In this age when the spread of the COVID-19 pandemic in India comes with the clarion to give more for the cause, there is a strong emotional quotient that is built into the system.
Almost every advertisement or website talks of donating money for the bigger cause with a large number of displayed migrant populace requiring support for something as basic as food. Therefore, several organisations have either made it mandatory to contribute a part of one’s income or kept it open for employees to donate to the PM CARES fund. Those units that are non-functional have suspended operations and payments of salaries if they have not laid off the staff already. There are few options left when the enterprises are going down under.
Against this background, the government sector, too, is not falling short in terms of donations. First, the senior members of the government have offered to take a 30 percent cut in pay with the message being that it should hold for all MPs with the percolatory effects going to states. Bureaucrats could also have to give up a part of their pay. Further, in a move which has generated unnecessary controversy, the Cabinet has passed the motion of all the PMLAD funds to be discontinued for two years so that there is a savings of Rs 7,900 crore which can be used as relief. There has been some umbrage as this amount is quite different from foregoing salary. Let us see how this works.
The MPLADS stands for the ‘Member of Parliament Local Area Development Scheme’ fund where every member is given Rs 5 crore a year to spend for development in her/his constituency. This can be spent for projects in the areas of creation of parks, provision of electricity, irrigation, roads, schools, amenities in towns, hospitals etc. The purpose of this fund is to help in bringing about development. Normally, MPs tend to be transparent about this as they need to tell their constituency voters at the time of elections that they have brought about a certain level of development. Leakages are not very frequent, though money could be spent on populist measures like contribution to local festivals. In the present circumstances should such funds be drawn back?
The rationale is since there already are fiscal issues which require sorting, can such a diversion be justified, as it also means that the MPs will not be able to do what they had planned for the next two years. The total amount concerned for this year will be approximately around Rs 4,000 crore, which is 0.02 percent of the GDP and hence will not really make a major impact on the deficit.
However, given that the country is going in for a massive crowdsourcing exercise where everyone is contributing even small amount like Rs 100, using this set of funds is adding a few drops in the bucket. Also, since the entire exercise is about ensuring that Indians survive, the development aspect of the MPLADS can be given a holiday for two years. After all, people need to be alive and healthy to enjoy whatever facility is being provided. Therefore, a strong message can be sent to the nation by foregoing this amount.
In fact, this should be the initial step and going forward, one can think of several other costs being done away with, for example travel for MPs (today everyone is managing via the Cloud and even meetings with other country heads can be conducted on the web), entertainment, allowances for services, security (the culture of 10 cars accompanying a secretary or MP to the airport) etc.
There is a strong case for reallocating MPLADS funds. But can we think of a compromise which allows money to be spent on the pandemic but at the same time not making the MP irrelevant to his/her constituency?
A way out is to ask every MP to dovetail the expense exclusively for immediate healthcare to the constituency of association. Presently the central and state governments are providing for healthcare against COVID-19 in form of getting ventilators, beds, masks, uniforms etc. As most parts of the country have been afflicted with the epidemic, this should hold quite seamlessly. Where there are fewer cases, the expenditure can be exclusively on health facilities and can be directed at other diseases which are prevalent in the area. Therefore, the MP is sure of making the requisite impact and the nation gains Rs 7,900 cr for healthcare over a period of two years.
The main concern of MPs is that once funds go into the national kitty, money becomes fungible and nobody can trace where it is spent. There have been precedents where states under stress of natural disasters are treated differentially when it comes to getting central aid. This fear can be kept aside if there is such selective targeting, where the wider goal is served and at the same time the MP can continue to get credit. In fact, they can be made more accountable in this scheme as constituencies where the pandemic is severe will question their representative of how the money was spent. This will definitely be an optimal solution – what economists would call a Pareto optimal situation where everyone is better off and no one worse off.
Updated Date: Apr 07, 2020 19:57:21 IST