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Hike MPs' salaries, take away housing

Here's my suggestion. Let a handful of ministers keep their homes (in Britain, it is the PM, Finance Minister and a few others) for official purposes but take away all the other accommodation. Rent it out to the general public. It will generate hundreds of crores every month. Vir Sanghvi writes.

columns Updated: Aug 22, 2010 00:21 IST
Vir Sanghvi
Vir Sanghvi
Hindustan Times

It is hard to conduct a rational conversation about MPs' salaries. The MPs themselves can often display a slightly nauseating sense of entitlement (witness the parliamentary dramas of the last week) and the rest of us frequently react with anger and irritation. Our contempt for politicians is so great that we often feel that even if they were paid five rupees a year, they would already be overpaid.

Though the Indian responses are more extreme, citizens of other democracies often react the same way. Any proposal to raise the salaries of British MPs evokes so much derision that political parties are reluctant to introduce it.

So, our responses are neither unique nor unpredictable. But they are also — or so I would suggest — penny-wise and pound-foolish. We elect MPs and ministers to make crucial decisions running into billions of rupees on our behalf. It makes no sense to continue to allow them to make those multi-billion rupee decisions while quibbling about giving them a few thousands more each month. If you give a man the right to spend money on your behalf then common sense dictates that you must make sure that he earns an adequate amount himself.

But I think MPs are also being foolish when they insist that they should be paid more than secretaries to the government. An MP's job is an important one but it is, almost by definition, only a part-time one. Not only do many MPs continue to run businesses, hold administrative posts in political parties, make movies, work at their day jobs etc. few of them will be MPs for most of their working lives. Secretaries to the government of India, however, have spent over 30 years in a variety of low-level jobs before reaching these posts. Their secretary-level jobs are the pinnacles of their long careers.

So you cannot reasonably make out a case based on anything other than a sense of self-entitlement for the position that MPs deserve to earn more than secretaries. Nor is this an international practice. In Britain, for instance, top government servants earn far more than MPs.

Despite the behaviour of some MPs in Parliament over the last week, I have to say that broadly, I'm on their side on the pay-hike issue.

Before the hike went into effect, MPs were paid R16,000 a month. Those of us who work in offices need only look around and see how much our colleagues earn. R16,000 is not a bad salary for a very junior person but few people in middle-management would earn as little as that in today's India. And no matter how much contempt we have for politicians, few of us would argue that MPs who pass laws which affect our lives are in the same category as very junior management.

However, once we agree that R16,000 was too little, the situation gets more complicated. MPs argue, in private conversation, that if a man is not paid enough to run his household, then he will have no choice but to be corrupt.

Upto a point this is reasonable. Our political system already forces MPs to take money from businessmen: to fight elections, to pay their workers etc. Within politics, some MPs make a psychic distinction: if they use this money for personal expenses, it is corruption; but if they use it for politics, then it is entirely legitimate to do so.

This is a slightly dodgy distinction anyway. And once MPs find they cannot meet their household expenses, it is the easiest thing in the world to lose sight of the dividing line and to start living on money provided by businessmen.

In that sense, if you pay an MP (or a minister) too little, you are encouraging him to become corrupt.

This is a valid argument but two qualifications need to be made. One is that, contrary to what you may think, there are many, many honest MPs in India who struggle to get by on their salaries. Nor is it true that such politicians do not get very far. The examples of Manmohan Singh and A.K. Antony (to name just two) remind us that it is possible to be an honest politician in India and to still rise to the top.

The other problem with this argument is that the primary motivation for corruption these days does not seem to be necessity. It is greed.

If you look at the biggest crooks in Parliament you will find that many were already rich (or well-off at any rate) when they entered politics. And once politicians start making money, nothing stops them; certainly no salary hike will make a difference to their greed.

Even the argument that rich businessmen make honest politicians because they have no need of money has been exploded by recent experience. Rich businessmen can be the most corrupt because — unlike ordinary politicians — they understand money, know how to make deals with other businessmen, realise how big a bribe to ask for and know how to hide the money once they've made it.

So, I do not accept that there is a straightforward equivalence between higher salaries and less corruption. But I still support the hike because: anybody who makes such important decisions deserves a better wage. Very low salaries offer an incentive to dig into funds meant for politics. And you cannot keep saying, as we all do, that good people should join politics and then insist that politicians are denied reasonable salaries.

But there is one further qualification to my argument — and it is an important one.

If you look at most calculations of MPs' real incomes (i.e. salary plus perks) you will find that the numbers are inflated by the accommodation factor. Much is made of the other perks (telephones, office expenses, air tickets etc.) but these do not worry me. When we work out our own salaries, we do not add the cost of official phone-calls, work-related travel etc. (and surely, MPs must be expected to visit their own constituencies).

Accommodation is the big one. MPs either get fancy bungalows or nice flats within governmental Delhi. The bungalows would cost upwards of R5 lakh a month, and even the flats would cost over a lakh or two per month.

This is a peculiarly Indian perk. In Britain, for instance, MPs don't get government housing. Nor do most ministers, for that matter.

So, here's my suggestion. Let a handful of ministers keep their homes (in Britain, it is the PM, Finance Minister and a few others) for official purposes but take away all the other accommodation. Rent it out to the general public. It will generate hundreds of crores every month.

Use this money to pay MPs' salaries that are on a par with the private sector, and let them find their own accommodation the way the rest of us do. That way they cost the taxpayer nothing extra.

It's a fair suggestion. But what's the betting that our MPs love their houses too much to ever consider it?

The views expressed by the author are personal.

First Published: Aug 21, 2010 22:05 IST