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Government of India revises the MPLAD funds rule

Tags: National

The Union Ministry of Finance has notified a change in the Member of Parliament Local Area Development (MPLAD) Fund. Now the interest earned on the (MPLAD) Fund will now be credited to the Consolidated Fund of India. 

  • Earlier it was credited to the MPLAD funds.
  • Every Member of Parliament is entitle to spend Rs 5 crore for the development of its constituencies. Till the amount is actually spent it is kept in a bank account and interest is paid on unutilized money by the banks.

The Government of India has suspended the MPLADS scheme from April 2020 till November 2021 In view of the COVID-19 pandemic.

Member of Parliament Local Area Development Fund (MPLAD)

  • On 23rd December 1993 Prime Minister Narasimha Rao announced the Members of Parliament Local Area Development Scheme (MPLADS) in the Parliament. 
  • Initially the MPLADS was under the control of the Ministry of Rural Development but it was transferred to the Ministry of Statistics and Programme Implementation in October 1994. 


  • The MPLADS is a Plan Scheme fully funded by the Government of India. 
  • The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore. 
  • Lok Sabha Members can recommend works within their constituencies and Elected Members of Rajya Sabha can recommend works within the State of Election.
  •  Nominated Members of the Rajya Sabha can recommend works anywhere in the country.

Works to be done 

  • All works to meet locally felt infrastructure and development needs, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS 
  •  Each MP will recommend works up to the concerned District Authority. 
  • The payment is also released by the designated district authority on completion of the work.

Spend outside the constituencies 

  • Elected members can recommend an amount up to Rs 25 Lakh outside his/her constituencies.
  • In case of severe natural calamity an MP can recommend works up to a maximum of Rs.1 crore for the affected district
  • Whether the calamity is severe or not, it will be decided by the Government of India. 

Consolidated Fund of India 

  • Article 266(1) of the constitution provides for a Consolidated Fund of India and every State in India shall have their own Consolidated Fund of State. It means that every State government in India has their own separate Consolidated Funds.
  • The Consolidated Fund of India includes revenues, which are received by the government through taxes and expenses incurred in the form of borrowings and loans

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