The Indian government has announced a 24% salary hike for Members of Parliament (MPs), effective from April 1, 2023, raising their monthly pay from ₹1 lakh to ₹1.24 lakh. This adjustment has also increased daily allowances from ₹2,000 to ₹2,500, constituency allowances from ₹70,000 to ₹87,000, and office expenses from ₹60,000 to ₹75,000.
MP Pensions Also Increased
The central government has also increased the pensions of former MPs. Now, their pensions have risen from ₹25,000 to ₹31,000, with additional pensions for extended service increasing from ₹2,000 to ₹2,500 per month. This marks the first revision since 2018, when MP salaries doubled from ₹50,000 to ₹1 lakh, with a new rule linking future hikes to inflation every five years.
MP Salary Revision Sparks Debate
The adjustment, based on the Cost Inflation Index under the Income Tax Act of 1961, and notified by the Ministry of Parliamentary Affairs, aims to align MPs’ earnings with rising living costs. However, it has sparked debate over income disparity, as the average Indian earns just ₹15,000 monthly, while each MP now costs the exchequer ₹42.9 lakh annually, including allowances and perks.
Assets Of Parliamentarians On The Rise
Adding context, a Business Standard piece revealed a 93% increase in Lok Sabha candidates with assets over ₹1 crore winning elections between 2004 and 2019, per the Association for Democratic Reforms. The average assets of MPs grew from ₹5.3 crore in 2004 to ₹46.3 crore in 2024, and the number of 'crorepatis' in the Lok Sabha now stands at 504 of 543.
Several commentators have pointed to this trend, coupled with the salary hike, raising questions about the need for the latest hike. However, those on the other side of the fence, argued that salary hike is needed to ensure fair compensation for MPs.
The COVID-19 Salary Cut
In 2020, COVID-19 pandemic saw MPs’ salaries temporarily slashed by 30%, a move later reversed, showing the government’s responsiveness to economic crises.
