Accounting for performance: MPs need better pay to deliver results

Members of Parliament (MPs) have finally been granted a rise in salary and allowances after five years. The 24 per cent rise in basic pay from ₹1 lakh to ₹1.24 lakh a month with retrospective effect from April 1, 2023, has attracted headlines, as much as the monthly package of ₹2.86 lakh when sundry allowances are added. Apart from the fact that this pay increase is overdue, questions must arise over the exercise to determine MP compensation as much as the adequacy of the pay for the elected representative in a country of India’s size and complexity.

 

When MPs’ salaries were raised in 2018, then finance minister Arun Jaitley introduced a proposal for automatic revision every five years. Though this period aligns with a Lok Sabha term, this term limit is impractical when the cost of living has soared in that period. During 2020, the Covid year, MPs’ salaries were slashed 30 per cent for a year, but old salaries were later restored. Bureaucrats’ salaries are reviewed and adjusted periodically and the same time frame should apply to MPs. Jaitley had also stipulated that the automatic revision of MPs’ emoluments would be linked to the cost-inflation index, which is admittedly a more transparent way of determining pay increases rather than allowing MPs to decide their remuneration on the basis of undefined metrics. The current pay rise, however, does not appear to follow the norm set in 2018. Disaggregated, the current raise works out to 4.8 per cent a year. However, inflation has been on the higher side in recent years.

 

The adequacy of pay for an elected public servant in a democracy also remains an open question. Prima facie, the package of ₹2.86 lakh is roughly on a par with the pay and allowances of the country’s top bureaucrats. But this parity is illusory for several reasons. First, an MP outranks the secretary to the Government of India and, therefore, should be entitled to a higher pay as a matter of principle. Second, the packages are asymmetrical. For a bureaucrat, the consolidated pay levels include basic salary, dearness allowance, and housing and rent allowance. For an MP, the monthly package includes the basic salary, a daily allowance for each day the person attends Parliament, office expenses, and a constituency allowance. Neither the ₹87,000 per month constituency allowance nor the ₹75,000 per month office allowance can be considered earnings since MPs must spend this amount. The office allowance is a means to cover the hiring of a computer-literate assistant at a monthly salary of ₹50,000 and ₹25,000 for stationery.

 

Of course, there are a raft of other benefits that MPs enjoy — such as reimbursement for electricity, water, telephone and internet charges, and accommodation. MPs and their families (and “companions”) are also reimbursed for 34 one-way air tickets from their constituency to Delhi and get benefits on rail travel. Though much is made in the public discourse of the rise in MPs’ private wealth, this is neither here nor there. There are plenty of MPs with a modest background. Rich or poor, MPs need to be compensated better to do their job — honestly and optimally.