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  • Anagha S.

MP Discretionary Funds: Balancing Development and Accountability

What is the MP Discretion fund

The Member of Parliament (MP) Discretion Fund, also known as the ‘Constituency Development Fund’ (CDF) or ‘Local Area Development Fund’, has become a pivotal aspect of parliamentary systems globally. This fund equips MPs with resources to tackle local development needs, thereby fostering grassroots progress and improving constituents' well-being. Nevertheless, the wide discretion granted to MPs raises concerns regarding accountability, transparency and the equitable distribution of resources. MP Discretionary Funds represent financial allocations provided to MPs for discretionary expenditure within their constituencies. These funds offer MPs the flexibility to address local needs and initiate development projects based on their insights and understanding of local realities. Prioritizing projects based on community needs is essential, requiring MPs to strike a balance between immediate urgent and long-term development objectives. MP Discretionary Funds refer to the financial resources allocated to Members of Parliament (MPs) for discretionary use within their constituencies. Balancing short-term urgencies with long-term development goals requires thoughtful decision-making. If we investigate the allocation aspect, ensuring that funds reach all sections of society is crucial. MPs should avoid favouritism and allocate resources fairly across different areas within their constituencies.

 Allocation and Utilization

Each MP receives an annual allocation of Rs. 5 Crore under the Members of Parliament Local Area Development Scheme (MPLADS). Unlike MPLADS, which has specific guidelines and focuses on community assets, MP Discretionary Funds allow MPs to allocate resources without rigid restrictions. Certain portions of the fund should be mandated to be used for the welfare of Scheduled caste and scheduled tribe communities and this varies from state to state.  MPs can utilize these funds for a wide range of purposes, including:

  • Emergency Relief - Providing immediate assistance during natural disasters, accidents, or other crises.

  • Local Infrastructure- Supporting small-scale infrastructure projects such as roads, bridges, schools, and health centres.

  • Social Welfare- Initiatives related to education, healthcare, sanitation, and livelihood improvement.

  • Community Development-Encouraging local entrepreneurship, cultural activities, and sports.

  • Individual Cases- Assisting constituents facing exceptional circumstances.

Challenges and Accountability

The inherent flexibility of  MP Discretionary Funds presents both opportunities and challenges in local development initiatives. While these funds empower legislators to address urgent needs within their constituencies, they also pose significant concerns regarding transparency and accountability. A primary challenge associated with these funds arises from the lack of clear guidelines governing their allocation and utilization. Without transparent and standardized criteria, there is a risk of arbitrary decision-making, potentially resulting in unequal distribution or even the misuse of funds for personal or political purposes.

The absence of stringent guidelines can exacerbate issues related to favouritism or nepotism, where certain projects or individuals may receive preferential treatment over others. This undermines principles of fairness and equity and erodes public trust in the integrity of the fund allocation process. Additionally, without proper oversight mechanisms in place, there is limited assurance that allocated funds are being effectively used to address genuine community needs and priorities. Ensuring the proper utilization of MP Discretionary Funds and guarding against potential abuses requires the implementation of robust monitoring and accountability mechanisms. This includes establishing clear reporting requirements for MPs regarding fund allocation and expenditure, as well as mechanisms for independent audits to verify process integrity. Moreover, mechanisms for public scrutiny and feedback can enhance transparency and accountability by enabling constituents to monitor project progress and raise concerns about perceived discrepancies or irregularities.

Promoting transparency in the decision-making process regarding fund allocation is crucial for fostering public confidence and trust. This can be achieved by publishing detailed guidelines outlining eligibility criteria, the application process, and the rationale behind funding decisions. By enhancing transparency and accountability, MPs can demonstrate their commitment to responsible management of public resources and ensure that MP Discretionary Funds are effectively used to promote the welfare and development of their constituents.

 Recent usage of MP discretion funds by states

In some states, the discretionary fund limit for Chief Ministers (CMs) and MLAs has been increased. For instance, in Madhya Pradesh, the MLA development fund has been raised to Rs. 2.5 Crore. These changes aim to empower elected representatives but also necessitate vigilance to prevent misuse.

MP Discretionary Funds play a crucial role in addressing local needs promptly. Balancing discretion with transparency remains a challenge, emphasizing the importance of effective governance and citizen oversight. While the MPLADS scheme has facilitated development in many areas, there have been instances where funds remained unutilized. For instance, in 2014-15, not a single rupee was spent in 278 constituencies (51% of total constituencies) and 223 MPs did not recommend any amount. The scheme’s suspension during the COVID-19 pandemic aimed to redirect funds for pandemic management efforts. It remains crucial for MPs to use these funds effectively for the upliftment of their constituencies.

In  Kerala, MPs receive a substantial sum of 17 crores over five years through the MP discretion fund. As their tenure nears its end, a significant portion of these funds remains unutilized. For instance, the Mavelikkara MP still has approximately Rs. 7 Crore left, while the Kottayam MP has nearly exhausted their allocation, leaving a mere Rs. 2 Lakh balance. This discrepancy highlights a concerning lack of oversight in fund utilization. Despite these funds being earmarked for local development, the populace isn't reaping the benefits adequately. This raises serious questions about the state's governance and accountability.


The MP Discretionary Fund, with its adaptability and empowerment of legislators to tackle local development needs, plays a pivotal role in nurturing grassroots progress and enhancing constituents' welfare. Nevertheless, this fund also presents notable hurdles concerning openness, responsibility and fair distribution of resources. The MP Discretionary Fund constitutes a valuable instrument for local development endeavours, yet its effectiveness relies on transparent governance, citizen vigilance, and prudent management of public resources. By confronting these obstacles and championing transparency, MPs can fulfil their duty of representing and meeting the requirements of their constituents, thereby contributing to the promotion of democratic governance and the advancement of fair development agendas.

About the Author

Anagha S is a first-year MA in Public Policy student at the Jindal School for Government and Public Policy at OP Jindal Global University. She has a profound interest in researching governance law, and minority studies.


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