Supreme Court: In the petition dealing with the legality of the Vidhayak Nidhi Scheme in the State of Uttar Pradesh which provides for annual budgetary grants to Members of the Legislative Assembly and Legislative Council for facilitating development work in their constituencies, the Court said that the Scheme does not per se violate Article 243ZD or the U P Planning and Developmental Act, 1999 as the elected representatives have a vital role in democracy.
The 3-judge bench of T.S. Thakur, CJ and A.M. Khanwilkar and Dr. D.Y. Chandrachud, JJ, however, said that certain safeguards which form a part of the Members of Parliament Local Area Development (MPLAD) Scheme should be duly considered so as to ensure that the role which is ascribed to the district planning authorities and institutions of local self-governance is not denuded. The following guidelines were issued by the Court:
- the role of the elected representatives would be to recommend the work of a developmental nature in their constituencies within the budget allotted under the Scheme;
- the feasibility of the work, estimate of funds, selection of the implementing agency and supervision of work must be independently determined by a nominated authority or body of the State government;
- panchayati raj institutions in rural areas and municipal bodies in urban areas may be considered as preferred implementing agencies having regard to the entrustment of responsibilities under Parts IX and IXA of the Constitution;
- the plans prepared by the District Planning Committees under Article 243ZD read with the U P District Planning Committee Act, 1999 may be made available by every district Collector to elected representatives to enable them to decide whether any developmental work which has already been identified in the above plan should be executed in pursuance of the funds made available under the Vidhayak Nidhi Scheme; and
- sufficient safeguards should be provided to ensure against conflicts of interest such as the allocation of funds to institutions controlled by an elected representative or a member of his or her family; and
- The scheme must include sufficient safeguards to ensure financial transparency, such as proper supervision of work, monitoring quality and timely completion besides procedures to ensure proper audit and utilization of funds.
The Court was of the view that the guidelines which have been formulated by the State Government should be revisited and the directions set out above should be complied with so as to ensure that the guidelines are in conformity with the spirit and underlying purpose of Parts IX and IXA of the Constitution in terms as held by the Constitution Bench of this Court in Bhim Singh v. Union of India, (2010) 5 SCC 538. It was directed that the revised guidelines should apply to all projects to be undertaken hereafter under the Vidhayak Nidhi Scheme not later than a period of two months. [Lok Prahari v. State of U.P., 2016 SCC OnLine SC 1290, decided on 21.11.2016]