" Every problem is an opportunity in disguise" - John Adams,Former US President With COVID19 playing havoc across the world, the Indian democratic polity seems to have been naturally presented with an opportunity to circumvent provisions of the Constitution. It appears as if the Union government is beginning to embrace the pandemic situation with an overwhelming impulsiveness...
" Every problem is an opportunity in disguise" - John Adams,Former US President
With COVID19 playing havoc across the world, the Indian democratic polity seems to have been naturally presented with an opportunity to circumvent provisions of the Constitution. It appears as if the Union government is beginning to embrace the pandemic situation with an overwhelming impulsiveness to assert authority that is not sanctioned by our Constitution. The exercise of suspending MPLAD scheme by the Union government in the present situation signifies a clear departure from what is constitutional rectitude.
The Government of India vide Circular No.E-4/2020–MPLADS (Pt II) dated 08.04.2020 and issued by MPLADS Division, Ministry of Statistics and Programme Implementation has declared that it has decided not to operate the MPLAD scheme for two consecutive years including the current financial year 2020-2021 and the succeeding one 2021-2022. It is doing this to place these funds at the disposal of the Ministry of Finance for strengthening the efforts in managing the challenges of COVID19 and its adverse impact on the society.
The above circular has come about consequent to, inter alia, a decision taken by the Council of Ministers on 6thof April, 2020. It categorically states that no funds will be released in the above mentioned two years even for those works that have already received sanctions and have been awarded by the authorities.
While the object behind the suspension appears to have been influenced by the unprecedented situation prevailing in countries across the globe, it inevitably gives rise to a few disconcerting questions that are related to constitutional propriety, the relationship between Union and the States and the working of cooperative federalism.
Genesis of the Scheme:
Members of Parliament Local Area Development (MPLAD) Scheme was announced on 23rd December 1993. The scheme was essentially formulated for enabling Members of Parliament to identify smaller works of capital nature based on the micro needs of their constituencies. The funds were sourced from the Consolidated Fund of India.
The Guidelines lay down that the objective of the Scheme is to enable the Members of the Parliament to recommend funds for works of developmental nature with an emphasis on the creation of durable community assets based on the locally-felt needs of their own constituencies. The guideline categorically also prescribes that right from the date of inception of the scheme, durable assets of national priority like drinking water, primary education, public health, sanitation and roads are to be created.
At the outset, allocation was pegged at Rupees 5 Lakhs per Member of Parliament which has been subsequently enhanced up to Rupees 5 Crores. The scheme was originally administered by the Ministry of Rural Development. Subsequently it has been transferred to the Ministry of Statistics and Programme Implementation.
Working of the Scheme:
It is a unique scheme with the cardinal feature of decentralized development founded on the premise of the principle of participatory development and maintenance of economic and social infrastructure and filling the gaps of last mile connectivity. The scope of priority sectors under scheme has been expanded to cover electricity facility, non-conventional energy resources, family welfare, irrigation facilities, railways, pathways and bridges, sports, agriculture and allied activities, cluster development for handloom and urban development.
As per statistics available as on 02.07.2018, Rs.47,572.75 Crores have been released by the Union government since 1993 and about 95% of amount have been utilised under the scheme. In the due course, the scheme acquired added sheen since it was provided that funds under MPLAD scheme could be converged with Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for creating more durable assets and with National Program for Development of Sports (Khelo India). The non-lapsable nature of fund with provision to carry forward the unreleased fund to next year gives added teeth to the scheme. The scheme clearly envisages development by fostering community involvement at grass root level in contrast to top-down approach and aligning with the needs of the community.
The Constitutional Validity of the Scheme:
The constitutional validity of MPLAD has been challenged in a case before the Apex court and reported in (2010) 5 SCC 538; Bhim Singh vs.Union of India.
A Constitutional Bench of the Supreme Court while upholding it in a judgment dated 06.05.2010, inter alia has held that the annual recurring public welfare expenditure on MPLAD scheme from Consolidated Fund of India by passing Money Bills or Appropriation Bills under Article 114 without any new enactment is valid and is intra vires the Constitution.
It also held that the Scheme satisfied the constitutional mandate aimed for the fulfilment of development and welfare of the State as reflected in the Directive Principles of State Policy.
It is noteworthy that Second Administrative Reforms Commission in its report submitted on 15.04.2009 struck a discordant note about MPLAD scheme and also recommended for its abolition. The above judgement by the Supreme Court of India put to rest many of the concerns raised by the said Commission.
The Present Development:
The MPLAD scheme is often cited as the flagship scheme for "cooperative federalism" since funds allotted are from and out of the Consolidated Fund of India and available to every elected representative of Parliament (MP). The scheme does not operate only in favour of the members of parliament hailing from the ruling party.
While so the cabinet's decision unilaterally taken on 06.04.2020 to suspend the MPLAD Scheme funds in the wake of COVID19 and to place these funds at the disposal of the Ministry of Finance to face the financial strains caused towards improving the health infrastructure has raised uncomfortable questions about the government's prerogative in handling the scheme itself.
COVID19 has been declared as a 'notified disaster' by the Union Home Ministry. But it appears that doctrine of necessity has been invoked through an executive fiat to clamp an 'emergency measure' as though the country is reeling under a financial emergency within the meaning of Article 360.
The decision by the council of ministers which is likely the basis which prompted the Union government not to operate the MPLAD scheme to place the said fund at the disposal of the Ministry of Finance is not just unconscientious but also unconstitutional. The remaining elected members of Parliament have been left in the lurch to experience a benign deprivation of their rights at the cost of the welfare of their electorate.
It is relevant to recall the observation of Justice B. P. Jeevan Reddy in S. R. Bommai vs. Union of India [(1994) 3 SCC 1]
" Let it be said that the federalism in the Indian Constitution is not a matter of administrative convenience, but one of principle- the outcome of our own historical process and recognition of the ground realities."
The council of ministers who comprise the cabinet represent only the ruling dispensation as elected members. The cabinet decision to suspend the MPLAD scheme for two successive financial years without even consulting the remaining members of Parliament is in absolute violation of cooperative federalism.
Further, as per Clause (3) of Article 75, the council of ministers shall be collectively responsible to the House of the People. But the present action by the council of ministers has violated the constitutional accountability and can be counted as wholly undemocratic.
Procedure in Financial Matters:
- The procedure to be followed by the government in financial matters has been laid down in Articles 112-119 of the Constitution of India. Besides various expenditures charged upon the Consolidated Fund of India, demands for grants sought by the Union Executive have to be met from the Consolidated Fund of India as per Article 112(3).
- The demands for grants are voted in Parliament as per Article 113(2) and the final authority to decide the quantum of monies to be sanctioned lies with the House of the People or the Lok Sabha.
- After the grant has been voted and accepted by the Parliament, a Bill is introduced to provide for appropriation of payments out of the Consolidated Fund of India. Such Bills are called Appropriation Bills.
- An Appropriation Bill is a Money Bill in terms of Article 110(1) (d) which has to be introduced as per Article 107 to be dealt with under Article 109. The House of People also has the plenary power to sanction payments and expenditure from the Consolidated Fund of India. But it can only be in the form of grants to the Union Executive and only by means of an Appropriation Act.
- Clause (3) of Article 114 clearly states that subject to the provisions of Article 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of the above stated article.
- Clause (3) of Article 266 also states that no moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided for in this Constitution.
A conjoint reading of the above provisions of the Constitution of India and the decision making process adopted by the Union government not to operate the MPLAD scheme funds and to place the said funds at the disposal of the Ministry of Finance is in violation of this constitutional scheme.
The Constituent Assembly Debates would clearly show that the framers of the Constitution were too keen to have an effective financial control of the elected representatives of the people over the government or the Council of Ministers. The fulcrum of this system is the demand and grant transaction between the government and elected members of the House of the People as practised in Britain, which evolved as triumph of people's power over the right of primacy claimed by autocratic kings.
May's Parliamentary Practice states as follows:
" It was a central factor in the historical development of parliamentary influence and power that the sovereign was obliged to obtain the consent of Parliament ( and particularly of the House of Commons as representatives of the people) to levying of taxes to meet the expenditure of the State.... it was for the Sovereign to demand money and for the Commons to respond to that demand.
In more modern terms, the Government presents to the House of Commons its detailed requirements for the functioning of the public services; it is for the Commons, acting on the initiative of the Ministers of the Crown, first to authorise the relevant expenditure (or, 'supply') and, second, to provide through taxes and other sources of public revenue the 'ways and means' deemed necessary to meet the supply so granted".
Indian Constitution adopted the same system to ensure that democratic accountability and control is retained by not providing merely a perfunctory role to perform.
It is clear that no money can be withdrawn from the Consolidated Fund of India without an appropriation Act passed in accordance with either Article 114 or 115 or 116. The object behind these provisions is to secure proper control of the House of the People over the government with regard to the policy decisions and implementation of those policies. The provisions of Constitution cannot be set at naught by a mere executive instruction and it violates the doctrines of basic structure and separation of powers expounded under the Constitution. Unfettered discretion is anathema to rule of law.
That apart the abrupt decision to stop even the ongoing works under the MPLAD scheme has come as a bolt from the blue. The projects that are underway will be halted and it is going to result in heavy escalation of cost of execution. Besides that stoppage of disbursal of funds will affect third party rights who would have rendered their service under contract. It is going to further burden the exchequer on interest and cost overrun.
Conclusion:
In the midst of a pandemic, the Union government has bypassed its constitutional obligations. Suspension of MPLAD scheme funds is an affront to the directive principles of State policy.
In the Constituent Assembly Debates, Dr. Ambedkar has underscored that one of the main objectives of the Directive Principles of State Policy is to achieve economic democracy. The present decision by the elected representatives has undermined and betrayed that trust.
Neither the council of ministers nor the Union executive can usurp the powers provided to the House of the People by the Constitution of India. As observed in May's Parliamentary Practice:
"The appropriation by the House of Commons of the individual sums granted as supply to the specific services for which they are voted in the estimates is secured annually by legislation in the form of the appropriation Act.
Three important precepts of financial practice are implied in the appropriation of expenditure:
(1) A sum appropriated to a particular service cannot be spent on another service.
(2) The sum appropriated is a maximum sum.
(3) It is a sum available only to defray costs which have arisen during the year in respect of which it has been appropriated by the relevant Act."
The Union government could not have suspended the MPLAD scheme funds and placed those funds at the disposal of Ministry of Finance without following the constitutional provisions. Extraordinary situations may require extraordinary arrangements. But that does not enable the Union government to override the constitutional accountability. Common sense and conscience both demand that the decision needs to be reconsidered in toto. Every problem is an opportunity in disguise. But the real question is whether the opportunity is availed for constructive nation building or to weaken the constitutional edifice !!
(The author is an Advocate at the Madras High Court and may be reached at rsrlex@yahoo.com. Views are personal)