will have to be met from the already available funds with the district authorities by "re-prioritising or cancelling the earlier recommended work".

"What happens to the work we have already commissioned earlier? Some of this may not be completed. Several local projects will be stopped. Some projects could take more than a year to complete. This is an ill-thought out circular," CPI(M)'s Rajya Sabha MP KK Ragesh told DH.

Another senior MP said he has already committed Rs 1.35 crore for purchasing Personal Protection Equipment and ventilators among others for which an order has been placed. "We will have to pay when these are delivered. The government has not released Rs five crore available for 2019-20. At present, the district authorities have Rs five crore allocated in Rs 2018-19 for which work has been allocated. Now, some of those projects will face trouble as money has to be paid for COVID-19 related purchases from available funds," he said.

MPs alleged that the Centre does not have a holistic idea about the emerging situation, as the pointed out that within two weeks of allowing lawmakers to use MPLADS for COVID-19 purchases, it has altogether suspended the scheme for two years.

Sources said the government is also planning to direct district administrations not to give administrative sanction for any new project whose proposals it had received in the previous fiscal. No official order has been issued in this regard so far.

As per the procedure, the district administration gives administration sanction to projects recommended by MPs if they follow the guidelines issued for MPLADS project. Once administrative sanction is cleared, the project has to get technical sanction which will culminate in tender and allocation of work.

MPs are also concerned that the onus of completing projects and making the payments may land on state governments’ shoulders in case of non-availability of funds.

"Many times, work on certain projects start even before the money is transferred to district authorities. Now, those who have taken the contract for the work will have to be paid their dues once they submit the bills. If the district authorities do not have money to pay and if the contractor takes them to court, the state will have to end up paying the money. It will be further burden on states, which are facing resource crunch because of the COVID-19 situation," an MP said.