The season of salary hikes has finally arrived for the country's leaders. After waiting for more than two years, MPs receive a salary increase. With a 24% bump, the basic salary now goes from INR 1 lakh to INR 1.24 lakh. But the good news for MPs doesn’t end here. This increment is retroactive to April 2023, granting them dues of INR 5.76 lakh by March 31st.
The Ministry of Parliamentary Affairs issued a gazette notification on March 24, announcing the increased salaries and allowances for MPs. The daily allowance (during parliamentary sessions) has been raised from INR 2,000 to INR 2,500. Monthly pensions also see a 24% increase, going from INR 25,000 to INR 31,000. Additional pensions for every year of service beyond five years have been raised from INR 2,000 to INR 2,500 per month. The last revision for MPs’ salaries and allowances was in 2018.
MPs vs. Average Indians
However, this time, there’s no mention of a hike in constituency and office allowances. Should the 24% increase apply, those would rise from INR 70,000 to INR 86,800 (constituency) and from INR 60,000 to INR 74,400 (office expenses).
Source: aajtak
An MP will now earn INR 2.54 lakh monthly, amounting to INR 30.48 lakh annually. Given India’s per capita income was INR 1.72 lakh for 2022-23, an average MP earns about 17 times the monthly income of an average Indian. Assuming each of the three parliamentary sessions lasts 30 days, MPs will also gain INR 2.25 lakh more annually through daily allowances.
Benefits and Allowances
These represent just a portion of the perks MPs receive. They enjoy free medical services for themselves and their family, rent-free housing in Delhi or a monthly housing allowance of INR 200,000, plus 50,000 units of free electricity, 4,000 kiloliters of free water, and phone and internet reimbursements. MPs can also claim annual reimbursement for 34 domestic air travel segments, unlimited first-class train travel for themselves and family, and mileage for road travel within constituencies.
Source: aajtak
Inflation and Salaries
In India, wage growth in both private and public sectors often lags behind inflation, leading to stagnant or even reduced real income. In the early 2000s, inflation averaged around 5-6% annually, but surged in the early 2010s to over 10% in 2013. However, by the decade's end, inflation rates stabilized between 3-5%. Recently, in 2023, the annual inflation rate was 5.65%, with February's inflation rate dropping to 3.61%.
Between 2019 and 2023, various sectors saw pay increases range from 0.8% to 5.4% while inflation fluctuated between 3.73% and 6.7%, eroding purchasing power.
Pay Commission Recommendations and Salaries
The public sector hasn't fared better. MP basic salaries have seen substantial growth over the years, often outpacing central pay commission recommendations. In 2006, MPs received a 33.3% pay hike while the 6th Pay Commission approved a 54% increase for government staff.
Source: aajtak
The 2010 revision stood out, with MP salaries increasing by 212.5% without any pay commission recommendations. In 2018, under the 7th pay commission (2016), MPs' salaries doubled compared to the 14.3% hike for government employees. The most recent 2023 hike saw another 24% increase outside the pay commission framework.
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These salaries and benefits place a significant burden on the state treasury. A 2018 RTI by the Association for Democratic Reforms (ADR) revealed INR 1,997 crore was spent on the salaries and allowances of Lok Sabha and Rajya Sabha MPs from 2014-15 to 2017-18. On average, each Lok Sabha MP earned INR 71.29 lakh annually, while each Rajya Sabha MP earned INR 44.33 lakh.
With inflation driving up fuel and airfare costs, the state treasury faces increased pressure. For example, Delhi’s petrol price rose dramatically from INR 69.04 per liter in 2018 to nearly INR 95 per liter, an increase of 37%.
93% of Lok Sabha MPs are Millionaires
According to ADR, out of 543 elected representatives in the 18th Lok Sabha, 504 are millionaires, comprising 93% of MPs. This figure makes it the wealthiest Lok Sabha to date, with elected MPs’ average assets increasing over sevenfold from INR 5.35 crore in 2009 to INR 46.34 crore in 2024. The recent salary hikes add to their wealth, contributing to more millionaire MPs in the country.
Source: aajtak
Previous Salaries and Allowances
In 2018, MPs’ monthly salaries were doubled to INR 100,000, constituency allowances increased from INR 45,000 to INR 70,000, and office expenditure allowances rose from INR 45,000 to INR 60,000. Ex-MPs’ pensions increased from INR 20,000 to INR 25,000 monthly. Earlier, in 2006, MPs' basic salaries went from INR 12,000 to INR 16,000, a 33% increase, while constituency allowances doubled from INR 10,000 to INR 20,000, and daily allowances rose from INR 500 to INR 1,000. Office allowances saw an increase from INR 14,000 to INR 23,000.
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An unprecedented rise occurred in 2010 when monthly salaries more than tripled to INR 50,000, and daily allowances were doubled. Constituency and office expense allowances both more than doubled to INR 45,000 monthly. Ex-MPs’ pensions also increased from INR 8,000 to INR 20,000 per month. However, 2020 was exceptional when MPs faced a 30% salary cut from INR 1 lakh to INR 70,000, with allowances also reduced as a year-long fiscal responsibility measure during the COVID-19 pandemic.
(With inputs from Namrata Dadwal)
