Following the recommendation of the Election Commission (EC), the President disqualified 20 MLAs of the Delhi Legislative Assembly last month for holding an ‘office of profit’. The legislators in question were appointed as parliamentary secretaries to various ministries in the Delhi government. The Delhi High Court is currently hearing a petition filed by the disqualified MLAs against the EC’s recommendation. There have been reports of parliamentary secretaries being appointed in 20 states in the past with court judgments striking down these appointments in several cases. In this context, we discuss the law on holding an ‘office of profit’.
What is the concept of ‘office of profit’?
MPs and MLAs, as members of the legislature, hold the government accountable for its work. The essence of disqualification under the office of profit law is if legislators holds an ‘office of profit’ under the government, they might be susceptible to government influence, and may not discharge their constitutional mandate fairly. The intent is that there should be no conflict between the duties and interests of an elected member. Hence, the office of profit law simply seeks to enforce a basic feature of the Constitution- the principle of separation of power between the legislature and the executive.
According to the definition, what constitutes an ‘office of profit’?
The law does not clearly define what constitutes an office of profit but the definition has evolved over the years with interpretations made in various court judgments. An office of profit has been interpreted to be a position that brings to the office-holder some financial gain, or advantage, or benefit. The amount of such profit is immaterial.
In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment. Several factors are considered in this determination including factors such as: (i) whether the government is the appointing authority, (ii) whether the government has the power to terminate the appointment, (iii) whether the government determines the remuneration, (iv) what is the source of remuneration, and (v) the power that comes with the position.
What does the Constitution say about holding an ‘office of profit’? Can exemptions be granted under the law?
Under the provisions of Article 102 (1) and Article 191 (1) of the Constitution, an MP or an MLA (or an MLC) is barred from holding any office of profit under the central or state government. The articles clarify that “a person shall not be deemed to hold an office of profit under the government of India or the government of any state by reason only that he is a minister”. The Constitution specifies that the number of ministers including the Chief Minister has to be within 15% of the total number of members of the assembly (10% in the case of Delhi, which is a union territory with legislature).
Provisions of Articles 102 and 191 also protect a legislator occupying a government position if the office in question has been made immune to disqualification by law. In the recent past, several state legislatures have enacted laws exempting certain offices from the purview of office of profit. Parliament has also enacted the Parliament (Prevention of Disqualification) Act, 1959, which has been amended several times to expand the exempted list.
Is there a bar on how many offices can be exempted from the purview of the law?
There is no bar on how many offices can be exempted from the purview of the law.
It was reported in 2015 that all 60 MLAs of the Nagaland Assembly had joined the ruling alliance. The Nagaland Chief Minister appointed 26 legislators as parliamentary secretaries in July 2017. Goa, an assembly of 40 MLAs, exempted more than 50 offices by means of an ordinance issued in June last year. Puducherry, an assembly of 33 MLAs, exempted more than 60 offices by passing an amendment bill in 2009. In Delhi, the 21 parliamentary secretaries added to the seven ministerial posts would constitute 40% of the 70-member legislature. In all, 20 states have similar provisions.
This raises an important concern. If a large number of legislators are appointed to such offices, their role in scrutinising the work of the government may be impaired. Thus, this could contravene the spirit of Articles 102 and 191 of the Constitution.
What is the debate around making appointments to the office of parliamentary secretaries?
Interestingly, the appointment of legislators as parliamentary secretaries, in spite of the office being exempted from purview of the office of profit law, has been struck down by courts in several states.
Why has the appointment as a parliamentary secretary been struck down while other offices are allowed to be exempt from the purview of the law? If legislators can be accommodated in positions other than ‘parliamentary secretary’, why do state governments continue to appoint legislators as parliamentary secretaries instead of appointing them to other offices?
These questions have been answered in a Calcutta High Court judgment in 2015 which held that since the position may confer the rank of a junior minister on the legislator, the appointment of MLAs as parliamentary secretaries was an attempt by state governments to bypass the constitutional ceiling on the number of ministers. In 2009, the Bombay High Court also held that appointing parliamentary secretaries of the rank and status of a Cabinet Minister is in violation of Article 164 (1A) of the Constitution. The Article specifies that the number of ministers including the Chief Minister should not exceed 15% of the total number of members in the assembly.
This week, the centre issued two Ordinances to amend: (i) the Salary, Allowances, and Pension of Members of Parliament Act, 1954 to reduce the salaries of MPs by 30% for a period of one year, and (ii) the Salaries and Allowances of Ministers Act, 1952, to reduce the sumptuary allowance of Ministers by 30% for one year. The government also amended the rules notified under the 1954 Act to reduce certain allowances of MPs for one year, and suspended the MPLAD Scheme for two years. These changes are being made to supplement the financial resources of the centre to tackle the COVID-19 pandemic. These amendments raise larger questions on the effect they have on the capacity of the state to fight the pandemic, and the way in which salaries of MPs should be determined.
Overview of Amendments
The 1954 Act lays out the salary and various allowances that an MP is entitled to during their term in Parliament and also provides pension to former MPs. MPs receive a salary of one lakh rupees per month, along with compensation for official expenses through various allowances. These include a daily allowance for attending Parliament, constituency allowance and office expense allowance. Under the first Ordinance, the salaries of MPs are being reduced by 30%. Further, the constituency allowance and office expense allowance are being reduced by Rs 21,000 and Rs 6,000, respectively.
The 1952 Act regulates the salaries and other allowances of Ministers (including the Prime Minister). The Act provides for the payment of a monthly sumptuary allowance (for expenditure incurred in entertaining visitors) at different rates to the Prime Minister, Cabinet Ministers, Ministers of State, and Deputy Ministers. The second Ordinance is reducing the sumptuary allowances of Ministers by 30%.
Note that the 1952 Act pegs the salaries, and daily and constituency allowances of Ministers to the rates specified for an MP under the 1954 Act. Similar provisions apply to presiding officers of both Houses (other than Chairman of Rajya Sabha) who are regulated by a different Act. Therefore, the amendments to the salaries and constituency allowance of MPs will also apply to Ministers, Speaker and Deputy Speaker of Lok Sabha, and Deputy Chairman of Rajya Sabha. The salary of the Chairman of Rajya Sabha will continue to remain unaffected by the Ordinances (Rs 4 lakh per month).
Further, since 1993, MPs can also identify projects and sanction certain funds every year for public works in their constituencies under the Members of Parliament and Local Area Development (MPLAD) Scheme, 1993. Since 2011-12, each MP can spend up to Rs five crore per year under the scheme. The Union Cabinet has approved the suspension of the MPLAD Scheme for two years. Table 1 below compares the changes in salaries, allowances and MPLAD entitlements of MPs.
Table 1: Comparison of changes in the salaries, allowances and MPLAD entitlements of MPs
|
Feature |
Previous entitlement (in Rs per month) |
New entitlement (in Rs per month) |
Changes for the period of |
|
|
Salary |
1,00,000 |
70,000 |
One year |
|
|
Constituency allowance |
70,000 |
49,000 |
One year |
|
|
Office allowance |
60,000 |
54,000 |
One year |
|
|
Of which |
Office expenses |
20,000 |
14,000 |
- |
|
|
Secretarial assistance |
40,000 |
40,000 |
- |
|
Sumptuary allowance of Prime Minister |
3,000 |
2,100 |
One year |
|
|
Sumptuary allowance of Cabinet Ministers |
2,000 |
1,400 |
One year |
|
|
Sumptuary allowance of Ministers of State |
1,000 |
700 |
One year |
|
|
Sumptuary allowance of Deputy Ministers |
600 |
420 |
One year |
|
|
Funds under MPLAD Scheme |
5 crore |
NIL |
Two years |
|
Sources: 2020 Ordinances; Members of Parliament (Constituency Allowance) Amendment Rules, 2020; Members of Parliament (Office Expense Allowance) Amendment Rules, 2020; “Cabinet approves Non-operation of MPLADs for two years (2020-21 and 2021-22) for managing COVID 19”, Press Information Bureau, Cabinet, April 6, 2020; PRS.
Effect of amendments on resources to fight COVID-19
The proposed reduction to the salaries and allowances of MPs and Ministers amounts to savings of around Rs 55 crore, and the suspension of the MPLAD scheme is expected to save Rs 7800 crore. These measures comprise 0.03% and 4.5% respectively, of the estimated amount required to fight the immediate economic distress unleashed due to COVID. Government has estimated Rs 1.7 lakh crore as the requirement for COVID relief measures under the Pradhan Mantri Garib Kalyan Yojana. Therefore, such measures to decrease MP salaries and allowances toward increasing the pool of funds for fighting the pandemic are likely to have an almost negligible impact.
How might MP salaries be set
Each MP is required to represent the interests of his constituents, formulate legislation on important national matters, hold the government accountable, and ensure efficient allocation of public resources. The salary and office allowance of an MP must be assessed in light of the responsibilities expected to be discharged by them. Ensuring MPs are reasonably compensated in terms of salaries allows MPs the means to be able to discharge their duties devotedly, enables them to make decisions in an independent manner and guarantees that citizens from all walks of life can stand a chance of running for Parliament. The question remains – who decides what is reasonable compensation for MPs.
Currently, MPs in India decide their own salaries which is passed in the form of an Act of Parliament. MPs setting their own pay leads to a conflict of interest. A way to resolve this is by setting up an independent commission to determine that salaries of MPs. This is a practice followed in certain democracies, such as New Zealand and United Kingdom. In some other countries, it is pegged to annual wage rate index such as Canada. Table 2 lists various methods used in some other countries to set salaries for legislators.
Table 2: Methods for setting salaries in different democracies
|
Countries |
Process of determining salary of legislators |
|
India |
Parliament decides by passing an Act. |
|
Australia |
Remuneration Tribunal decides the salary. This is revised annually. |
|
New Zealand |
Remuneration Authority decides the salary. This is revised annually. |
|
UK |
Independent Parliamentary Standards Authority sets the pay annually as per the changes in average earnings in the public sector given by the Office for National Statistics. |
|
Canada |
Member’s pay is adjusted each year to federal government’s annual wage rate index. |
|
Germany |
Based on income of a judge of the highest federal court and adjusted annually by the Parliament. |
Sources: Various government websites of respective countries; PRS.
India has experience with appointing independent commissions to examine the emoluments of government officials. The central government periodically sets up pay commissions to review and recommend changes to the wage structure of government employees with a view to attract talent to government services. The latest Central Pay Commission was constituted in 2014 to decides the emoluments of central government employees, armed forces personnel, employees of statutory bodies, and officers and employees of the Supreme Court. Typically, the Commissions have been chaired by a former Judge of the Supreme Court, and have included members representing government service and independent experts.
Suspending MPLADS
In contrast to these amendments, the suspension of the MPLAD Scheme is a positive step.
The MPLAD Scheme (MPLADS) was introduced in December 1993 to enable legislators to address local developmental problems for their constituents. MPLADS allows legislators to earmark up to five crore rupees every year on public works projects in their constituency and recommend these projects to the district authorities for implementation. Typically, funds under the MPLADS are expended on construction or installation of public facilities (such as school buildings, roads, and electrical facilities), supply of equipment (such as, computers in educational institutions) and sanitation projects.
In 2010, a five-judge bench of the Supreme Court decided a challenge to the constitutionality of the MPLADS. It was argued that MPLADS violates the concept of separation of powers between the executive and the legislature since it provides the MP with executive powers on local public works. The Court ruled that there was no violation of the principle of separation of powers because the role of an MP in this case is recommendatory and the actual work is carried out by the local authorities.
However, the Scheme has undermined the role of an MP as a national-level policy maker. The role of an MP is to determine whether government’s budgetary allocations across development priorities are appropriate and once the money is sanctioned by Parliament is it being spent in an efficient and efficacious manner. However, focus on local administration-level issues, such as development of roads or sanitation projects, obscures the role of the MP in conducting oversight. Another fall out of having MPs responsible for MPLADS is that it skews the expectations of citizens have of their MPs – holding them accountable for resolving local development issues rather than broader policy and legislative decision making. The suspension of MPLADs will allow for MPs to focus on their role in Parliament.
The Ordinance route
Through these Ordinances, the executive has amended the salaries and allowances of MPs and Ministers. In principle, Parliament is discharged with law-making powers. In exceptional circumstances, the Constitution permits the executive to make laws through Ordinances if Parliament is not in session and immediate action is required. The two Ordinances will have to be ratified by Parliament within six weeks of its sitting in order to continue to have the force of law. Interestingly, India is one of the few countries, apart from Bangladesh and Pakistan, that vests the executive with authority to make laws, even if temporary in nature.
The Ordinance amending the salaries of MPs also raises a question on whether it is appropriate that the executive has the power to amend the emoluments of MPs – how would this affect the independence of the legislature which is tasked with holding the executive accountable.
