- Impact of COVID-19 on economies across globes, including India:
- The virus has horrifying effect on the economies across the world
- India already had a slow economic growth in the present quarter, the advent of the pandemic will weaken the economy further.
- The Indian government has announced a lockdown amongst other measures to limit the spread of the virus.
- This article talks about the decision of Central government to cut the salaries of the MP’s by 30%:
- The center has taken a bold step by promulgating an ordinance to cut the salaries of the MP’s by 30%.
- This came into effect from 1st April and will continue for a year.
- The Cabinet has also approved the temporary suspension of the MPLAD (Members of Parliament Local Area Development Scheme) Fund during 2020-21 & 2021-22.
- The said amount cut from the salaries of MPs will go to the Consolidated fund of India.
- What was the salaries of MPs before such a move was take?
- MP is entitled to receive a salary of Rs 1 lakh per month during the whole term of his/her office.
- In addition to this, every MP gets an allowance of Rs. 2000 per day.
- In 2018, the then finance minister late Arun Jaitley had announced a hike in the salaries of the President, Vice President and Governors of states for the first time in 12 years.
- Before this revision, the remuneration of an MP included a basic salary of Rs 50,000 per month, and a constituency allowance of Rs 45,000, apart from other perks.
- The Centre spends Rs 2.7 lakh on an MP a month and the Parliament has a total of 795 members – 545 in the Lok Sabha and 250 in the Rajya Sabha.
- The move to cut the salaries of the Member of the Parliament is a welcome move as this shows that the lawmakers and the top government officials of the country stands with the country in such a tough time.
- Even though the current move is beneficial, it does not resolve the issue of dilapidating economy.
The impact of coronavirus has been horrifying and its chilling effects can be seen throughout the world. While the virus has a very evident and alarming effect on the human life, it has also affected the global economy and caused enough profound and serious damage. Such an effect on the economy has gotten the policymakers thinking of different ways to respond to such a crisis. The biggest issue that the countries are facing today is to manage the spread of this pandemic whilst keeping their economies on track. In United States the number of people filing for unemployment has hit a record high. In China, where the coronavirus first appeared, industrial production, sales and investments, all fell in the first two months of the year, compared with the same period in 2019. With countries all across the world banning air travel in a move to curb the spread of COVID-19, economy has taken a tough blow. And to combat such issues, different countries are adopting different measure. In India, the economy was already weakened to an eight year low this quarter and now, with the advent of a pandemic, there are reports that it will slow even more sharply in the next six months.
Handling the spread of COVID-19 has been the first and foremost duty of every country. In India, Prime Minister Narendra Modi announced on March 24th that the country would be going on a complete lockdown for 21 days. While the lockdown may have been necessary to limit the spread of the coronavirus, it will have a detrimental effect on businesses and a long-lasting effect on the economy. Another drastic but a welcome measure taken by the government is the decision to cut the salaries of Members of Parliament (MPs) by 30% for a year. This decision was communicated by Union Minister Prakash Javadekar in a presser. The cabinet has promulgated an ordinance to the same effect. Along with the PM and lawmakers, President Ram Nath Kovind, Vice-President Venkaiah Naidu and Governors of all states have also voluntarily decided to forgo part of their salaries. This decision was taken in a Union Cabinet meeting where this said ordinance was approved so as to reduce the salaries, allowances and pensions. According to Prakash Javadekar, the amount saved after cutting down the salaries will be utilized in the fight against coronavirus.
It is reported that the money would be added to the Consolidated Funds of India. The Consolidated Fund of India has been established under the aegis of Article 226(1) of the Indian Constitution. All revenues received by the government by way of direct taxes and indirect taxes, money borrowed and receipts from loans given by the government flow into the Consolidated Fund of India.All government expenditure is made from this fund. In the present case, the amount received will thus be added to this consolidated fund and then the money will be used by the government for expenditure related to COVID-19.
The Cabinet also approved the temporary suspension of the MPLAD (Members of Parliament Local Area Development Scheme) Fund during 2020-21 & 2021-22. The consolidated amount of MPLAD Funds for 2 years - Rs 7900 crores - will go to Consolidated Fund of India. This twin move will release Rs 7,900 crore to combat the disease. However, this move has not gone well with the opposition with several congress functionaries protesting that this will impact the ongoing development works in their constituencies and affect people directly.
The Information and Broadcasting ministry has told the media that President Ram Nath Kovind, Vice-President Venkaiah Naidu and governors of states have already voluntarily offered to take 30% pay cute 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.
WHAT WAS THE SALARY OF MP’s BEFORE THIS MOVE?
According to the latest revision to the Salary, Allowances and Pension of Members of Parliament Act, 1954, which was done in 2018, an MP is entitled to receive a salary of Rs 1 lakh per month during the whole term of his/her office – five years for a Lok Sabha MP, and six years for a Rajya Sabha member. In addition to this, every MP gets an allowance of Rs. 2000 per day. In 2018, the then finance minister late Arun Jaitley had announced a hike in the salaries of the President, Vice President and Governors of states for the first time in 12 years. He had also announced that the salary and daily allowance of members shall be increased after every five years, staring April 1, 2023 on the basis of Cost Inflation Index provided under the IT Act.Before this revision, the remuneration of an MP included a basic salary of Rs 50,000 per month, and a constituency allowance of Rs 45,000, apart from other perks.The Centre spends Rs 2.7 lakh on an MP a month and the Parliament has a total of 795 members – 545 in the Lok Sabha and 250 inthe Rajya Sabha.Similarly, the salaries of the President and the Vice President were increased from Rs 1.5 lakh and Rs 1.25 lakh per month to Rs 5 lakh and Rs 4 lakh per month respectively. The Governors’ salary was increased to Rs 3.5 lakh per month.
The move to cut the salaries of the Member of the Parliament is a welcome move as this shows that the lawmakers and the top government officials of the country, stands with its population in a time of health and economic crisis. This move is also essential as cutting wages by 30% would result in accumulation of a fair amount in the Consolidated fund. This decision was taken after PM Modi asked BJP workers to prepare for a long fight against coronavirus. Prime Minister Narendra Modi had even said that,“The country and its people can't afford to get tired or rest in this long war”. Such a move can be taken as aninspiration for other citizens of the country so that they donate in order to fight COVID-19. Even though the current move is beneficial, it does not resolve the issue of dilapidating economy. The government has to take stricter measures or else along with a weakened economy, we might also have issues such as large-scale displacement, unemployment and increased poverty levels.