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No records of Rs20,000 crore spent from MP LADS in public domain

Over Rs20,000 crore from the MP LADS were disbursed since a decade, but there are no records. The funds allotted for MPs to use for providing drinking water, public health, education, sanitation, sports and roads are either unused or misused

The Member of Parliament (MP) Local Area Development Scheme (LADS) funds, which were instituted in 1993 at Rs50 lakh per year have grown to Rs5 crore per year in 2011. However, the usage of MPLADS funds from all MPs of Lok Sabha as well as Rajya Sabha, remain in controversy, thanks to the opaqueness in their expenditure.

As per the Annual report for 2010-2011 by the Ministry of Statistics and Programme Implementation, which disburses these funds, at least 45% to 60% of MPLADS funds in most of the states have been spent on roads. Looks like most of our Parliamentarians, believe that creating roads means development!

As per the guidelines of MP LAD funds, preference of works under this scheme is to be given to works relating to national priorities such as provision of drinking water, public health, education, sanitation, sports and roads. However, as per the Annual Report findings, in most of the States, only 1% to 7% money has been spent on public sanitation, drinking water, electricity, health and family welfare. Except for Odisha, Kerala, Punjab, Sikkim, Tamil Nadu, West Bengal, Uttarakhand and Tripura, which have spent between 20% to 50% money for education, other progressive states have not spent beyond 3%-7%. Lakshadweep has been an exception, spending 100% of the funds on education. Sports too is very low on the priority list of most states that have spent not more than 3% of the funds except for North-East states like Manipur and Mizoram who spent more than 20% of it.

The committee’s findings in the Annual Report also observe that in 13 states/ union territories (UTs), Rs1.30 crore was used for not admissible items like payment of honorarium/ wages/ travelling, expenses of staff, fuel for official vehicles and purchase of laptops. It also observed that no proper records were maintained; eight States executed 700 works costing Rs9.45 crore without formal recommendations of the MPs; 150 works worth to Rs2.44 crore were recommended by the representatives of the MPs. Nearly Rs15 crore were disbursed to private trusts/ societies beyond the permissible limit of Rs25 lakh per trust and 145 illegal trusts were given around Rs6 crore from the MP LAD funds. Works worth Rs20 crore for which the district collectorates had already released money during 2004-2009, are yet to commence.

Besides the Annual Report, the website is not abiding comprehensively by the Section 4 of the Right to Information (RTI) Act. The website gives details of disbursed funds of MPs but not the detailed proposals, progress of works and completion of works that has been made mandatory. All citizens have the right to get information on the detailed plan, progress and implementation of the MP funds and this has to be mandatorily put up on the respective websites. However, this is not done. A plaque has to be permanently put at the work site with the name of the MP and that it is done from the MP LAD fund, but you hardly see such plaques.

As per the directives of the government, the following norms of transparency under the RTI Act must be followed by the Ministry of Statistics and Programme Implementation and all the district authorities which implement the works. They are:

As per the provisions of the RTI Act, 2005 and the rules framed there under, all citizens have the right to information on any aspect of the MPLAD Scheme including works recommended/ sanctioned/ executed under it, cost of works sanctioned, implementing agencies, quality of works completed, user agencies, etc. The district authorities are responsible for providing information to the public in the manner required under the RTI Act, 2005.

Under the guidelines, it has been stipulated that for all works executed under the scheme, a plaque (stone/ metal) carrying the inscription ‘Member of Parliament Local Area Development Scheme Works’ indicating the cost involved, the commencement, completion and inauguration date and name of the MP sponsoring the project, should be erected permanently.

The MPLADS guidelines stipulate that the list of all completed and ongoing works with MPLADS funds should be displayed at the District Authority Office and posted Background and Policy on the website for information of the general public.

As per the Guidelines, there is a stipulated time limit of 75 days for consideration of sanction for a recommended work, and of one year for the completion of sanctioned work. In case of rejection of a work recommended by an MP, District Authority is to intimate to the MP within a period of 45 days with reasons thereof.

For greater transparency, it has been directed:

District Authorities are to provide information on any aspect of MPLAD Scheme, such as works recommended by MPs, works sanctioned/ not sanctioned, cost of works sanctioned, implementing agencies and quality of work completed to the general public in the manner as required under the RTI Act, 2005, as the implementation of the scheme has been brought under the purview of the said Act.

There is a MPLADS website ( ) where information on release of funds, details of works completed and under execution are available. The District Authority is required to upload the work details on the website to make them available in the public domain.

In order to bring transparency and accountability at the ground level and to promote e-governance, software for monitoring MPLADS works was launched in November 2004. The software enables online monitoring of details of works and the analysis of this data is used to bring out various reports, once the data entry and uploading in respect of a constituency or a Rajya Sabha MP is completed.

 The modus operandi of these funds are as follows:

* The Members of Parliament-MPs have a recommendatory role under the MP LAD Scheme. They recommend their choice of works to the concerned District Authorities who implement these works by following the established procedures of the concerned State Government.

* The District Authority is empowered to examine the eligibility of works, sanction funds and select the Implementing agencies, prioritise works, supervise overall execution, and monitor the scheme at the ground level. The District Authorities get the works executed through the line departments, local self governments or other government agencies. In some cases, the District Authorities get the works executed through reputed non- government organizations (NGOs).

* Members from the Lok Sabha can recommend works in their respective constituencies. The elected members of the Rajya Sabha can recommend works anywhere in the state from which they are elected. Nominated Members of the Lok Sabha and Rajya Sabha may select works for implementation anywhere in the country.

* There is no limit for works to be executed by government agencies. However, as per the background and policy, there is a ceiling of Rs25 lakh for works meant for the life time of each Trust/ Society. An MP can recommend funds only up to Rs50 lakh in a financial year from MPLADS funds for works to societies/ trusts.

* MPLADS works can be implemented in areas affected by natural calamities like, floods, cyclone, hailstorm, avalanche, cloud burst, pest attack, landslides, tornado, earthquake, drought, Tsunami, fire, chemical, biological and radiological hazards. MPs from the non-affected areas of the state can also recommend permissible works up to a maximum of Rs10 lakh per annum in the affected area(s) in that state.

* All recommended eligible works should be sanctioned within 75 days from the date of receipt of the recommendation, after completing all formalities. The District Authority shall, however, inform MPs regarding rejection, if any, within 45 days from the date of receipt of recommendations, with reasons thereof.”

* The time frame for completion of works should be stipulated to the implementing agency and should not normally exceed one year.


Office buildings, residential buildings, and other buildings relating to Central or State Governments, Departments, Agencies or Organisations.

Works belonging to commercial organisations, private institutions or co-operative institutions.

Repair and maintenance works of any type other than special repairs for restoration/ up-gradation of any durable asset.

Memorials or memorial buildings.

Acquisition of land or any compensation for land acquired.

Assets of individual benefit except those which are part of approved schemes.

Places for religious worship.

(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)



Babubhai Vaghela

2 years ago

Criminal Prosecution of erring MPs Desperate Need of Hour.

Dr Paresh Vaidya

3 years ago

Good study.
We have 3 tiers of representative Democracy: MP, MLA and Corporator / Panchayat Member. They have their respective functions well defined. But under the new buzz word of "development" all want to do the same thing; Build roads which people can identify them with !

All three levels have this fund in different names. In Navi Mumbai I saw all Bus Stands in a stretch duplicated - one built by Municipality and just next, the other by the MLA !! So unimaginative. May be his fund was getting closed.

Actually time has come to scrap this scheme at all levels.


Dayananda Kamath k

In Reply to Dr Paresh Vaidya 3 years ago

rather prosecute and punish them for misusing the public funds for setting up bus stands side by side. send them to jail for 3 years and fine 10 times the money wated that would make these people function properly

Dayananda Kamath k

3 years ago

they have used the funds for donating to ngo of election commissioner earlier. rather he was appointed after funding his ngo. none bothered to question and recover the amount.

Nagesh Kini

3 years ago

Thanks Vinita for the enlightening article on the stark realities of the MPLAD.
The entire fraud needs a serious review. But the mulla and stakes involved no MP or MLA will ever touch it, they'll only insist on enhancing as they do regularly with their own salaries and perks.
These funds ought to placed in the hands of the 73rd and 74th Amendment institutions on which they may be given a limited say.
They ought to be taken out of the present bunch who are found to be either grossly abusing or not using it at all.
The two Congress MP now re-nominated to Mumbai SC proudly publicly boasts of 'exhausting' all his funds on public toilets and drawing on others' funds as well. But no visible signs of his spends. Only a RTI will disclose this!

Ratilal Shah

3 years ago

It will be interesting to know how much and where these funds have been utilised in the states not mentioned in this report.


3 years ago

One more missing drop from a missing bucket!

How to improve customer service at ATM kiosks?

With the proliferation of ATMs and corporates starting white-label ATMs, there is bound to be considerable deterioration in customer service. Therefore, preventive and punitive steps are required to be taken by the RBI before it goes out of hand

As per the reports that appeared in Business Line of 10th April, the Reserve Bank of India (RBI) has, in a survey of usage of automated teller machines (ATMs), found several deficiencies in service at the kiosks, and accordingly asked banks to take steps to set right the deficiencies observed. But it is surprising that RBI has not thought it fit to publish the results of the survey in their website so far, nor has it made known as to what instructions had been given to the banks in this regard, though it has considerable impact on the banking public.

Deficiencies observed according to the RBI survey:

  1. Many ATMs have often insufficient cash and hence reject request of the customer particularly during holidays.

  2. The ATMs booths do not display contact details for lodging complaints whenever the customer finds difficulty in withdrawing cash.

  3. ATM identification numbers are not being displayed at the ATM center. Every ATM should have unique identification number boldly displayed so that it becomes easier for customers to convey the exact location of the ATM.

  4. The most common complaint is that there are no clear guidelines as to how to proceed when the ATMs do not dispense cash, but debit the account of the customer.

These are some of the complaints that have been revealed by an official of a public sector bank to a journalist, and this has found its way in the press.

Apart from the problems enumerated in the aforesaid survey, there are a wide variety of other problems encountered by the public like swallowing of debit cards by the machines, not disbursing the full amount withdrawn and fraudulent withdrawals even after the loss of the ATM card is reported to the issuing bank.

In fact, RBI gives instructions to banks at various times, but there is no single authority to monitor compliance of these instructions. A case in point is as under:

On 13 April, 2009, RBI instructed banks to comply with the following for the benefit of persons with disabilities:

Firstly, banks were advised to take necessary steps to provide all existing ATMs / future ATMs with ramps so that wheel chair users or persons with disabilities, can easily access them and also make arrangements in such a way that the height of the ATM does not create an impediment in its use by a wheelchair user. Banks may also take appropriate steps including providing ramps at the entrance of the bank branches so that the persons with disabilities / wheel chair users can enter the bank branches and conduct business without much difficulty.

Secondly, banks were advised to make at least one third of new ATMs installed as talking ATMs with Braille keypads and place them strategically in consultation with other banks to ensure that at least one talking ATM with Braille keypad is generally available in each locality for catering to needs of visually impaired persons.

Even after five years, there is hardly any improvement in the way in which ATMs are located or made accessible to persons with disability, and nobody is monitoring compliance of these guidelines, with none to question the banks in this regard.

Role of National Payments Corporation of India -NPCI:

The NPCI plays an important role in bringing all the ATMs interconnected to each other to facilitate customers of any bank to operate the ATMs of any other bank. It operates the National Financial Switch, which connects all ATMs that has served as a boon to the bank customers, who have access to all ATMs in the country.

As at the end of February 2014, there were over 1.55 lakh ATMs of all banks put together, and this is expected to at least double within the next two years with India Post too jumping into the bandwagon and many corporates setting up white-label ATMs in the not too distant future.

But what is important is that with the proliferation of ATMs and corporates starting what are known as white-label ATMs, which are being set up, operated and owned by non-banks, there is bound to be considerable deterioration in customer service, and hence preventive and punitive steps are required to be taken by the bank regulator before it goes out of hand.

Centralised grievance redressal system needed

This sudden growth of automated teller machines or ATMs and heterogeneous ownership of ATMs, call for a streamlined, well documented and a centralised grievance redressal mechanism under the control of NPCI, who should take over the entire responsibility for redressing all grievances emanating from ATMs in a time bound manner. With the private non-bank corporates entering the fray, who have no control over the banking operations, there is bound to be disharmony in settlement of disputes, which can only be handled with an iron hand by a centralised agency.

The RBI should come out with detailed guidelines, including penal provisions for non-compliance of the directions of the NPCI, who should take the lead in meeting the aspirations of the banking public. As per the present regulations, if the amount is debited to your account but not dispensed by the machine, you are entitled to compensation of Rs100 per day of delay, if such amount is not reimbursed to you within 10 days of making a complaint. A similar system of compensation should be awarded for fraudulent withdrawals as well, unless the bank is able to prove the negligence of the customer.

The entire system of submitting a complaint should be made easy and simple, so that customers are not confused about how to make a complaint by giving them the facility to make the complaint instantly from the same kiosk. For lodging the complaints in the first instance, there should be a toll free telephone connection connecting directly to the centralised grievance redressal center and this should be boldly displayed at all ATM booths. And all such telephonic complaints should be recorded at the receiving end and promptly acknowledged through SMSs so that the customer is aware that his complaint has been correctly registered. This will lessen the burden to the complainant, particularly when you encounter problems with an ATM, which is not owned by the bank where you maintain your bank account.

There is a need to encourage more and more usage of ATMs to bring down the cost of transactions for banks, and hence it is necessary to make all ATMs as user friendly as possible and safe and secure. The recent incident of an attack on a lady bank officer in one of the ATM kiosks in Bangalore is still fresh in our memory and RBI should direct that all banks and ATM owners should take all possible preventive measures to ensure that such incidents do not happen again anywhere in the country.

(The author is banking analyst and he writes for Moneylife under the pen name 'Gurpur'.)




2 years ago

the recommendations are indeed good.we have to press hard to make them realised.let us campaign relentlessly for the betterment

S Santhanam

3 years ago

The Bangalore incident of attack on a woman in an ATM booth is still unresolved, despite all evidence of the attacker. With elections in Karnataka on, people should demand the people's representatives to get at the root of the problem and bring the culprit to the books. Similar cases are still unresolved. RBI may simply say it is a police case and not related to the banking. But, it has to answer the user of the ATM who is a client of a bank.


3 years ago

I am so happy to read Mr Nagesh Kini's comment asking for Suo Moto action by RBI.That is just what is needed to stem the mounting rot of frauds as he rightly points out.

In this matter, the Can Bk Chairman, Opposite Party [OP], had the audacity to tell the court{both in District Forum as well as in State Commission}, that it is the onus of the victim to follow up with Police and obtain the Police Report and Can Bk will not do it!He does not submit to court his own investigation report on such a serious complaint. He does not want to go to Police and obtain Police Report. That is the level of arrogance, Canara Bank Chairman displays to a customer who has fallen victim to his defective ATM system.

Pushed to the corner, Victim runs around and gets the Police Report and submits it to Court as well as to OP.

Even after obtaining the Police Report OP states in sworn affidavits, both to District Forum and State Commission that the victim has failed to obtain Police Report.That is a lie.

Victim pleads to Courts for SUO MOTO action by Court for PERJURY as OP is resorting to lying under oath just to mislead the court and deny justice to victim. Despite examples set by Honourable Supreme Court by taking prompt Suo Moto action in Perjury case, Case number, pointed out by victim, court is still to take action on OP, for Perjury.That is the sad state of affairs.

RBI can make an example out of this default of Canara Bank Chairman and cleanse the rot that has set in, unchecked by Ombudsman.

Hope RBI steps in and eradicates this rot, now that esteemed Governor has recognized the problem of Banks denying justice to their customer without proving any negligence.


Mohan Raj


3 years ago

This article mentions about "Fraudulent Cash Withdrawals".

Even if one fraudulent cash withdrawal takes place,that is one too many and the concerned bank has no business to be in ATM business. There should be zero tolerance for fraudulent cash withdrawal. Only with such clamp down can such frauds be eliminated. Banks should be forced to investigate such frauds and eliminate them in toto. Currently they are just dodging and do not reveal any investigation report as if their insiders are involved!

In this connection I repeat below my comments in a similar article of Madam Sucheta, elsewhere as that comment is relevant for this article also:

"This is a nice and helpful article by our respected Sucheta.

It is very wonderful of the Governor of RBI, to have asked banks to limit customer liability in case of losses due to hacking and phishing, unless they can prove deliberate customer negligence.He must have come to know of many such cases being prevalent.

Canara Bank is a great defaulter on this score. Their ATM security system is flawed.I know of a case where the Canara Bk Debit card is with owner, PIN number is known only to him and yet three consecutive withdrawals to the tune of rs 21000/- have been made. Can Bank has the video footage, showing the culprit who did the hacking the RBI Governor is talking about.

Can Bk refused to reinstate the amount. Victim went to consumer court,District Forum. Chairman, Canara Bank is the Opposite Party. Court asked the OP of the bank to produce the enquiry report and video footage. Can bk kept silent. Court ordered reinstatement of amount.

Instead of being customer friendly, Canara Bank has gone on appeal, to State Commission with out producing any proof, just to harass the victim. One year is over and Canara Bank is likely to keep asking adjournments and keep dragging on the case.They have nothing to lose. Chairman will keep getting his salary and perks. Poor customer of the Bank is the loser. Does Canara bank care?

Canara Bank is a very customer unfriendly bank even as it is running a bogus ATM system which lends itself to fraudulent withdrawals. RTI has revealed that in 2013 alone CanBK had more than 340 of such fraudulent cash withdrawals of their ATM debit cards.More than one a day!
Data for 2014 must be even more alarming.

I wish Ombudsman steps in and calls for all the investigation report of each and every fraudulent cash withdrawal of Canara Bank, debit as well as credit cards and take suitable action. The Chairman of the Canara Bank needs to be hauled up and some stringent action taken against him for his unfriendliness towards his customers and dragging them to courts without proving any customer negligence as Governor is pointing out.

It is very sad that Canara Bank indulges in such misbehavior and Ombudsman is silent.Hope RBI steps in and rectifies this pathetic situation.

If the Canara Bank Chairman cannot ensure zero occurrence of fraudulent cash withdrawals,he has to be ordered to shut down his ATM operations, forthwith.

I will be delighted to give all the proof to RBI".


Mohan Raj


Nagesh Kini

In Reply to crmohanraj 3 years ago

Canara Bank's action of preferring appeals and not complying with the Consumer Forum directive is most customer unfriendly and needs to be severely condemned. That even the Chairman is playing ball makes it all the more serious.
This is a fit case for the RBI as Banking Regulator to act suo moto in demanding all papers as well as corrective steps in the face of mounting frauds.

Nagesh Kini

3 years ago

The fact remains that the ATMs have delivered tremendously by doing away with having to carry cheque books and ease of cash withdrawals, balances updating and various payment options for the bank customers at the same time more benefits for the brick-n-mortar banking sector by bringing about reduction in space and manpower requirements and less of customer foot falls at branches.
The suggestions made by Gurpur are extremely valid.

Nagesh Kini

3 years ago

The fact remains that the ATMs have delivered tremendously by doing away with having to carry cheque books and ease of cash withdrawals, balances updating and various payment options for the bank customers at the same time more benefits for the brick-n-mortar banking sector by bringing about reduction in space and manpower requirements and less of customer foot falls at branches.
The suggestions made by Gurpur are extremely valid.

Nagesh Kini

3 years ago

The fact remains that the ATMs have delivered tremendously by doing away with having to carry cheque books and ease of cash withdrawals, balances updating and various payment options for the bank customers at the same time more benefits for the brick-n-mortar banking sector by bringing about reduction in space and manpower requirements and less of customer foot falls at branches.
The suggestions made by Gurpur are extremely valid.

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