A massive hike of Rs three crore in the annual allocation for a scheme that enables every MP to recommend development works in their constituencies, was approved by the government on Thursday.

The decision to increase the annual allocation for the members of Parliament local area development scheme (MPLADS) from Rs two crore to Rs five crore for each MP from 2011-12, was taken at the meeting of the union cabinet, chaired by prime minister Manmohan Singh, information and broadcasting minister Ambika Soni told reporters here.

The move would cost the exchequer an additional Rs 2,370 crore annually, raising the total expenditure from Rs 1,580 crore to Rs 3,950 crore per annum. The hike has been made effective from April one this year.

Soni said the move came in view of demands made by MPs in the Parliament to raise the allocation.

"This augmentation will result in better fulfilment of the needs of the people and creation of durable community assets based on locally-felt needs," she said. This asset creation has been taking place in areas of national priority like drinking water, sanitation, education and public health.

Asked why was the hike felt necessary, she said the rise in prices was adversely affecting the scheme and the developmental projects.

Responding to a question, she allayed apprehensions regarding corruption and said the MPs have themselves resolved that they would closely monitor implementation of the projects they have recommended and there were several monitoring mechanisms at the state and local levels besides the RTI Act.