NEW DELHI: The Union Cabinet on Monday approved an ordinance to cut salaries of the Prime Minister, all ministers and sitting MPs by 30% for one year in the wake of the Covid-19 crisis and also decided to suspend the MP Local Area Development Scheme (MPLADS) for two years. The twin moves will release Rs 7,900 crore to combat the disease.
Information and broadcasting minister Prakash Javadekar told the media that President Ram Nath Kovind, Vice-President Venkaiah Naidu and governors of states have also voluntarily offered to take the 30% pay cut as a social responsibility. The move, intended as an austerity measure, reflects the thinking in government that the political class should signal that it is not standing apart from the economic hardship caused to the common people.
The wage cuts will come into effect from April 1 for a year and the suspension of MPLADS fund will be for 2020-21 and 2021-22. The total amount will be transferred into the Consolidated Fund of India. Javadekar said the ordinance route was taken as a salary cut of MPs requires a change in law. He added the Salary, Allowances and Pension of Members of Parliament Act will be amended during the next Parliament session. The suspension of MPLADS, however, did not go down well with the opposition with several Congress functionaries protesting that this will impact ongoing development works in their constituencies and affect people directly.
The government said that most MPs would anyway set aside a substantial part of their constituency funds for Covid-19 mitigation.
Responding to a question on how much would be saved due to 30% salary cut, Javadekar said the amount was not important. “This is a landmark decision that sends the right signals. Many MPs have already announced donation of Rs 1 crore each from their MPLADS fund. Some felt the money under this scheme should be utilised to deal with the pandemic. This is our social responsibility,” he said. There has been concern in the government that if there are layoffs and wage cuts in non-government sectors, the perceived privileges of official jobs will stand out in contrast.
Asked if the Centre was expecting states to take similar decisions of pay cut for MLAs and MLCs, Javadekar said it was a matter for state governments and the Centre could not comment on it. Some states have already decided to do it.
While the Kerala government has decided to cut a month’s salary of all its staffers and this will go to the state disaster relief fund, Telangana, Andhra Pradesh, Odisha and Rajasthan have also announced salary cuts of government employees depending on their rank. Maharashtra has decided to pay salaries in instalments. Karnataka CM B S Yediyurappa has given up a year’s salary.