Lok Sabha Passes Bill to reduce salaries of MPs by 30%

September 16, 2020

The Salary, Allowances and Pension of Members of Parliament (Amendment) Bill, 2020 was passed by the Lok Sabha. The bill seeks to cut salaries of MPs by 30%.

Key Facts

Currently, each MP draws a monthly salary of ₹1 lakh, ₹70,000 as constituency allowance and ₹60,000 for running office besides other perks as per the pay hike in 2018.
30% Salary Cut is applicable to all MPs, including the Prime Minister and the Council of Ministers, for the financial year 2020-2021.
The President and Vice-President of India along with all the State Governors, have also decided to cut their salary by 30%.
The amendment would only cut MPs’ salaries but not the allowances or the pensions of ex-MPs.
The bill replaces the Salaries and Allowances of Ministers (Amendment) ordinance, 2020.
The bill also amends the Salaries, Allowances and Pension of Members of Parliament Act, 1954

Concerns

The amendments would have a negligible impact on the financial resources with total collection would be 0.001% of the special economic package of Rs 20 lakh crores.

Legislation

Article 106 of the constitution of India empowers the MPs to determine salaries and allowances by enacting laws.

Background information

Suspension of MPLADS

Earlier, it was decided to suspend The MPLADS scheme as well. Under the provision, the amount saved from the scheme would be redirected to the Consolidation Fund. Many MPs earlier had already pledged to use their MPLADS funds for efforts to combat the coronavirus pandemic.

Members of Parliament Local Area Development Scheme (MPLADS)

The scheme was announced in December 1993 under the nodal ministry- the Ministry of Rural Development. In October 1994, the scheme was transferred to the Ministry of Statistics and Programme Implementation. The scheme enables MPs to recommend developmental works that needs to be taken up in their Constituencies. It is a Central Sector Scheme and the annual MPLADS fund entitlement per MP per constituency is ₹5 crore.

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