Government proposes change in rules defining utilisation of fund under MPLADS

Context 

In a recent development, the government has proposed a change in rules defining the utilisation of funds under the Member of Parliament Local Area Development Scheme (MPLADS).

The proposed change

• The government has proposed that any interest accrued on the ?5 crore annual funds that are allotted to each MP for their local area development scheme (MPLADS) has to be deposited back to the Centre.

What is the MPLAD Scheme?

• MPLAD is a central government scheme.
• Under the scheme, MPs can recommend development programmes involving spending of Rs 5 crore every year in their respective constituencies. 
• MPs from both Lok Sabha and Rajya Sabha, including nominated ones, can do so.
• States have their version of this scheme with varying amounts per MLA.

How does the scheme work?

• MPs and MLAs do not receive any money under these schemes. The government transfers it directly to the respective local authorities. 
• The legislators can only recommend works in their constituencies based on a set of guidelines.