MPLADS : Why SC Upheld Constitutionality Of Scheme In 2010?

The Members of Parliament Local Area Development Scheme (MPLADS) came into news recently after the Central Government decided to suspend the allocation of funds for the scheme for 2 years in view of the economic impact of COVID-19. The opposition parties have criticized the decision saying that it will have a negative impact on development works at local levels. The Government is seeking to garner around Rs 7,900 crores by suspending the MPLADS for two years.In this backdrop, it is pertinent to examine the legal status of MPLADS and the law governing the same. It will be interesting to note that the constitutional validity of the scheme was challenged before the Supreme Court. The scheme was challenged by Jammu and Kashmir National Panthers Party chief Bhim Singh and an NGO, Common Cause, alleging that in the absence of any guidelines, the funds allocated under the scheme were misused by MPs. In 2010, a Constitution Bench of the Supreme Court upheld the validity of MPLADS in the case Bhim Singh vs Union of India and others.What is MPLADS?The MPLAD scheme was formulated in 1993 to enable MPs to recommend development works in their constituencies "with emphasis on the creation of durable community assets based on the locally felt need".Initially, the Scheme was under the control of the Ministry of Rural Development and Planning. In October, 1994, the scheme was transferred to the Ministry of Statistics & Programme Implementation. The Scheme is not based on any statutory enactment. Instead, it is governed by a set of guidelines which were first issued by the Ministry of Rural Development in February, 1994. After the Scheme was transferred to the Ministry of Statistics and Programme Implementation, revised guidelines were issued from time to time. The latest revision in the guidelines happened in June 2016.In 1993-94, when the Scheme was launched, an amount of Rs.5 lakh per annum per Member of Parliament was allotted. This became rupees one crore per annum from 1994- 95 per MP Constituency. This was stepped up to rupees two crores from 1998-99 and to rupees five crores from 2011-12.Grounds of ChallengeFollowing were the broad grounds of challenge :The MPLAD Scheme is not governed by any statutory law.Allocation of funds from the Consolidated Fund of India cannot be made on the strength of mere executive guidelines. A separate law is needed.Breach of federalism : Union Government can incur expenditure only with respect to matters over which it has subject domain as per Article 73 read with the Seventh Schedule of the Constitution.Fund allocation as per Article 282 can be done only after the identification of 'public purpose'. Under MPLADS, allocation precedes identification of 'public purpose'.The Scheme disturbs the scheme of separation of powers under the Constitution, as MPs are getting involved in executive functions and are coming under executive monitoring with respect to fund utilization.MPLADS encroaches upon the domain of local self governing institutions and thereby violates Part IX and IX-A of the Constitution.The scheme has no checks and balances, and no system of accountability.The scheme creates unfair advantage for sitting MPs, and disturbs free and fair elections.In view of the substantial issues raised, the case was referred to a Constitution Bench.On May 6, 2010 a 5-judge bench comprising the then CJ K G Balakrishnan, Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal delivered the judgment, upholding the vires of the scheme. Justice Sathasivam authored the judgment on behalf of the bench.MPLADS governed by law - The Appropriation Act.The petitioners referred to Article 266(3) of the Constitution which said : "No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution." They also referred to Article 114(3), which said :"Subject to the provisions of Art.115 and Art.116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article." Based on these, they argued that no funds could be allocated from the Consolidated Fund of India in the absence of a separate, specific law.The Constitution Bench of the SC held that the law governing the MPLADS scheme is the Appropriation Act passed by the Parliament every Financial Year to draw funds from the Consolidated Fund of India in terms of Article 114(3) read with Article 266(3) of the Constitution.The Court observed :"if Union Government intends to spend money for public purpose and for implementing various welfare schemes, the same are permitted by presenting an Appropriation Bill which is a Money Bill and by laying the same before the Houses of Parliament and after getting the approval of the Parliament, Lok Sabha, in particular, it becomes law and there cannot be any impediment in implementing the...

MPLADS : Why SC Upheld Constitutionality Of Scheme In 2010?

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MPLADS : Why SC Upheld Constitutionality Of Scheme In 2010?

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