MPLADS Fund : Opportunity Cost of COVID -19

On 6th of April, the government of India decided to suspend the MPLADS fund for a period of two years till 2022. The amount earmarked for this will go to the consolidated fund of India and will be used for purchase of equipments for government hospitals and dispensaries, medical testing and screening of patients and also setting up other related facilities.

Members of Parliament Local Area Development Scheme (MPLADS) is a scheme formulated by Government of India on 23 December 1993 that enables the members of parliaments (MP) to recommend developmental work in their constituencies with an emphasis on creating durable community assets based on locally felt needs. So suspension of this fund will mean that the fund will be diverted from other development work for the relief from this pandemic. Let us examine what are the different type of works undertaken based on funds sanctioned for this scheme.

Data Source : https://www.mplads.gov.in/mplads/Default.aspx

There has been a total spending of 54102.25 crores from 2004-05 to 2019-20. Over 70% of this is from the Lok Sabha MPs funds. The last financial year ( 2019-20) saw a spending of 3414.02 crore for MPLADS. Let us see how this has been spent in different development activities for the financial year 2019-20.

Data Source : https://www.mplads.gov.in/mplads/Default.aspx

Over 10% of the total funds spend for MPLADS in 2019-20 went to the building and repair of railways, roads, pathways and bridges. Other public facilities, education, drinking water facility, electricity facility and health and sanitation are the other areas where size able amount of funds were sanctioned. A total of 90926 projects were undertaken across the country on various social sector and infrastructural development projects. All these projects lead to a lot of generation of work and many people were employed in various activities. The fund sanctioned for lok sabha MPs were used for their constituencies and for Rajya Sabha MPs it was spent on projects in the state from which they were elected.

Among the states the highest amount was sanctioned for Tamil Nadu followed by West Bengal, Uttar Pradesh, Punjab and Maharashtra. In Rajasthan there were over 10,000 sanctioned work all across the year. Every state had projects based on the need in the particular area. Maharashtra as we all know has huge problem on water availability and faces drought over the years. A size able amount of funds sanctioned for Maharashtra went for irrigation projects. Maharashtra had the third highest amount sanctioned among all the states for which funds were allocated for irrigation projects.

Data Source : https://www.mplads.gov.in/mplads/Default.aspx

Thus it can be seen host of projects in social sector and infrastructural development were undertaken using the MPLADS funds all across the country. This not only solved the needs of different states, it also generated good employment opportunities for semi skilled and unskilled workers. Now with the diversion of this fund for COVID-19 relief fund for a period of two years, means that all this works in different aspects will not happen. This will not only lead to loss of employment but also will mean that a lot of work in different social sector and infrastructural projects will not be undertaken and this will definitely going to have an impact to the overall growth and development of the country. Yes, it is extremely essential to spend funds on providing necessary infrastructure in order to handle covid -19 pandemic, however this comes with an opportunity cost of so many development works not happening in the country for a period of two years.

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