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Salaries and Allowances of Ministers (Amendment) Bill, 2020: Reduction of Salary Upto 30%

calendar08 Oct, 2020
timeReading Time: 2 Minutes
Salaries and Allowances of Ministers (Amendment) Bill, 2020and Allowances of Ministers Amendment Bill

The Salaries and Allowances of Ministers (Amendment) Bill, 2020 has been passed by the Rajya Sabha on 18/09/2020 and Lok Sabha on Sep 20, 2020. The Bill regulates the salaries and allowance of the active minister including the PM. The Bill supersedes the Salaries and Allowances of Ministers (Amendment) Ordinance, 2020.

Key Highlights of Salaries and Allowances of Ministers (Amendment) Bill, 2020

The Bill reduces:-

  • The salaries of Member of Parliament by thirty percent.
  • Sumptuary allowances of active minster by thirty percent.
  • Office expenses allowance and constituency allowance were notified under the 1954 Act. 
  • These amendments have been made effective from 1/04/2020 and are supposed to serve one year from the aforesaid date.
  • These changes are being made in the purview of the COVID 19 pandemic to render financial support to the center. 

Read our article:Latest Highlights on the Industrial Relations Code Bill, 2020

Limitation Associated with the Bill

  • The constitution allows the Members of Parliament to decide their salaries as well as allowances bypassing the law. This results in a conflict of interest.
  • The proposed reduction is less likely to make any sort of impact on the financial resources requires to combat COVID-19. 

The given table depicts the changes made to the salaries and allowances of Ministers and MP against the previous entitlements.

Feature Previous entitlement  (monthly basis) New entitlement as per Bill (monthly basis)
Salary  1,00,000 70,000
Allowance (Constituency) 70,000 49,000
Allowance (Office expense) 60,000 54,000
1. Office expenses 20,000 14,000
 2. Secretarial assistance 40,000 40,000
Sumptuary allowance of PM 3,000 2,100
Sumptuary allowance of Cabinet Ministers 2,000 1,400
Sumptuary allowance of Ministers of State 1,000 700
Sumptuary allowance of Deputy Ministers 600 420

Historical Context of the Legal Status

Article 106 confers the right to the MPs to decide their emoluments bypassing the law. Till the year 2018, Members of parliaments passed laws for the revision of their salaries periodically. This gradually created conflicts amongst other members who were against such a provision. In 2010, while confronting the issue in Lok Sabha, several Members of Parliament suggested amending the mechanism of setting up MPs emoluments by excluding parliamentary committee and MPs.

Moving forward, in the year 2018, Parliament made some changes to the aforesaid law via Finance Act, 2018 to overcome the conflict. The Finance Act, 2018[1] advocates the periodic increment of MPs salaries and allowances against the cost inflation index mentioned under the IT Act, 1961. 

The Salaries and Allowances of Ministers (Amendment) Bill, 2020 advocates the reduction of MPs’ salaries which is proposed to help the government to spare considerable capital to put their fight against the COVID 19 pandemic.  

Conclusion

Indeed the Salaries and Allowances of Ministers Amendment Bill have it significant as it involves all the MP to contribute to the common cause. But technically it won’t be able to cope up with the current situation considering the fact that this saving (54 crores to be exact) is just 0.001% of the special economic package introduced by the government in the purview of the COVID 19 outbreak.

Read our article:An Outlook on the Code on Social Security, 2020: Latest

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