New Delhi: The 24 per cent increase in salaries of MPs to Rs 1,24 lakh a month, announced on Monday, is part of a structured mechanism, set up after the Finance Act of 2018 amended the Salaries, Allowances, and Pension of Members of Parliament Act, 1954, to link MPs’ salaries to inflation, specifically using the Cost Inflation Index (CII), according to a senior official.
Before this amendment, salary revisions were conducted on an ad hoc basis and required parliamentary approval each time. The amendment aimed to depoliticise the process and introduce a systematic mechanism for salary adjustments, the official said.
In 2016, it was Prime Minister Narendra Modi’s view that MPs should not decide their pay package and decisions on such matters should either be taken by a body similar to the Pay Commission or that it be linked to hikes given to certain posts and ranks from time to time.
It was based on this strong view of the Prime Minister that the salary revision mechanism for MPs was changed from a discretionary decision by Parliament to a structured adjustment linked to inflation. The mechanism introduced in 2018 ensures a fair and transparent approach to salary revisions, preventing arbitrary increases, and ensuring financial prudence, the official said.
The last revision before the 2018 amendment took place in 2010, when Parliament passed a bill to increase MPs’ monthly salaries from Rs 16,000 to Rs 50,000. This decision led to significant public criticism, as many perceived it as MPs granting themselves a threefold pay hike.
However, some MPs, including Mulayam Singh Yadav and Lalu Prasad Yadav, argued that the increase was insufficient and demanded at least a five-fold rise in salaries.
Under the revised mechanism, MPs’ salaries are now automatically adjusted every five years based on the Cost Inflation Index. The base salary in 2018 was set at Rs 1 lakh per month, with additional allowances, including a constituency allowance of Rs 70,000 and a daily allowance of Rs 2,000, along with other benefits such as free housing, travel, and utilities.
Now, as per the Cost Inflation Index, MPs will receive a salary of Rs 1.24 lakh per month – a 24 per cent increase over a seven-year period, which translates to an average annual increase of approximately 3.1 per cent.
This process ensures that salary revisions are objective and transparent, relying on an established economic indicator rather than arbitrary decisions.
Consequently, salary adjustments occur systematically without the need for repeated parliamentary debates or political interventions.
As an extraordinary measure during the Covid-19 pandemic, the government also implemented a 30 per cent salary reduction for MPs and ministers in April 2020 for a duration of 1 year. This decision was taken to supplement the financial resources of the central government in tackling the pandemic, the official pointed out.
The temporary reduction was aimed at ensuring that funds were available to support India’s efforts to combat the crisis and provide relief to the public. The cut applied to all MPs, including ministers, and remained in place for a year.
(IANS)
