If Rs 20-lakh car for MLAs is wrong, how about Rs 20,000 cr for MPs?

It’s interesting to note how bad ideas develop a life of their own and become worse ideas over time. In the process, we lose sight of the original sin. Exhibit A is the MP Local Area Development Scheme (MPLADS), where every member of parliament is given Rs 5 crore every year to get work done in his constituency at the expense of the exchequer. In other words, the taxpayer pays to help an MP to endear himself to his voters. This is essentially undemocratic, since elected MPs get to spend government money to get themselves re-elected, and it is a wonder why no loser has ever challenged the scheme in courts.

The simple answer, of course, must be that MPLADS is legalised corruption paid for by the taxpayer – and no politician – even those who lost an election - wants to challenge it since it benefits their whole biradari.

Since politicians are good at copying bad ideas to their advantage, MPLADS soon had its mirror schemes in states, called the MLA Local Area Development Scheme. Young Akhilesh Yadav, the 38-year-old Uttar Pradesh Chief Minister, raised a storm of protest on Tuesday when he allowed MLAs to buy cars costing upto Rs 20 lakh from MLA funds.

The Samajwadi CM, whose party’s symbol is the cycle, was all reason and the milk of human kindness while giving reasons for this munificence: “This will help MLAs who do not have money to buy vehicles,” the Hindustan Times quoted him as saying.

Akhilesh was giving his MLAs the corporate equivalent of a loan to buy a car. PTI

His holier-than-thou political rivals decided to play killjoys on cars. (Wonder if their MLAs are amused). Hukum Singh, leader of the BJP legislature party in UP, announced grandly that “BJP MLAs have decided not to purchase cars with the MLA fund. People will doubt the integrity of an MLA using public money for personal convenience.” Ho-hum.

BSP leader Swami Prasad Maurya also indicated his party’s saintly intentions, saying his MLAs will “not purchase cars with public money”. Hmm…

Congress leaders also reiterated their sack-cloth-and-ashes holiness in similar terms.

So is Akhilesh the villain of the piece?

Interestingly, the whole business of giving MLAs more money for their local area funds was the primary motivation for sanctioning the Rs 20 lakh for buying cars.

In this, Congress, BJP and BSP leaders were more or less unanimous. In fact, Congress leader Pramod Tiwari, even while being squeamish about Akhilesh’s Rs 20 lakh car idea, was busy pleading for more outlays on the MLA Local Development Scheme.

This is what got Akhilesh to oblige, when he announced that the fund size per MLA would be raised from Rs 1.25 crore to Rs 1.5 crore per year – and out of the increase MLAs could buy cars. His logic, which masked his real intention of keeping legislators happy, was this: “Several MLAs cannot afford a vehicle. They can use the fund. The vehicle’s value would depreciate each year and after five years an MLA can deposit the depreciated amount and buy it or hand it over.”

Akhilesh was thus giving his MLAs the corporate equivalent of a loan to buy a car, which, when depreciated, can be bought at the written down value by the MLA.


It speaks much for our current political value systems, and the media’s focus on minor issues, that what got attacked was the Rs 20 lakh car proposal, but not the Rs 1.5 crore money for jam that MLAs get for no reason at all.

No party has lambasted either the MPLADS or the MLA equivalent scheme in states. This is seen as their birth right.

Is it?

MPLADS was born during the Narasimha Rao regime, when the PM tried to keep his MPs happy by giving them money to play around with. It was meant to keep the political situation stable at a time when the country, faced with external bankruptcy, could ill afford to let a reformist minority government to fail.

The political process has since hijacked the idea to make MPs and MLAs quiescent, by allowing them to milk it for private benefit.

As Firstpost noted before, over the last 18 years, the scheme has got more bad reviews than good. Study reports have found that MPs were often using the money to channel it back to their own hand-picked contractors or trusts. This benefits them in two ways: they can execute public works to favour their constituencies, and they can also profit from it by using their own contractors or trusts to do the job. In short, MPLADS is another way to get the exchequer to invest in their own private businesses – and not much about helping their constituencies.

The Comptroller and Auditor General (CAG), in a review of the scheme for two time-periods – 1993-97 and 1997-2000, observed that not only had the implementation of the scheme not improved, it had gone from bad to worse. According to Frontline magazine, CAG criticised the scheme’s “poor utilisation of funds, poor monitoring by the ministry, poor quality and, at times, inadmissible work, and suspected fraud and corruption”.

Worse, funds were released without verifying what they would be used for, and often there was no documentation to suggest that any work had been done at all. In other words, MPs may have simply swiped the money. CAG, which surveyed 111 sample constituencies, discovered that there was no documentation on how Rs 161 crore was spent. And remember, this was the result from a sample that covered less than a sixth of our honourable MPs at a time when the funds available were far less than today’s Rs 5 crore per MP.

Currently, the central scheme is worth more than Rs 4,000 crore a year - Rs 20,000 crore over the life of the Lok Sabha. That the scheme serves only a political purpose is clear from the fact that even Rajya Sabha MPs get the money, even though they have no constituencies to nurse. Rajya Sabha MPs are essentially nominees of party bosses.

At the state level, the misuse of funds can only be greater, given the lower level of audit and scrutiny.

Consider this: we see Rs 20 lakh for Akhilesh’s car project as sacrilege (Rs 80 crore for all MLAs, if they all bought cars for Rs 20 lakh), but we are willing to turn a blind eye to Rs 20,000 crore of taxpayer-funded budgets for MPs and possible another spend of similar size in our states in a five-year term.

This is not about rooting for Akhilesh’s decision, but to flag an incongruity: We are okay with institutionalised and legalised corruption on a massive and countrywide scale, but not a Rs 20 lakh indulgence?

Come on.

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