Delhi MLAs' local area fund slashed to ₹5 crore; BJP, AAP trade barbs
The annual allocation for a legislator under the MLA Local Area Development (MLA-LAD) Fund has been slashed from ₹15 crore to ₹5 crore for the 2025-26 financial year. A decision to this effect was taken by the Delhi cabinet chaired by chief minister Rekha Gupta on May 2, said officials aware of the development.
'In pursuance of Cabinet Decision No. 3187 dated 02.05.2025, the allocation of fund under MLA-LAD scheme has been kept to ₹5 crore per Assembly constituency per year from 2025–26 onwards,' stated a government order issued on May 9 and signed by deputy secretary Arvind Jain. 'This will be an untied fund and can be spent on approved capital works as well as repairs and maintenance of assets, without a ceiling.'
On October 10, 2024, the then Delhi cabinet under Aam Aadmi Party (AAP) had approved a 50% hike in MLA-LAD funds, increasing the annual allocation to MLAs from ₹10 crore to ₹15 crore, just months before the 2025 Delhi assembly polls. But the BJP secured a thumping majority in Delhi assembly winning 48 of 70 seats and reducing AAP to just 22 seats.
First introduced in Delhi in 1994–95 and modelled on the MP Local Area Development Scheme, the MLA-LAD scheme allows elected representatives to recommend public works aimed at improving infrastructure in their constituencies — including roads, street lighting, drainage, and other civic amenities. The fund is routed through the urban development department as part of Delhi's annual budget.
Launched in 1994-95 at 1 crore per MLA, the MLA-LAD fund cap rose to ₹4 crore in 2011-12, jumped to ₹10 crore per constituency after a Cabinet decision on 7 August 2018, and was lifted again to 15 crore on 10 October 2024, according to an official document seen by HT.
The move has sparked political sparring, with BJP MLAs criticising the AAP for its handling of the scheme during its tenure.
The AAP, meanwhile, accused the BJP of failing to prioritise development after coming to power.
In the years leading up to the 2025 elections, the scheme had seen a patchy trajectory, according to BJP leaders. Party MLA and chief whip Abhay Verma insisted that the new allocation was actually an improvement over the AAP's early years.
'In 2020–21, the AAP government didn't release any funds under the MLA-LAD scheme due to Covid. In 2021–22 and 2022–23, it gave ₹4 crore each year to every MLA, totalling ₹8 crore for the two years. In 2023–24, it allocated ₹7 crore, and in 2024–25, ₹15 crore per MLA. So over five years, the AAP government gave ₹30 crore to each MLA,' said Abhay Verma, the BJP's chief whip in the Delhi Assembly.
'The BJP government is giving more than the previous government to MLAs. It's common practice for the MLA-LAD fund to increase over time. We expect that over five years, MLAs will receive more than the ₹30 crore given by the AAP government,' said Verma.
'Under AAP government, the MLA-LAD funds were misused by AAP MLAs rather than actually being spent on infrastructure. The AAP misled the people on these funds from the beginning — the government never provided the promised amount to be spent in constituencies,' alleged a BJP MLA who requested anonymity.
Still, some BJP MLAs expressed dismay over the new government's decision to slash the allocation. 'We finally have the mandate to deliver, and residents have high expectations. Wherever we go, people hand over lists of pending works,' said another BJP MLA. 'With ₹5 crore, it won't be enough. Now, we'll need to route projects through multiple agencies instead of executing them directly.'
AAP leaders, however, rejected the claim that they underfunded development. Matia Mahal MLA Aaley Mohammad Iqbal said the BJP's decision to cut the allocation would harm not just legislators but constituents across the city. 'With inflation so high, ₹5 crore is barely enough to fund basic repairs, let alone build anything new. All 70 constituencies will suffer,' he said. 'The fund should be restored to ₹15 crore annually.'
The budget for the MLA-LAD Fund has been scaled down accordingly — from ₹400 crore in 2024–25 to ₹349 crore in 2025–26.
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