This post was prepared by A. Venugopala Reddy, K. Prabhakar and Patibandla Srikant of the Public Affairs Centre in Bangalore, India 

The findings from the Public Affairs Centre’s recent analysis of the use of the Constituency Development Fund (CDF) in the state of Karnataka, India, reflect many of the distortions inherent in these schemes. The local CDF, called the Member of Parliament Local Area Development Scheme (MPLADS), gives legislators (MPs) a chance to don the role of the executive by allocating funds to development works and actually choosing and implementing specific projects. In Karnataka state, each MP is allocated Rs. 50 million per annum (about US$1 million), an increase of Rs. 30 million per annum (150 percent!) over the prior year. But the Public Affairs Centre study finds that despite this massive increase, many MPs did not bother to utilise the MPLADS fund fully. Some MPs did not even touch their pot, and only two MPs spent 100 percent of their funds.

The poor record of some MPs could be a reflection of their lack of constituency linkages. MPs from the Upper House (Rajya Sabha) are nominated by their political parties, unlike the members of the Lower House (Lok Sabha), who are directly elected by the people. Lok Sabha MPs with direct constituency connections utilized on average 57 percent percent of the allocated funds, while Rajya Sabha members with no constituency linkages utilized only 30 percent. This shows that MPs with weak or no connections to their constituency have less incentive to utilise MPLADS fund.

Underspending was not the only problem. When MPs did spend funds, it is debatable whether they spent them on the right things. Many MPs favoured construction and repair of community halls, ignoring other works related to education, health, roads, and sanitation. A total of 3,857 community hall-related works were carried out in Karnataka from 2004-2009. In this period, Devegowda, former Prime Minister, spent almost US$2 million on community halls, followed closely by a number of other MPs.  In fact, community halls received the largest share of funds with 48 percent percent of MPLAD funds being used for these structures. Community halls are followed by roads at 22 percent and education at only 13 percent. Other sectors like drinking water (2 percent), bus shelters (3 percent), irrigation (2 percent), drainage (2 percent), sanitation (1 percent), health (1 percent), and street lights (1 percent) received less than 10 percent combined of the funds. This trend also seems to support social divisions and caste politics. Almost all the community halls are named after a particular caste of the relevant locality.

Not only did MPs seem to choose the projects that enhance their political career (like community halls for favoured castes) but the net effect of the way MPLADS are used is to deprive poor areas of the projects and funding that they need. For example, MPs from Northern Karnataka, where the needs are far greater than in the rest of the state, spent a smaller percentage of their funds than their colleagues from more affluent areas. MPs from poorer regions, like Northern Karnataka, only utilized an average of 47 percent of available funds, while their counterparts from Southern Karnataka, a more developed region, utilized 63 percent of the funds.

It’s interesting to note that MPs with lower education qualifications used their MPLADS funds better, in terms of actual spending them, compared to MPs with higher education qualifications. Only MPs with matriculation and with pre-university course qualification managed to utilize 100 percent of MPLADS funds allocated. MPs with university degrees and post graduate qualifications were generally not able to utilize as much of their funds. One MP with a PhD qualification managed to utilize only 26 percent of the allocated funds. This could be because MPs with less education are more dependent on their political careers than MPs with higher educational qualifications.

Click here for PAC’s full report.

Read about the many other governance problems associated with CDFs:

What is wrong with Constituency Development Funds – Albert van Zyl

Constituency Development Funds: Are they constitutional? – Christina Murray