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Bihar became the first state to scrap the MLA Local Area Development Fund scheme (MLALAD). According to news reports, Nitish Kumar, Bihar’s Chief Minister, is planning to replace it with the CM Area Development Programme, which would be implemented at the District level. The schemes would be selected by a district selection committee headed by the minister-in-charge and MLAs and MLCs of that district as members. The implementation shall rest with a body of engineers, headed by Engineer-in-chief. The district magistrates would only monitor implementation and contractors would be chosen through open tendering in which a representative of the Comptroller and Auditor General of India (CAG) would be present. The state government would allocate funds as per requirement. The MPLAD and MLALAD scheme was introduced in December 1993 by former Prime Minister, P.V. Narasimha Rao to enable legislators to execute small works of a local nature to meet the urgent needs of their constituents. Under the scheme, each legislator may identify projects and sanction upto Rs 2 crore per year for public works in their constituencies. The scheme was mooted after MPs demanded that they should be able to recommend certain development projects in their constituencies. The projects include assets building such as drinking water facilities, primary education, public health sanitation and roads. The initial amount allocated was Rs 5 lakh per year to each MP. It has however not been smooth sailing for the scheme. Besides the many implementation lapses (as pointed out by the Standing Committee on Finance in 1998-1199, the CAG and the Planning Commission), the constitutionality of the scheme has been questioned by various scholars and experts. In 2002, the National Commission to Review the Working of the Constitution recommended immediate discontinuation of the MPLAD scheme on the ground that it was inconsistent with the spirit of federalism and distribution of powers between the centre and the state. Former MP, Era Sezhiyan in a booklet titled ‘MPLADS – Concept, Confusion and Contradictions’ also opposed the scheme and recommended that it be scrapped since it ran contrary to the Constitutional provisions which envisaged separate roles for the Executive and Legislature. However, the Committee on MPLADS in its 13th Report and its 15th Report stated that there was nothing wrong with the scheme per se except some procedural infirmities and recommended among other things a change of nomenclature to the Scheme for Local Area Development. The debate continued with the 2nd Administrative Reforms Commission’s report on “Ethics in Governance” taking a firm stand against the scheme arguing that it seriously erodes the notion of separation of powers, as the legislator directly becomes the executive. However, in response to a Writ Petition that challenged the constitutionality of the MPLAD scheme as ultra vires of the Constitution of India, in May 2010, a five-judge bench of the Supreme Court ruled that there was no violation of the concept of separation of powers because the role of an MP in this case is recommendatory and the actual work is carried out by the Panchayats and Municipalities which belong to the executive organ. There are checks and balances in place through the guidelines which have to be adhered to and the fact that each MP is ultimately responsible to the Parliament. Meanwhile, some MPs are pushing for hiking the amount allocated under the scheme to Rs 5 crore. However, no decision has been reached yet. The Ministry of Statistics and Programme Implementation has suggested that a single parliamentary committee be formed comprising of members of both Houses of Parliament to monitor MPLAD schemes. While the question of constitutionality of the MPLAD scheme may have been put to rest by the Supreme Court ruling, other issues related to implementation of the scheme still remain. Unless problems such as poor utilisation of funds, irregular sanction of works, delay in completion of works are tackled in an efficient manner, the efficacy of the scheme will remain in doubt.
On March 14, 2022 Rajya Sabha discussed the working of the Ministry of Development of North Eastern Region (DoNER). During the discussion, several issues around budgetary allocation, implementation of schemes and connectivity with the North Eastern Region were discussed. The Ministry of DoNER is responsible for matters relating to the planning, execution and monitoring of development schemes and projects in the North Eastern Region. In this blog post, we analyse the 2022-23 budgetary allocations for the Ministry and discuss related issues.
A new scheme named PM-DevINE announced to boost infrastructure and social development
In 2022-23, the Ministry has seen a 5% increase in allocation from the revised estimates of 2021-22. The Ministry has been allocated Rs 2,800 crore which will be used for various development schemes, such as the North East Special Infrastructure Development Scheme and North East Road Sector Development Scheme. A scheme-wise break-up of the budget allocation for the Ministry is given below in Table 1.
One of the key highlights of the Finance Minister’s Budget Speech was the announcement of a new scheme named the Prime Minister’s Development Initiative for North East (PM-DevINE). It will be implemented through the North East Council (nodal agency for the economic and social development of the North Eastern Region). PM-DevINE will fund infrastructure and social development projects in areas such as road connectivity, health, and agriculture. The scheme will not replace or subsume existing central sector or centrally sponsored schemes. The Scheme will be given an initial allocation of Rs 1,500 crore.
Table 1: Break-up of allocation to the Ministry of DoNER (in Rs crore)
|
Major Heads |
2020-21 Actuals |
2021-22 BE |
2021-22 RE |
2022-23 BE |
% change from 2021-22 RE to 2022-23 BE |
|
North East Special Infrastructure Development Scheme |
446 |
675 |
674 |
1,419 |
111% |
|
Schemes of North East Council |
567 |
585 |
585 |
702 |
20% |
|
North East Road Sector Development Scheme |
416 |
696 |
674 |
496 |
-26% |
|
Central pool of resources for North East and Sikkim |
342 |
581 |
581 |
- |
- |
|
Others |
270 |
322 |
344 |
241 |
-30% |
|
Total |
1,854 |
2,658 |
2,658 |
2,800 |
5% |
Note: BE – Budget Estimate; RE – Revised Estimate; Schemes for North East Council includes Special Development Projects.
Sources: Demand No. 23 of Union Budget Documents 2022-23; PRS.
Allocation towards capital outlay less than demand
The Standing Committee on Home Affairs (2022) noted that the amount allocated at the budget stage in 2022-23 (Rs 660 crore) was 17% less than the demand by the Ministry (Rs 794 crore). Capital expenditure includes capital outlay which leads to the creation of assets such as schools, hospitals, and roads and bridges. The Committee observed that this may severely affect the implementation of several projects and schemes that require capital outlay. It recommended the Ministry to take up this matter with the Finance Ministry and demand additional assistance at the revised stage of the 2022-23 financial year.
Underutilisation of funds over the years
Since 2011-12 (barring 2016-17), the Ministry has not been able to utilise the funds allocated to it at the budgeted stage (See Figure 1). For instance, in 2020-21, fund utilisation in case of the North East Road Sector Development Scheme was 52%, whereas only 34% of funds were utilised under the North East Special Infrastructure Development Scheme (for infrastructure projects relating to water supply, power, connectivity, social infrastructure). Key reasons for underspending highlighted by the Ministry include late receipt of project proposals and non-receipt of utilisation certificates from state governments.
Figure 1: Underutilisation of funds by the Ministry since 2011-12
Note: Revised Estimate has been used as the Actual Expenditure for 2021-22.
Sources: Union Budget Documents (2011-12 to 2022-23); PRS.
Delay in project completion
The Ministry implements several schemes for infrastructural projects such as roads and bridges. The progress of the certain schemes has been inadequate. The Standing Committee (2022) observed that the physical progress of many road sector projects under the North East Road Sector Development Scheme is either at zero or in single digit percent in spite of release of the amount for the project. Similarly, projects under the Karbi Anglong Autonomous Territorial Council (autonomous district council in Assam) and Social and Infrastructure Development Fund (construction of roads, bridges, and construction of schools and water supply projects in the North Eastern Region) have seen inadequate progress.
Need to address declining forest cover
The Standing Committee (2021) has also recommended the Ministry of DoNER to work towards preserving forest cover. The Committee took note of the declining forest cover in the North East India. As per the India State of Forest Report (2021), states showing major loss of forest cover from 2019 to 2021 are: (i) Arunachal Pradesh (loss of 257 sq km of forest cover), (ii) Manipur (249 sq km), (iii) Nagaland (235 sq km), (iv) Mizoram (186 sq km), and (v) Meghalaya (73 sq km). The loss of forest cover may be attributed to shifting cultivation, cutting down of trees, natural calamities, anthropogenic (environmental pollution) pressure, and developmental activities. The Committee recommended that various measures to protect the forest and environment must be given priority and should implemented within the stipulated timeline. It also suggested the Ministry to: (i) carry out regular plantation drives to increase forest cover/density, and (ii) accord priority towards the ultimate goal of preserving and protecting the forests under various centrally sponsored initiatives.
Key issues raised by Members during discussion in Rajya Sabha
The discussion on the working of the Ministry of DoNER took place in Rajya Sabha on March 14, 2022. One of the issues highlighted by members was about the Ministry not having its own line Department. This leads to the Ministry being dependent on the administrative strength of the states for implementation of projects. Another issue highlighted by several members was the lack of connectivity of the region through railways and road networks which hampers the economic growth of region. The DoNER Minister in his response to the House assured the members that the central government is making continuous efforts towards improving connectivity to the North East region through roads, railways, waterways, and telecommunication.
Allocation by Union Ministries to the North East
Union Ministries allocate 10% of their budget allocation for the North East (See Figure 2 for fund allocation and utilisation). The Ministry of DoNER is the nodal Ministry that monitors and keeps track of the allocation done by various Ministries. In 2022-23, Rs 76,040 crore has been allocated by all the Ministries for the North Eastern region. The allocation has increased by 11% from the revised estimate of 2021-22 (Rs 68,440 crore). In 2019-20 and 2021-21 the actual expenditure towards North Eastern areas was lower than budget estimates by 18% and 19% respectively.
Figure 2: Budgetary allocation by all Union Ministries for the North East (amount in Rs crore)
Source: Report No. 239: Demand for Grants (2022-23) of Ministry of Development of North Eastern Region, Standing Committee on Home Affairs; PRS.
