Uncovering MPLAD Scam: Everything You Need To Know

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  • Post published:January 20, 2024
  • Post category:Reviews

The Members of Parliament Local Area Development Scheme (MPLADS) was launched in 1993 to allow Members of Parliament (MPs) to recommend developmental works in their constituencies. While the scheme aims to fulfill grassroot infrastructure gaps, it has courted several controversies over fund misuse and corruption allegations.

This comprehensive guide examines the MPLAD scam chronologically while analyzing its modus operandi, concerned authorities, political reactions, and reviews from audits. We also assess complaints procedures and explore potential improvements to safeguard MPLADS funds for societal welfare.

A Brief History of MPLADS Scam: Timeline and Overview

Here’s a quick history of major MPLAD scam events:

1993: MPLADS launched by PV Narasimha Rao government, granting ₹5 crore to each MP annually for local infrastructure recommendations.

2005: 11 MPs expelled due to cash-for-query scam revealed through media sting operation. Some sought commissions for passing off projects under MPLADS.

2012: CAG audit revealed procedural and monitoring lapses in MPLADS fund utilization between 2006-2010.

2014: Another CAG report highlighted continous compliance issues between 2010-2013, estimating ₹1180 crore MPLADS irregularities.

2017: Parliamentary Standing Committee expressed concerns over recurring fund misuse, suggesting early audits and IT-based monitoring.

2023: Assam civil servant and forest officials arrested regarding a MPLAD road construction payment scam, accumulating disproportionate assets.

While MPLADS aims to fulfill hyperlocal needs, allegations of misutilization, fraud, fake documentation, and graft continue to mar the scheme’s public perception and intended welfare delivery.

Modus Operandi: How MPLAD Scams Play Out

MPLAD scams typically play out through the following avenues after MPs submit their localization recommendations:

Inflated Costs and Commission Seeking

Construction work prices are falsely inflated during sanctioning to accommodate cuts and kickbacks. Contractors offer MPs and officials a share to process higher amounts. Works remain incomplete or substandard.

Excess Drawals AgainstGhost Beneficiaries

In community-targeted initiatives i.e. skill training, payments are shown favoring fake and non-existent beneficiaries. Colluding stakeholders pocket excess funds.

Violation of Guidelines

Norms regarding expenditure limits, work timeframes, audit compliance are overlooked to siphon money, followed by forged documentation. Substandard quality goes unnoticed.

Proxy Firms and Benami Transactions

MPs register proxy contracting firms to receive MPLAD works, masking conflict of interest. Relatives and associates act as hidden owners (benami) of such entities.

The Key Players and Authorities in MPLAD Scam

MPLAD scams typically feature the following stakeholders and supervisory authorities:

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MPs: As MPLAD work recommenders, MPs directly or indirectly orchestrate most scams

Contractors: Over-invoice and poorly execute sanctioned works as MP-colluded parties

District Authorities: Complicit officials facilitate technical and payment sanctions

State Nodal Agency: Ensures auditor selection, guides district officials for compliance

CAG: Conducts independent program audits to identify potential red flags

MOPSI: Central ministry governing MPLADS through circulars and guidelines

While audits by the CAG periodically detect irregularities, end punitive actions are rarely enforced. With colluding districts and MPs having vested interests, malpractices continue unchecked.

Political Reaction and MPLADS Reviews Post Scam Allegations

The MPLAD scam has elicited mixed reactions from politicians. While some have vouched for its continuance with improved safeguards, others have demanded its complete abolishment.

Arguments Favoring MPLADS

Hyperlocal Development: MPs understand grassroot requirements for localized infrastructure building better than state/district bodies

Planning Contribution: MPs’ involvement enhances participative development

Limited Misuse: As per supporters, only a handful of MPs have misutilized funds out of 800+ members

BJP Consensus: Despite early criticisms from Advani, most BJP MPs now favor MPLADS continuity with adequate audits

Arguments Against MPLADS

Wasteful Expenditure: Critics like ex-Lok Sabha speaker Somnath Chatterjee have argued MPLADS doesn’t yield value commensurate to spent funds

Violates Separation of Power: Blurs lines between legislature and executive by giving infra project sanctioning authority to MPs

Enhances Corruption: Scams worth hundreds of crores indicate MPLADS enables graft without proper oversight

Administrative Burden: Additional duties for state officials to entertain MP demands rather than focusing on main development programs

Clearly, the scheme has drawn equal criticism and support. WhilePosition 1 favored its continuance given welfare potential, Position 2 argued the recurrent corruption outweighs presented advantages.

CAG Audit Reviews and Findings on MPLAD Irregularities

India’s apex auditing body CAG has conducted two key assessments of MPLAD scheme execution between 2006-2013. Both reports underlined significant compliance failures.

2006-2010 Audit Findings

  • Procedural delays in project approvals
  • Fund misappropriation through fake documents up to ₹149.8 crore
  • Works amounting to ₹271.9 crore not completed or operational
  • Substandard quality of ₹9.5 crore worth initiatives

2010-2013 Audit Findings

  • Procedural delays continued
  • ₹1180 crore worth detected irregularities
  • Fake beneficiaries shown for multiple works
  • Non-adherence to costing norms and timeframes
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CAG audits underscore how absence of monitoring facilitates misappropriation despite MPLADS guidelines. They reiterate the need for IT-based tracking and enforcement accountability at nodal centers.

MPLAD Scam Complaints and Concern Redressal

Citizens can raise MPLADS complaints through the following channels in case of delays, denial of services, quality issues or suspected fund misuse:

District Authorities

The Collector and District Magistrate may be approached first regarding local works. Enquiries can also be sent to the District Planning Committee.

MPLADS Website

Public can register grievances directly through the central MPLAD portal. It allows tracking complaint status.

External CVC Portal

Serious graft complaints warrant escalation to the Central Vigilance Commission.one-stop platform for public sector corruption issues.

However, citizens have rarely received meaningful redressals historically. With MPLADS supervision across Central, State and District levels, public find it difficult to pinpoint accountabilities.

Moreover, authorities have lacked the motivation to self-incriminate by unearthing scams involving politicians. Fear of reprisal also prevents contractual employees from whistleblowing.

Suggested Improvements to Make MPLADS More Robust

While MPLADS undoubtedly facilitates micro-level infrastructure advancement, recurrent scams have eroded public faith. Here are 5 reformative measures that can help redeem MPLADS’ welfare agenda:

1. Mandatory IT Workflow Integration

Online management of approvals, fund disbursals linked Aadhaar validated beneficiaries can significantly improve transparency and curb fake documentation.

2. Regular Social Audits

Local community representatives must review works through Jan Bhagidari exercises rather than relying solely on agency inspections.

3. Enhanced Citizens Role

Allow public scrutiny of beneficiary lists, work quality certificates before payment sanctions by district authorities. Create vigilance committees.

4. Time-Bound CBI Probes

Scam cases require swift, legally binding investigation by Central Bureau of Investigation coupled with prosecution of guilty authorities.

5. Revised Nodal Centre Responsibilities

Nodal agencies must conduct internal audits, analytics regarding procedural delays, cost escalations and track recovery of misused funds.

Through these changes, MPLADS can focus more on timely delivery of quality outcomes rather than just financial targets.

Verdict: Does MPLADS Need Abolishment Over Recurrent Scams?

In my assessment, MPLADS merits continuance despite repeated corruption allegations. The welfare generated via creating community assets outweighs the scammed amounts. With over ₹50,000 crore spent till date through MPLADS, malpractices seem restricted at below 5% going by CAG findings.

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However, it becomes imperative that the Centre Ministry strengthens oversight through technology integration, social audits and enhanced nodal accountabilities. Stern actions against erring MPs or officials should get communicated regularly to reinstall public trust. Until transparency improves, the scheme may unfortunately remain under utilized rather than reaching its localized infrastructure building potential.


While the MPLAD scam has resulted in misappropriation of hundreds of crores, the program’s community welfare enhancing promise still holds relevance if pivotal improvements are incorporated.

The Centre needs to review existing allocations to ensure MPs only receive incremental works commensurate to their constituency population rather than an equal Rs 5 crore grant to all lawmakers. Capping sanctions for a 5 year term can prevent a flurry of projects during election years.

Simultaneously, districts must assign dedicated engineering resources to monitor MPLAD works through each phase, rather than taking up supervision as an additional duty. They should inspect sites more frequently with local vigilance committee members to assess construction quality and beneficiary validation.

State nodal departments also need an online dashboard highlighting each district’s MPLADS performance on parameters like fund utilization percentages, work delays, beneficiary complaints. Periodic video conferencing between district officials and nodal authorities should discuss scheme bottlenecks while brainstorming improvements.

For citizens, the government can launch a mobile app allowing geo-tagged uploads of site photos where work quality or material usage seems unsatisfactory. Automatic alerts can get generated to responsible authorities for inspection and redressal.

Overall, while MPLADS requires multiple systemic overhauls before we can eliminate scam risks, abandoning the scheme will amount to forfeiting its “power to the people” advantages. With more prominent digital integration and community participation, the programme can serve its welfare centric vision equitably across India’s varied constituencies.

The success of these reformative initiatives will depend on collective intent and integrity demonstrated by central supervision agencies, district bodies and citizens alike. MPLADS has the potential to bridge local deficits. It now needs honest guardianship more than ever to cement transparency and intended punkah.

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