MPs' 'take home' salary Rs 45 lakh a year

NEW DELHI: MPs on Friday responded to the Cabinet approving a 200% hike in their basic salary—from Rs 16,000 to Rs 50,000—by creating a furore in Lok Sabha. MPs have pegged the discourse on a salary hike to the basic component—one of the 16 parts of their compensation package—of Rs 16,000 per month, or Rs 1.92 lakh a year. This is grossly misleading. If values are imputed to the other 15 components of an MP’s package, it works out to—hold your breath—Rs 45 lakh a year. And this is a conservative estimate.

MPs stay in prime locales. They fly business class. They, along with spouse and attendant, are allowed unlimited AC rail travel. Their basic domestic and all working expenses are taken care of. Anil Bairwal, national co-ordinator for the Association of Democratic Reforms (ADR), says it’s a myth that MPs get paid Rs 16,000 a month. “They don’t have to pay for water, electricity, telephone, even Internet or travel. It’s more or less free and the citizens pay for it,” he said. ADR, an NGO that works towards strengthening democracy and governance, was founded by a group of IIM and NID faculty.

This is how companies calculate compensation, or what is called ‘cost to company’. By a similar logic, the ‘cost to government’—by extension, ‘cost to taxpayers’—for an MP’s salary would work out to about Rs 45 lakh. Under the terms approved by the Cabinet, it would be Rs 60 lakh, or 10 times their basic salary.

This is less than what the parliamentary committee on salaries and allowances wanted. It wanted the basic salary to be increased to Rs 80,000 per month and other perks to be revalued. This would have roughly worked out to a gross package of Rs 67 lakh a year.

The clamour of MPs for a raise comes at a time when their productivity has slid. In 2009, Lok Sabha was convened for a mere 64 days, a number steadily falling from the 151 sittings in 1956. They passed 30 legislative bills, but hardly discussed or debated them. In the winter session alone, eight bills were cleared in less than five minutes.


“An MP’s role is to make laws, exercise control over the executive to see that the laws are implemented, and formulate macro-level public policy,” says former Union minister Suresh Prabhu. “But MPs don’t do these things and believe vocal chords are more crucial than mental faculties. If their compensation can be linked to their deliverables, the gains in the country’s governance would nullify the higher outgo.”

What skews the argument against them is that most MPs—there are, however, exceptions—are extremely wealthy, as their affidavits with the Election Commission show. ADR pegs the average assets of a Lok Sabha MP at Rs 4-5 crore, even after excluding three MPs with assets of over Rs 100 crore from the calculation.

There are MPs who are not that wealthy, and could do with more support from the system. The odds are stacked against the not-so-rich politician. In the 2009 Lok Sabha polls, just 0.43% of candidates with less than Rs 10 lakh in assets got elected.