The following piece by C V Madhukar appeared in the September,2011 issue of Governance Now magazine. The debate in Parliament in response to the recent Anna Hazare led agitation demanding a strong Lok Pal Bill was a fine hour for the institution of Parliament. What was even more important about the debate is that it was watched by thousands of people across the country many of whom have lost faith in the ability of our MPs to coherently articulate their point of view on substantive issues. Of course, in many cases some of these impressions about our MPs are largely formed by what the media channels tend to project, and without a full appreciation of what actually happens in Parliament. There is now a greater awareness about an important institutional mechanism called the standing committee, and other nuances about the law making process. The Lok Pal agitation brought out another important aspect of our democracy. There are still many in India who believe that peaceful protest is a powerful way to communicate the expectations of people to the government. Our elected representatives are prepared to respond collectively when such protests are held. There is a negotiated settlement possible between the agitating citizens and our political establishment within the broad construct of our Constitution. All of this means that the safety valves in our democracy are still somewhat functional, despite its many shortcomings. But the way the whole Lok Pal episode has played out so far raises a number of important questions about the functioning of our political parties and our Parliamentary system. A fundamental question is the extent to which our elected MPs are able to ‘represent’ the concerns of the people in Parliament. It has been obvious for some time now, that corruption at various levels has been a concern for many. For months before the showdown in August, there have been public expressions of the disenchantment of the people about this problem. Even though several MPs would say privately that it is time for them to do something about it as elected representatives, they were unable to come together in a way to show the people that they were serious about the issue, or that they could collectively do something significant about the problem. The government was trying in its own way to grapple with the problem, and was unable to seize the initiative, expect for a last minute effort to find a graceful way out of the immediate problem on hand. In our governance system as outlined in our Constitution, the primary and most important institution to hold the government accountable is the Parliament. To perform this role, the Parliament has a number of institutional mechanisms that have evolved over the years. The creation of the CAG as a Constitutional body that provides inputs to Parliament, the Public Accounts Committee in Parliament, the question hour in Parliament are some of the ways in which the government is held to account. Clearly all of these mechanisms together are unable to adequately do the work of overseeing the government that our MPs have been tasked with. But it is one thing for our MPs to be effective in their role holding the government to account, and a very different thing to come across collectively as being responsive to the concerns of the people. For our MPs to play their representation role more convincingly and meaningfully there are certain issues that need to be addressed. A major concern is about how our political parties are structured, where MPs are bound by tight party discipline. In a system where the party leadership decides who gets the party ticket to contest the next election, there is a natural incentive for MPs to toe the party line, even within their party forums. This is often at the cost of their personal conviction about certain issues, and may sometimes be against what the citizens could want their representatives to do. Add to this the party whip system, under which each MP has to vote along the party line or face the risk of losing his seat in Parliament. And then of course, if some MP decides to take a stand on some issue, he needs to do all the research work on his own because our elected representatives have no staff with this capability. This deadly cocktail of negative incentives, just makes it very easy for the MP to mostly just follow the party line. If the representation function were to be taken somewhat seriously, these issues need to be addressed. The 2004 World Development Report of the World Bank was focussed on accountability. An important idea in the report was that it was too costly and inefficient for people to vote a government in and wait till the next election to hold the government accountable by voting it out for the poor governance it provides. That is the reason it is essential for governments and citizens to develop ways in which processes can be developed by which the government can be held accountable even during its tenure. The myriad efforts by government such as social audits, monitoring and evaluation efforts within government departments, efforts by Parliament to hold the government accountable, efforts of civil society groups, are all ways of holding the government to account. But over and above accountability, in an age of growing aspirations and increasing transparency, our MPs must find new ways of asserting their views and those people that they seek to represent in our Parliament. This is an age which expects our politicians to be responsive, but in a responsible way. Even as the Lok Pal Bill is being deliberated upon in the standing committee, civil society groups continue to watch how MPs will come out on this Bill. There are plenty of other opportunities where MPs and Parliament can take the initiative, including electoral reforms, funding of elections, black money, etc. It remains to be seen whether our MPs will lead on these issues from the front, or will choose to be led by others. This will determine whether in the perception of the public the collective stock of our MPs will rise or continue to deplete in the months ahead.
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.
