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The cost of India's MPs

India’s MPs have given themselves a threefold hike in salary, now earning 68 times the country’s average salary. But no conditions of service have changed. In the USA, for example, members of Congress cannot earn more than 15% from outside of their Congressional salary. In India, the average assets of 304 MPs who contested in 2004 and then re-contested in 2009 grew 300%!

On August 27, 2010, Indian Members of Parliament voted themselves a threefold hike in their basic salary, from Rs 16,000 to Rs 50,000 and doubled the constituency and office expense allowances to 40,000 each. MPs will thus receive an assured income of Rs 1.3 lakh (a salary of Rs 50,000 plus constituency allowance of Rs 40,000 and office or stationary allowance of Rs 40,000) a month.

The repayable advance for purchase of a vehicle will go up from Rs 1 lakh to Rs 4 lakh with cheaper interest rate on the loan. The pension for former MPs will go up from Rs. 8,000 to Rs 20,000 a month.

The increase in the salaries of MPs and pension to former MPs would cost the government an additional Rs103.76 crore every year. The increase in the daily, constituency and office expenditure allowances will cost the government an additional Rs 38.50 crore every year.

An MP’s wage is tax-free and comes with additional perquisites such as free petrol, free telephone calls and free housing, some of it in the most expensive real estate in the country’s capital. Most household expenses – furniture, electricity, water, laundry - is also paid for by the State. MPs can travel anywhere in the country by rail, first class, and get 34 free air tickets for themselves or a companion a year. Spouses of MPs can travel free by air from their residence to New Delhi eight times a year when Parliament is in session and unlimited number of times by rail. 

MPs also get a daily allowance of Rs 1,000 per day to attend Parliament and Rs 2 crore a year to spend on development of their constituencies as they see fit, a practice that many consider unconstitutional though the Supreme Court has upheld it.

Significantly, during the debate that preceded the passing of the Salary, Allowance and Pension of Members of Parliament (Amendment) Bill, 2010, some parliamentarians voiced the opinion that an independent body should be set up to decide on the future pay of MPs as there had been considerable public criticism of the fact that MPs were possibly the only section of society that decide their own salary increases.

Compared to developing countries, Indian MPs have unparalled freedom to fix their own salaries and perks. In France and Japan, salaries of MPs are determined in relation to the salaries of the highest paid bureaucrats. In Germany, Article 48 (3) of the Basic Law says that the members of Bundestag will get remuneration adequate enough to ensure their independence. In Switzerland, parliamentarians do not get any salary or allowance. They just get paid leave from their employers on the days of session.

In Mexico, MPs are paid handsomely, but they cannot do any business or practise any profession. They cannot even be officebearers of any political party. In the USA, members of Congress cannot earn more than 15% from outside of their Congressional salary. There is no such bar on the MPs or MLAs in India. As Neerja Choudhury, political editor of the New Indian Express pointed out in an article, MPs do not even have to answer for any conflict of interest. An MP who has a defence equipment business is allowed to be on a defence committee which formulates defence policy and a parliamentarian who has aviation interests to be on a civil aviation committee, thereby making policy changes which benefit them individually.

In the UK, the Review Body on Senior Salaries established by law, advises the prime minister on the pay and pensions of MPs, ministers, judges, defence personnel, senior civil officers and other such high posts. It is an independent body consisting of non-MPs who have served in high positions in the judicial and managerial offices with distinction. Several MPs in the recent salary debate in India have suggested an independent body to rule on the issue and the UK body could serve as a model. Former Lok Sabha Speaker Somnath Chatterjee has suggested that there should be a salary commission or a pay commission to decide MPs’ salary.

The wildly fluctuating salary demands from Indian MPs underline the need for such an objective agency. Some MPs have been demanding that their salaries be more than that of top bureaucrats. Two former chief ministers and leaders of their respective parties, Mulayam Singh Yadav and Lalu Prasad Yadav, demanded a 500% hike in salaries for MPs and stalled proceedings in Parliament during the debate on the current salary increase. They wanted the basic salary to be fixed at Rs 80,001, one rupee more than the salary of a secretary in the Government of India. However, while most MPs run businesses from where they derive income, for bureaucrats, their salaries are usually their sole source of income. Moreover, while a bureaucrat gets pension after serving for 30-35 years, an MP is entitled to pension even if he has spent just one day in Parliament. Nor do bureaucrats get a daily allowance for attending office every day as MPs do for attending Parliament.

Much of the criticism of the salaries of MPs springs from the fact that the electorate – which incidentally puts them in power – does not think they are doing a good job. It has been pointed out that there is very little debate on most bills in the House unless a particular party has some interest at stake or can derive mileage from the issue. Private members bills are rare. The last one that was made into an Act was in 1970. Public perception of MPs using their positions to make money for themselves also adds to the indignation when MPs vote themselves a salary hike. Moreover, some 150 MPs elected last year have criminal cases against them, with 73 very serious cases ranging from rape to murder.

Writing in the Times of India, journalist, filmmaker and one-time Rajya Sabha MP, Pritish Nandy, estimates that today, out of 543 MPs in the Lok Sabha or Lower House, 315 or 60% are crorepatis or millionaires. Forty-three out of the 54 Rajya Sabha MPs elected last year are also millionaires. Their average declared assets are over Rs 25 crore each. The assets of the average Lok Sabha MP have grown from Rs 1.86 crore in the last House to Rs 5.33 crore, an increase of 200%. Nandy also says that MPs become richer in office. The average assets of 304 MPs who contested in 2004 and then re-contested in 2009 grew 300%. Over 33% of those with assets above Rs 5 crore won the last elections while 99.5% of those with assets below Rs 10 lakhs lost!

The feudal mindset that still pervades among large sections of India’s population, accepts that top politicians are entitled to be treated like the maharajahs of old, who have it in their power to dole out all sorts of favours to their subjects like admissions to schools, water or gas connections, letters of recommendation for jobs or concessions. The intelligentsia is angered at this attitude but can do little. 

Few people oppose decent salaries for MPs. Up until 1968, MPs used to receive a monthly salary of Rs 400 and another Rs 31 as daily allowance. From 1969 to 1985, they were entitled to Rs 500 as salary and Rs 51 daily allowance. In 1985, the salary was revised to Rs 1,500. Pension for MPs was introduced in 1977. The last salary revision took place three years ago.

However, this may not be the best time for MPs to vote themselves increases in pay when the country is reeling under inflation and the prime minister himself has been critical of high corporate salaries and asked government officials to curtail expenses on foreign trips, hotel accommodation etc.

 “After all that we are going through (crushing inflation), to see our elected representatives proposing a price hike for themselves is quite disheartening but not totally unexpected,” Rajesh Ranjan, 37, a cart puller in Delhi told Sify.com in a survey of what common people thought of the hike. His views were echoed by Ranjana Kumari, director of the Centre for Social Research: “The proposed salary hike is uncalled for and shows the insensitivity of the MPs to the problems of the poor. When funding for essential projects is becoming scarce, this hike is an unjustifiable extravagance at the expense of the taxpayer.”

There is a school of thought that believes the salaries of MPs should be high, higher even than at present maybe, but the perks and ability to grant favours must be eliminated or severely curbed. Providing houses in Lutyens’ Delhi, for instance, is a needless expense, when most states maintain an MPs hostel where out of town MPs can stay when Parliament is in session. 

There is also the question of proportion - comparing the salary of MPs with the people they claim to represent. According to one calculation, after the hikes of the MPs’ salaries, perks and allowances, they will earn 68 times more than what an average person earns annually.

SALARY AND ALLOWANCES OF PARLIAMENTARIANS
  OLD NEW
Monthly salary 16,000 50,000
Daily allowance (to attend Parliament or committee meetings)  1,000 2,000
Constituency allowance per month 20,000 40,000
Office expenses per month 20,000 40,000
# Washing allowance (for sofa covers and curtains)  once in three months
# Furniture allowance: ' 60,000 per annum for durable and Rs 15,000 for non-durable furniture
PENSION AND PERKS
  OLD NEW
Monthly pension 8,000 20,000
Pension for every additional year 500 1,500
Interest-free loan for vehicles 1,00,000 4,00,000
Road mileage rate for vehicles (per km) 13 16
# Free telephone calls up from 100,000 to 150,000
# Accommodation in Delhi with 4,000 kl of water and 50,000 units of electricity every year
# Reimbursement of expenses incurred on tiles in
kitchen and bathrooms
# Travel for spouse: Earlier limited of two trips in the Budget session and one in other sessions removed
Source: Business Standard, August 21, 2010

Infochange News & Features, September 20, 2010