Allocation of funds directly to members of parliament for expenditure on national priorities, if valid?

MPLAD Scheme

Members of Parliament Local Area Development Scheme:

Validity of direct allocation of funds.

Facts of MPLAD Scheme:

On 23.12.1993, the then Prime Minister announced the MPLAD Scheme. This scheme was formulated for enabling the Members of Parliament to identify small works of capital nature based on locally felt needs in their constituencies. The objective, as seen from the guidelines of the MPLAD Scheme, is to enable the Members of Parliament to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs to be taken up in their Constituencies. The guidelines prescribe that right from inception of the MPLAD Scheme, durable assets of national priorities viz., drinking water, primary education, public health, sanitation and roads etc. are being created.

Question of law:

Does the MPLAD Scheme violates article 275 and 282 of the Constitution of India?

Observations of Supreme Court of India:

The argument that the Appropriation Act by itself is not sufficient to satisfy the requirements of Article 266(3) cannot be accepted. It is true that the activity of spending monies on various projects has to be separately provided by a law. However, if Union Government intends to spend money for public purpose and for implementing various welfare schemes, the same are permitted by presenting an Appropriation Bill which is a Money Bill and by laying the same before the Houses of Parliament and after getting the approval of the Parliament, Lok Sabha, in particular, it becomes law and there cannot be any impediment in implementing the same so long as the MPLAD Scheme is for the public purpose.

We are satisfied that all the tests laid down under the provisions of Article 266(3) have also been fully satisfied in the implementation of the MPLAD Scheme. Further Article 283(1) provides that `law’ made by the Parliament shall regulate withdrawal of money from Consolidated Fund of India. The Appropriation Act passed as per the provisions of Article 114 is `law’ for the purpose of the Constitution of India and the respondents are fully justified in claiming that no separate or independent law is necessary since an item of expenditure forming part of the MPLAD Scheme or the activity on which the expenditure is incurred also, forms part and parcel of such Appropriation Act. In other words, Appropriation Acts are for the purposes of the Constitution of India and no further enactment is required on a proper interpretation of the Constitution of India.

Under Article 73, the executive power of the Union to give grants extends to the matters with respect to which the Parliament has the power to make laws. This is an embargo on the Centre’s power to give discretionary grants to the States and this embargo is lifted by the non- obstante clause in Article 282 whereby the Centre can give discretionary grants to the States even when it has no legislative power on the subject.

The expression ‘public purpose’ under Article 282 should be widely construed and from the point of view of the scheme, it is clear that the same has been designed to promote the purpose underlying the Directive Principles of State Policy as enshrined in Part IV of the Constitution of India. It is not in dispute that the implementation of the Directive Principles is a general responsibility of the Union and the States.

Conclusions of Supreme Court of India on validity of MPLAD Scheme:

1) Owing to the quasi-federal nature of the Constitution and the specific wording of Article 282, both the Union and the State have the power to make grants for a purpose irrespective of whether the subject matter of the purpose falls in the Seventh Schedule provided that the purpose is “public purpose” within the meaning of the Constitution.
2) The MPLAD  Scheme falls within the meaning of “public purpose” aiming for the fulfillment of the development and welfare of the State as reflected in the Directive Principles of State Policy.
3) Both Articles 275 and 282 are sources of spending funds/monies under the Constitution. Article 282 is normally meant for special, temporary or ad hoc schemes. However, the matter of expenditure for a “public purpose”, is subject to fulfillment of the constitutional requirements. The power under Article 282 to sanction grant is not restricted.
4) “Laws ” mentioned in Article 282 would also include Appropriation Acts. A specific or special law need not be enacted by the Parliament to resort to the provision. Thus, the MPLAD Scheme is valid as Appropriation Acts have been duly passed year after year.
5) Indian Constitution does not recognize strict separation of powers. The constitutional principle of separation of powers will only be violated if an essential function of one branch is taken over by another branch, leading to a removal of checks and balances.
6) Even though Members of Parliaments have been given a seemingly executive function, their role is limited to `recommending’ works and actual implementation is done by the local authorities. There is no removal of checks and balances since these are duly provided and have to be strictly adhered to by the guidelines of the MPLAD Scheme and the Parliament. Therefore, the MPLAD Scheme does not violate separation of powers.
7) Panchayat Raj Institutions, Municipal as well as local bodies have also not been denuded of their role or jurisdiction by the Scheme as due place has been accorded to them by the guidelines, in the implementation of the Scheme.
8) The court can strike down a law or scheme only on the basis of its vires or unconstitutionality but not on the basis of its viability. When a regime of accountability is available within the Scheme, it is not proper for the Court to strike it down, unless it violates any constitutional principle.
9) In the present Scheme, an accountability regime has been provided. Efforts must be made to make the regime more robust, but in its current form, cannot be struck down as unconstitutional.
10) The Scheme does not result in an unfair advantage to the sitting Members of Parliament and does not amount to a corrupt practice.

Source: Bhim Singh v. Union of India