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EXPLAINED : THE SALARIES AND ALLOWANCES OF MINISTERS (AMENDMENT) BILL, 2020

EXPLAINED : THE SALARIES AND ALLOWANCES OF MINISTERS (AMENDMENT) BILL, 2020

Key features of the Bill

  • It replaces the The Salaries and Allowances of Ministers (Amendment) Ordinance, 2020.
  • It seeks to amend (i) the Salary, Allowances, and Pension of Members of Parliament Act, 1954 to reduce the salaries of MPs by 30%, and (ii) the Salaries and Allowances of Ministers Act, 1952, to reduce the sumptuary allowance of Ministers by 30%.
  • It also seeks to amend the Rules notified under the 1954 Act to reduce certain allowances of MPs for one year, which includes constituency allowance and office expenses allowance. 
  • These changes have been made for a period of one year effective from April 1, 2020.
  • These reductions are being made to supplement the financial resources of the centre to tackle the COVID-19 pandemic.

About Salary and Allowance of Members

  • Members of either House of Parliament are entitled to receive such salaries and allowances as may be determined by Parliament, and there is no provision of pension in the Constitution
  • Article 106 of the Constitution empowers MPs to determine their salaries and allowances by enacting laws. Till 2018, Parliament periodically passed laws to revise the salaries of MPs.
  •  In 2018 through the Finance Act, Parliament amended the law setting the salary for MPs. 

Countries

Different mechanisms for determining the salary of legislators

Salary indexed to inflation

India

Increased every five years, on the basis of the cost inflation index

Canada

Adjusted annually as per the average consumer price index of the previous year

Salary set by an Independent Authority

United Kingdom

Composed of a former MP, former judge, and auditor; salary revised annually as per the average public sector earnings

Australia

Composed of experts in government, economics, law, and public administration; salary revised annually

New Zealand

Composed of judges, MPs, and members of independent statutory bodies; based on the legislator’s position in Parliament

 

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