Compensating our MPs
The Union Cabinet decided on Monday to put off approving a hike in the salaries of MPs and ministers. This was something of a surprise because the measure had all party support and the hike was widely regarded as a done deal. And outraged MPs created hell in Parliament as a consequence.
The Cabinet refused to go along with the consensus after a group of ministers cautioned that, in the present climate, ministers and MPs right seem too greedy if they voted themselves a salary hike. “What’s the big hurry?” asked some ministers. As usually happens when there is a divergence of views in the Cabinet, no decision was reached and the matter was deferred.
Whenever politicians vote themselves a hike, the media are always critical. We make the valid point that unlike the rest of us who are dependent on our bosses for salary reviews, MPs depend on nobody. If they want to raise their own salaries they bring a bill before parliament and pass it. Nobody else needs to be consulted.
Consequently, each time MPs or ministers hike their salaries they face a barrage of criticism. Nor is this phenomenon confined to India. Even in the UK, the remuneration of MPs is a subject of great concern, each pay rise is the subject of public outrage and last year, the country was rocked by a scandal over MPs expenses.
Given this background, you can see why the Union Cabinet was reluctant to risk the wrath of the media and by extension, the nation. As it is, things are not going too well for the government. Inflation remains a problem. Kashmir has exploded yet again. The Maoist menace rages unchecked. It staked a lot on a foreign policy initiative with Pakistan that has amounted to nothing. Each session of parliament is rocked by one scandal or another. Given this background, it is not difficult to see why the Cabinet decided that it did not want another controversy on its hands.
Except that I think that the Cabinet was wrong.
The Indian system of remunerating politicians is full of contradictions. For instance, ministers are paid less than middle level executives in the private sector (between Rs 50,000 to 65,000 or so) but are given vast perks. A ministerial bungalow in the heart of Delhi’s Lutyens zone (named after Edwin Lutyens who designed the capital) is given free of rent. But if market rent were to be charged, each bungalow would cost upwards of Rs 5 lakh per month in rent. Add the perks the cars, the free electricity etc. and you end up with another lakh or two per month — at least. So though ministers earn relatively low salaries, there are vast hidden extras that are never valid on.
So, it a lesser extent, is it with MPs. They earn much less, get smaller bungalows and flats and have fewer perks but the value of the perks far outweighs the actual take-home salaries.
Curiously, we are among the few democratic countries to follow such a system. In the UK for instance, a few ministers (the Prime Minister, the Chancellor of the Exchequer etc.) get government housing but the rest have to find their own accommodation. MPs do not get government housing. In the US, the President, the Vice President and perhaps, a few others, get government houses. The rest —members of the cabinet, senators, congressmen etc. —- have to make their own arrangements.
When it comes to perks, these are rigidly monitored. When a British Prime Minister goes to the Palace to resign, he can take his official car. But as soon as he has met the Queen and returned, the driver will say bye and tell him that he is no longer entitled to the car. A few years ago, British MPs opted for a system of reimbursable expenses over a pay rise (fearing a public backlash if salaries were hiked.) Because the expenses were to be claimed in lieu of income, parliament adopted a liberal attitude towards passing claims. But when the details of these expenses were revealed by the press, there was a national outcry and some ministers resigned while many MPs were forced to stand down.
In the UK and the US, they follow a system of paying politicians relatively well but of denying them perks. This has many advantages. If ministers are paid at least as much as senior executives in the private sector, then they have no reason to take money from businessmen. At present, ministerial salaries in India are so low that unless ministers have private incomes (as P Chidambaram, Jyotiraditya Scindia, V Krishna and a few other do), they have difficulty maintaining their households. There are ministers who are scrupulously honest (AK Antony, Manmohan Singh etc.) but the vast majority take the line that they are expected to supplement their income with cash gifts from businessmen.
If it were up to me, I would re-organise the entire system of remuneration for politician. I would pay them decent salaries but I would take away those big houses and those vast untaxed perks. Let ministers and MPs find homes for themselves. It will bring them closer to the people and it will give them some sense of how expensive finding a house has now become.
Of course, there are problems with this solution. What is to be done with the Lutyens bungalows? Hand them over the private sector and these will be demolished to make room for ugly high-rises destroying the character of New Delhi.
Nor is it clear that by paying ministers decent salaries we will necessarily reduce cases of corruption. Some of the most corrupt ministers in this government are already independently wealthy.
Even so, it will still be a step in the right direction. The present system is silly, impractical and based on hypocrisy and lies.