Bill to temporarily reduce salaries of lawmakers: Peek into the paycheques

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The government has pushed two bills to temporarily reduce salaries and allowances of lawmakers and ministers in view of austerity measures following the Covid-19 pandemic—a good time to take a peek into the actual paycheque prints of our MPs and ministers.

Under Article 106 of the Constitution, Indian lawmakers fix their own salaries. Lok Sabha on Tuesday passed a bill to reduce salaries of lawmakers by 30% for one year. Rajya Sabha will Wednesday take up the Salaries and Allowances of Ministers (Amendment) Bill, 2020 for consideration and passage. The bill amends the Salaries and Allowances of Ministers Act, 1952, the law that stipulates how much ministers, including the Prime Minister, get paid.

The allowances bill cuts by 30% ministers’ monthly sumptuary allowance for a period of one year, effective from April 1, 2020. Sumptuary allowance is the lawmakers’ equivalent of a visitors’ entertainment reimbursement, a common paycheque head in the corporate world. Here are the changes

Lawmakers

The austerity measures mean an MPs “salary” now stands at Rs 70,000 a month, down from Rs 100,000 earlier. The next head in their paycheques is a “constituency allowance”. This is now revised downwards to Rs 49,000 a month from Rs 70,000 a month earlier.

Lawmakers also get an office expense allowance. This will now stand at Rs 54,000 from Rs 60,000 earlier. (Of this, MPs can draw Rs 40,000 as secretarial assistance and Rs 14,000 as office expenses.)

Also Read: Lok Sabha nod to bill for 30% salary cut of MPs for a year due to Covid crisis

Ministers and PM

The Salaries and Allowances of Ministers (Amendment) Bill, 2020 cuts sumptuary allowances. The Prime Minister’s sumptuary allowance has been cut to Rs 2,100 a month from Rs 3,000 a month earlier.

Sumptuary allowance of Cabinet ministers now stands at Rs 1,400 now from Rs 2,000 a month earlier. A similar allowance for ministers of state, or a junior minister, now stands at Rs 700 from Rs 1,000 earlier.

Indian MPs get better perks?

In India, lawmakers revise their salaries every five years, a revision that is indexed to inflation. In countries such as the UK, Australia and New Zealand, MPs’ salaries are fixed by independent authorities, according to the New Delhi-based think tank PRS Legislative Research.

In the UK, the independent authority is composed of a former MP, former judge and an auditor. The salaries are revised annually in accordance with the average public-sector earnings.

Different benchmarks adopted by different countries make a comparison of salaries difficult. The advantage that Indian MPs enjoy are housing, while countries such as UK don’t give MPs accommodation.

“Indian MPs earn far less compared to salaries in the corporate world of senior-level executives,” said Supriya Dutta of executive head-hunder firm CEOTrack.

Also Read: Covid-19: Fake news led to migrants’ exodus, says home ministry

MPs versus other key officials

MPs’ “salary” (excluding allowances) before the current revision stood at Rs 100,000 a month. In comparison, a Supreme Court judge’s salary stands at Rs 2.5 lakh (minus allowances) a month. A secretary to the Union government’s earns a salary of Rs 2.25 lakh a month. The Reserve Bank’s governor’s salary stands at Rs 2.50 lakh.

The reduction to the salaries and allowances of MPs and ministers will save the government Rs 54 crore. “This is less than 0.001% of Rs 20 lakh crore which is the amount of the special economic package announced by the centre, in light of the COVID-19 pandemic,” according to a research note of PRS Legislative.

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