Indian Express Explained 27th April 2020

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1)Explained: How MPLAD scheme works, and how far its suspension will help COVID-19 fight

What is the MPLAD Scheme?

MPLAD is a central government scheme, under which 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.

Do all states have equal allocation:-

States have their version of this scheme with varying amounts per MLA.

Delhi has the highest allocation under MLALAD; each MLA can recommend works for up to Rs 10 crore each year.

In Punjab and Kerala, the amount is Rs 5 crore per MLA per year; in Assam, Chhattisgarh, Maharashtra and Karnataka, it is Rs 2 crore; in Uttar Pradesh, it was recently increased from Rs 2 crore to Rs 3 crore.

What does suspension of MPLAD means :- Suspension of the MPLAD Scheme will make Rs 7,800 crore available to the government. For comparison, this is only 4.5% of the Rs 1.70 lakh crore relief package for the poor announced under the Pradhan Mantri Garib Kalyan Yojana.

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.

For the MPLAD Scheme, the guidelines focus on the creation of durable community assets like roads, school buildings etc.

Recommendations for non-durable assets can be made only under limited circumstances. For example, last month, the government allowed use of MPLAD funds for the purchase of personal protection equipment, coronavirus testing kits etc.

When did the scheme start?

Prime Minister P V Narasimha Rao announced the scheme on December 23, 1993 in Lok Sabha.

What has been the impact of the MPLAD scheme?

  • Until 2017, nearly 19 lakh projects worth Rs 45,000 crore had been sanctioned under the MPLAD Scheme.
  • Third-party evaluators appointed by the government reported that the creation of good quality assets had a “positive impact on the local economy, social fabric and feasible environment”.
  • 82% of the projects have been in rural areas and the remaining in urban/semi-urban areas.


  • First, that it is inconsistent with the spirit of the Constitution as it co-opts legislators into executive functioning.
  • The second criticism stems from allegations of corruption associated with allocation of works. The Comptroller and Auditor General has on many occasions highlighted gaps in implementation.

2)Banking Correspondents :-

Banking Correspondents (BCs) are individuals/entities engaged by a bank in India (commercial banks, Regional Rural Banks (RRBs) and Local Area Banks (LABs)) for providing banking services in unbanked / under-banked geographical territories.

A banking correspondent works as an agent of the bank and substitutes for the brick and mortar branch of the bank.

BCs engage in

  • identification of borrowers;
  • collection and preliminary processing of loan applications including verification of primary information/data;
  • creating awareness about savings and other products and education and advice on managing money and debt counselling;
  • processing and submission of applications to banks;
  • promoting, nurturing and monitoring of Self Help Groups/ Joint Liability Groups/Credit Groups/others;
  • post-sanction monitoring;
  • follow-up for recovery,
  • disbursal of small value credit,
  • recovery of principal / collection of interest
  • collection of small value deposits
  • sale of micro insurance/ mutual fund products/ pension products/ other third party products and
  • receipt and delivery of small value remittances/ other payment instruments.

3)Environment Information System (ENVIS)

Environment Information System (ENVIS) is a one stop, web enabled and comprehensive portal which provides information on environment and related subject areas to researchers, academicians, policy planners, environmentalists, scientists, engineers and the general public.

It is a decentralized network of databases in operation since 1982-83 (Sixth Plan) and is run by the Ministry of Environment Forests and Climate Change.


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