Election signal? NREGA cash will be used for MPs' pet projects

Here’s the first sign that the Congress is already into election mode.

Even before the dust over the party’s Uttar Pradesh debacle has settled, the government has decided to let members of Parliament dip into funds meant for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, or NREGA) to fund the labour costs of the MP Local Area Development Scheme (MPLADS).

MPLADS allows each elected member of Parliament to spend upto Rs 5 crore on pet projects in his or her constituency every year. The MP thus has Rs 20 crore to play around with during a five-year term. But now the scheme has gotten even better since this money will be supplemented with free labour funded by NREGA.

According to The Hindustan Times, the statistics and programme implementation ministry, which oversees how MPs are spending their moolah, “has decided to converge the fund” with NREGA, which effectively means the labour cost of any project financed by MPLADS will be met from NREGA funds.

The materials needed will be financed by MPLADS funds.

Since the Congress party has the largest number of MPs in the country, it stands to reason that it will be the largest beneficiary of this decision to “converge” MPLADS with NREGA.

NREGA, the Congress’ flagship social sector scheme that reportedly brought home the bacon in the 2009 elections, has run into rough weather, but it is now being used for a more direct re-election work.

However, more than just getting more money, the decision means power will shift back from gram panchayats – the key players now in deciding how NREGA money is spent – to the centre. And herein lies its political impact.

Says the Hindustan Times: “The decision centralises the use of MGNREGA funds once again. Now, MPs can recommend MGNREGA works suiting their constituencies under MPLADS.”

The budgeted amount under NREGA in 2011-12 is Rs 40,000 crore, but till the end of February, just about half the money had been spent due to inherent deficiencies in the scheme and lack of enthusiasm on the part of states for various reasons.

 Election signal? NREGA cash will be used for MPs pet projects

Shift in power back to the centre and MPs means that the latter can now get more resources to covertly invest in their re-election.AFP

However, this shift in power back to the centre and MPs means that the latter can now get more resources to covertly invest in their re-election.

The MPLADS scheme – which includes money available to Rajya Sabha MPs as well as Lok Sabha ones – has an annual budget of Rs 4,000 crore. The scheme has been riddled with corruption, and is fundamentally iniquitous in the sense that it privileges elected MPs over their rivals.

By giving MPs the right to spend so much money on pet projects – when the limit on campaign spending is only Rs 25 lakh per constituency even in large states – the government is essentially saying you have so much to endear yourself with your voters again.

The scheme can surely be challenged in court since it gives incumbents an advantage over challengers. But no one has done so so far.

Now, by adding NREGA money to the MPLADS kitty, the scheme is becoming even more unfairly tilted towards incumbents.

Of course, the electorate is not always going to vote for incumbents for such small mercies – as the UP election results showed – but then it’s the principle of the thing.

It’s time to scrap MPLADS altogether and use the Rs 20,000 crore for state financing of elections. That could remove one big cause for corruption.

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Updated Date: Mar 09, 2012 17:19:05 IST