Lok Sabha passes bill to deduct 30% salary of MPs for a year

The parliament passes the Bill to reduce the salaries and allowances of ministers to meet with the outbreak of the Covid-19. This reduction is for a period of one year starting from 1 April 2020. This ordinance amended two Acts:

  • The salary, allowances, and pension of members of Parliament Act, 1954. Under which the salaries of MPs have a reduction of 30%.
  • The salaries and allowances of Ministers Act, 1952. Under which the sumptuary allowances of Ministers have a reduction of 30%.

Impact of this Amendment

This reduction in salaries and allowances of MPs and Ministers will lead a trivial effect on the resources required to fight with the Covid-19. The amount of reduction is only 54 crores. And, this amount is only 0.001% of the special package, which the Govt announce in the month of May to fight with the Coronavirus outbreak.

Who decides the Salaries?

 Article 106 of the constitution of India, empowers the MPs to determine their salaries, which leads to conflicting interests. In 2010 this issue was discussed in the parliament that an MP should not be involved while deciding their salaries. And, the Govt should set an independent mechanism.

In 2018, to solve this issue to an extent, the Parliament amended the method of deciding the salaries through the Finance Act, 2018. According to it, the Salaries, Allowances, and pensions will increase every five years according to the cost inflation index provided under the Income Tax Act. This amendment ensures regular revision and reduces the conflict of interests.

Position in other Countries

The other democracies are also facing this problem. Some of the countries have appointed Independent authorities like Australia & the UK and some of the countries pin it to the scale of salaries of senior civil servants like France. America decides the salaries of its legislators through a law passed by the Parliament.

India provides the other allowances like house facilities in addition to the salary. But the US and UK do not provide the housing facility but provide the office space only.    

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