Dialogue  April-June, 2006, Volume 7  No. 4

An Elder’s Concern for Development

Nanaji’s Deshmukh

I am writing this letter with a feeling of deep anguish and sorrow, but out of a sense of responsibility.

Our struggle for freedom was long drawn and tortuous. It entailed supreme sacrifices on the part of millions of young men and women. And when it came, it was with a divided India. We opted for parliamentary democracy, incorporating basic tenets of human rights in our Constitution. It provided for different tiers of legislatures to facilitate and ensure responsive and accountable administration at centre and in the states. Unfortunately, we ended up with a political leadership that betrayed the very spirit of democracy and reminds us of the institution of monarchy. Perhaps, worse than that.

Over one-third of our fellow countrymen are toiling under extreme poverty and are deprived of their fundamental rights. About 80 million of our young men and women are groaning under the yoke of unemployment. On the other hand, the political dispensation, particularly, our elected representatives are getting richer and richer. This brings the democracy, we swear by, to disrepute and shame.

It is all the more ironic that while the government is unable to contain the budgetary deficit, and its debt burdens are burgeoning, the so called representatives of the people are shamelessly piling up more burden on the country by increasing their own perks and perquisites. Since tax and non-tax revenues of various governments are virtually exhausted for meeting committed liabilities, they have to resort to both internal and external borrowings to carry out development activities. Development becomes a secondary activity for the government!

The internal and external debts of the Central Government in 2003-04 were Rs. 11,34,020.35 crore and Rs. 47,407.41 crore, respectively, and interest payments alone entailed an outgo of Rs. 1,24,554.92 crore in 2003-04. (See Table 1)

The total current debt burden on the states is also a staggering Rs. 791,400 crores. Every year, these states have to shell out a mind-boggling sum for debt servicing besides their other non-productive activities. This has created a vicious cycle out of which neither the centre not the states are able to wriggle out. (See Table 2)

The following paragraphs, and tables highlight this sorry state of affairs. The law fixing the salaries and allowances admissible to Members of Parliament, enacted in 1954, has undergone 25 revisions/amendments till 2002 with the sole object and intent to improve the structure of salaries, pension and facilities of the Members. Clearly, there has never been an attempt to review the extant scheme or to take a medium or long-term view as the pay commissions try to do in regard to the salary structure of the government employees after every 10 years. Rather, a strong preference for perpetuating adhocism is seen, which is in the interest of beneficiary members. All that is required to make any change (read, upward revision) is the recommendation of a joint committee of both the. House of the Parliament. The approval of the parliament has always been a mere formality, without exception. While there has never been a consensus among different political hues on the issues affecting the welfare of the common man, there is absolute unanimity among all the political parties on this issue, be it the Left, Right or the Centre. No wonder, their salaries and allowances have gone up by 90 times during the last 50 years! A mockery of democracy, isn’t it?

This not only violates the canons of financial propriety, but also a basic dictum of the administrative law that the acceptance of necessity that requires an outgo from the Treasury, is to be examined and approved by an authority other than the body likely to be affected by such decisions. This is nothing but improper usurping of the powers of the authority by the beneficiaries themselves. There is perhaps no parallel to this hijacking of the parliamentary democracy anywhere in the world!

A look at the annexures will indicate that the Government pays in cash in every month to a Member about Rs. 36,000/- including Salary, Daily Allowances etc. of which only the salary of Rs. 12,000/- p.m. attracts income-tax which too, can be easily avoided by some savings in approved Government Schemes. MPs pay a nominal license fee for the accommodation in Delhi, which is but a tiny fraction of their market rental value.

Taking into account, the monetary value of other facilities like free telephone calls (inclusive of STD calls), mobile phone, free electricity and water, medical facilities, free air and rail travel in highest class(es), the direct monthly public expenditure on an M.P. comes to the tune of Rs. 3 lakh, even on a conservative estimate. This is roughly about 150 times of per capita income of an Indian, per annum. There are several other indirect costs also. (See Table 3)

Since State Governments are the mirror images of the Central Government, if the expenditure incurred by the States in providing salaries, allowances, pensions and other facilities to the serving and ex-legislators are taken into account, the cost of the Indian democracy would be colossal since the total number of members of state legislatures and councils is currently 5269. This type of profligacy goes against the very basis of democracy which is to establish an administrative system geared to promote peace, happiness, prosperity and justice for the common man. Let us not forget that monarchy became an object of hatred when the misrule and misuse of authority by the king became unbearable, with rulers spending bulk of the State revenues for their own pleasures and enjoyments and their subjects continued to suffer.

In the 60s, the Government of India had abolished the Privy Purses on the professed ground that its continuance was no longer justified as the princes did not serve any useful public purpose. Much of the privileges and perquisite of the MPs, ex-MPs, ex-PMs, ex-Presidents, ex-Vice Presidents now look more like ‘Privy Purses’ unconnected with any public purpose. It is interesting to note that the expenditure incurred for the Council of Ministers and the Prime Minister in the last year was Rs. 122.52 crores which is nearly half of the expenditure for the Lok Sabha and Rs. 30.29 crores more than the expenditure for the Rajya Sabha. On top of it, the expenditure of Rs. 79.46 crores for the Special Protection Group, if added would make our Council of Ministers, the Parliament and the President; extremely high cost public institutions. (See Table 4)

I do not wish to bring the office of the President into controversy and, therefore, while withholding my comments on his personal emoluments, I cannot refrain myself from expressing my dismay over the magnitude of expenditure incurred on maintaining a palatial and sprawling Rashtrapati Bhawan. While millions of people in the country have no shelter worth name, I cannot see any justification in one person or a family occupying over 350 rooms!

The aforesaid facts and circumstances have contributed to the decline of the Parliament in public esteem. In this context, it is necessary to stress that Articles 79 to 123 which deal with provisions relating to Parliament including Parliamentary privileges do not provide specifically a system of checks and balances which has to operate from within and not without the Parliament. Regrettably, this is still to happen and hence, the urgent need to take the first step, that is to initiate a public debate and enquiry into the issue of salaries and perquisites to prevent the Members of Parliament from being holders of de facto office of profit and to restore its esteem in the public eye.

It is my considered view that if allowed unchecked, this type of indulgence will undermine the very foundation of democracy and erode people’s faith in it. Therefore, my humble request to you all who constitute the opinion makers of the country, is to give serious thought to this matter, raise the issue at appropriate fora in order to establish a proper convention and an institutional mechanism on this subject which should not only be legitimate but appear to be so.

I feel that adoption of a development strategy bereft of people’s initiative and their pro-active role has been responsible for the aforesaid external aid and external and internal loan-dependency-syndrome, and consequent profligacy, corruption and inefficiency. Indeed, revenue meant for the welfare of the people has been gulped by their so-called representatives for their own prosperity.

Nevertheless, I do not want to conclude with a note of despair. The Chitrakoot model of rural development based on self-reliance (swavlamban) through community and individual initiative evolved and implemented by Deendayal Research Institute, has shown that with proper institutional support, our rural communities can resolve not only their internal problems but promote sustainable and scalable development, and self-employment with application of appropriate technology and contemporary market support.

It is high time, the nation adopted a development strategy based on people’s initiative and their pro-active role and a system of governance in which the element of responsibility is inherent for discharging public duties. This will help us realise innate capacity and innovative aptitude of our people to achieve development with social justice and equity and prevent degeneration of democracy. With this, we can achieve high levels of development with minimum of expenditure.

I wish, a meaningful public debate could be initiated on the model of development that the nation should adopt, to eradicate poverty, unemployment, illiteracy, ill-health and social evils. Deendayal Research Institute has evolved such a model where people’s initiative and their role are encouraged. And it is only with this spirit and zeal that 80 villages in the vicinity of Chitrakoot have achieved:





*clean and green villages, and

Significantly, a rare complementarity has been achieved in enabling the poor families, regardless of their caste and religion, to participate in the activities of the Institute, leading to ‘swavlamban’.

These targets have been achieved much earlier than the deadlines that were set for this purpose. The Institute is all set to achieve this target in 500 villages by the turn of this decade. The Institute is all set to achieve this target in 500 villages by the turn of this decade. And this miracle has not been done by any government agency. The people of the area, in close cooperation with ordinary, but selfless and zealous workers of DRI have accomplished this onerous task. The Institute has only been a motivator. Real power lay with the people.

 Some industrialists of old generation will perhaps recall that while renouncing politics in 1977, I had urged the then President of Ficci, Shri Hari Shankar Singhania to organise their active participation in the community development activities. As a result, many of them had also come forward in their individual capacities. However, unfortunately, it could not gather a collective momentum. I once again exhort them to come forward and become active participants in this Mahayagya of Development.



                                                                    1950-51            2003-04

                                                                                             (Rs. Crore)

         Public Debt.                                     2054.33            1181427.76

         External Debt                                   32.03                47407.41

         Other Liabilities                               811.07              543071.06

1.     National Small Saving Fund          336.87              232987.68

2.     State Provident Funds                   95.05                55515.48

3.     Other Accounts                              16.10                167415.26

         (i)   Special Deposits of


                Provident Funds, etc.              …..                   120125.00

         (ii)  Other items                                16.10                47290.26

4.     Reserve Funds and Deposits       363,05              87152.64

         (i)   Bearing interest                        260.85              43501.32

         (ii)  Not bearing interest                 102.20              43651.32

         Total – Liabilities                          2865.40          1724498.82

Amount due from Pakistan on account of share

Of Pre-partition debt (approx.)               - 300.00            -300.00

Net Liabilities of Central Government 2565.40         1724198.82

Excess of Capital Outlay and Loans over Liabilities ….        ….

Total (Net)                                                 2565.40          1724198.82

*Balances are according to book value

Source : Receipts Budget, (2004-2005), Ministry of Finance




S. No.    States                                                              Total Debt.

                                                                                        (Rs. Crore)

      1.     Andhra Pradesh                                            57,574

      2.     Arunachal Pradesh                                       1,118

      3.     Assam                                                             15,043

      4.     Bihar                                                                49,882

      5.     Goa                                                                  3,449

      6.     Gujarat                                                             55,318

      7.     Haryana                                                          19,712

      8.     Himanchal Pradesh                                       13,035

      9.     Jammu and Kashmir                                      11,916

    10.     Karnataka                                                       38,091

    11.     Kerala                                                              33,708

    12.     Madhya Pradesh                                           40,888

    13.     Maharashtra                                                   71,759

    14.     Manipur                                                          2,463

    15.     Meghalaya                                                     1,737

    16.     Mizoram                                                          1,793

    17.     Nagaland                                                        2,904

    18.     Orissa                                                              33,756

    19.     Punjab                                                             42,057

    20.     Rajasthan                                                        48,714

    21.     Sikkim                                                              908

    22.     Tamil Nadu                                                     44,834

    23.     Tripura                                                            3,831

    24.     Uttar Pradesh                                                 104,079

    25.     West Bengal                                                  79,575

    26.     NCT Delhi                                                       13,254

               Total                                                                791,400

Source: RBI-Handbook of Statistic on States Finance in 2004




S. No. Particulars                 As on 01-06-1954 or as &         As on 01-12-2004

                                             when a particular facility

                                             was introduced                          (In Rupees)

1.  (a)   Salary                                          400/-                         12,000/-

     (b)   Constituency Allowance            -                                10,000/-

     (c)   Off. Exp. Allowance                   -                                2,500/-

     (d)   Franking Charges                        -                                1,500/-

     (e)   P.A. for Sec. Assistance             -                                10,000/-

            (Per Month)

2. Travelling Allowance*

     (a)   By Rail                     (a)  One Second Class and      a)  One First and

                                                    one Third Class fare              One Second Class

                                                    from usual place of                fare.


                                                    (UPR) and back to UPR.

     (b)   By Air                      (b)  One and One-Fourth of    (b) Same**

                                                    Air Fare.

     (c)   By Road Mileage     (c)  Eight annas per mile.        (c) Rs. 8/- per km;

                                                    In case the places                   ( if connected

                                                    were connected by rail,          by train with

                                                    the road mileage was              Delhi within

                                                    restricted to rail fare.             300 kms can

                                                                                                   claim road

                                                                                                   mileage). A

                                                                                                   Member within

                                                                                                   300 kms can

                                                                                                   claim road


3. Daily Allowance*                   Rs. 21/- per day besides         On similar lines.

                                                    two days before and two                     now Rs. 500/-

                                                    days after the Committee      per day.


4. Other Facilities

     (a)   Air Journeys            (a)  One air journey within     (a) 32 single air

                                                    India from one place to          journey during

                                                    another and back during         a year including 8

                                                    each session by Indian            such journeys for

                                                    Airlines/Air India                   an independent


                                                    w.e.f. 21-08-1969.                 person with carry

                                                                                                   over facility

     (b)   Rail Pass for             (b) One free non-transfr-        b)  Free for self, with

            self travel                        rable. Second Class               spouse to travel in

                                                    pass entitling him to              First Class A.C.

                                                    travel by any railway            or Executive

                                                    in India at any time.               Class along with

                                                                                                   an attendant in

                                                                                                   Second A.C.

     (c)   Rail Pass for             (c)  For spouse travel in         (c) Now spouse can

            spouse                             First Class once during          travel in First

                                                    every session from UPR       Class A.C. or

                                                    to Delhi and back was           Executive Class

                                                    introduced                              once during

                                                    w.e.f. 21-08-1969.                 every session

                                                                                                   from UPR and


     (d)   Telephones               (d)  (i) a) one free telephone-  (d) (i) two free tele-

                                                    at residence or office in          phones – one at

                                                    Delhi with 1,800 free             Delhi and one at

                                                    local Calls during a year.        UPR with 50,000.

                                                    b) one more free                     free local calls

                                                    telephone at UPR was           each  during a

                                                    allowed                                  year.

                                                    w.e.f. 05.08-1964.

                                             (ii) -                                         ii)  one – in Delhi

                                                                                                   / UPR for internet

                                                                                                   connectivity pur

                                                                                                   poses with 50,000

                                             (iii) -                                        (iii) one–mobile

                                                                                                   phone with

                                                                                                   national roaming

                                                                                                   without any

                                                                                                   charges of

                                                                                                   registration and

                                                                                                   rent. Calls to be

                                                                                                   adjusted 1,50,000

                                                                                                   (total of i-iii)

                                             (iv) -                                        (iv) Additional

                                                                                                   10,000 telephone

                                                                                                   calls on each of

                                                                                                   the telephones for

                                                                                                   those Members


                                                                                                   constituency is

                                                                                                   1000 kms away.

                                             (v) -                                         (v) All these calls, if

                                                                                                   not exhausted,

                                                                                                   can be availed on



     (e)   Water &                    e)    For both water &             e)  Water – 4,000 kl

            Electricity                       electricity the monthly          per annum.

                                                    free allowance was                 Electricity –

                                                    introduced @                         50,000 units per

                                                    Rs. 300/- p.m.                        annum on light &

                                                    in the year 1986.                    power meters.

     (f)   Accommodation       (f)   25% reduction in the        (f) Free in the form

                                                    House rent including              of a flat through

                                                    furniture and other                 out his term and

                                                    charges in respect                  bungalow on

                                                    of MPs residences                 nominal rent if

                                                    throughout the term.              entitled. Plus,25%

                                                                                                   reduction in

                                                                                                   furniture and

                                                                                                   other charges.

     (g)   Medical                    (g)  Same as available to          (g) Same.

                                                    CCS Class 1 Officers.

5. Facilities to


     (a)   Pension                     (a)  Introduced                        (a) Minimum

                                                    w.e.f. 09-09-1976                  pension of Rs.

                                                    An Ex-MP was                      3,000/-p.m.

                                                    initially entitled to a              with an additional

                                                    monthly pension @               pension of                                                                            Rs. 500/- for the completed Rs.600/-

                                                    term of 5 years. In addition,  p.m. for every

                                                    Rs. 50/- p.m. for every          year in excess of

                                                    completed year.                     five years.

     (b)   Family Pension        (b)  Rs. 1,000/- p.m. w.e.f.     (b) Rs. 500/-

                                                    20-08-1998 for five years      p.m. for five

                                                    from the date of his/her         years from the

                                                    death to the spouse or the     date of his/her

                                                    dependent of the MP,           death to the

                                                    died during the term.              spouse or

                                                                                                   dependent of the

                                                                                                   MP, died during

                                                                                                   the term.

     (c)   Rail                           (c)  rail travel in A.C. II          (c) For self-travel,

                                                    tier for an ex-MP along          A.C. II tier, if

                                                    with a companion was           along with

                                                    allowed w.e.f. 18.01.1999.    a companion.

                                                                                                   First A.C.

                                                                                                   /Executive Class,

                                                                                                   if traveling alone.

     (d)   Medical                    (d)  if residing in cities            (d) Same.

                                                    covered by CGHS on

                                                    payment of nominal

                                                    monthly contribution.

*    for attending session / committee meetings or any other business.

**  by any airline.

Source: The Salary, Allowances and Pension of Members of Parliament Act, 1954 and the rules made there under as amended up to date.




S.No.  Name                                                                      Actuals

                                                                               2002-03            2003-04

                                                                                (In crores of Rupees)

    1.     President & Its Secretariat                    9.94                  14.55

    2.     Vice President & Its Secretariat            0.97                  1.07

    3.     Lok Sabha – Speaker, Dy. Speaker,     222.78              244.90

            LO Leaders, Chief Whips,

            Members* - Its Secretariat                   

    4.     Rajya sabha – Chairman,                       77.90                92.25

            Dy. Chairman,

    5.     Council of Ministers                              74.33                122.52

            & Prime Minister

    6.     Special Protection Group**                  60.09                77.46

    7.     Ex-Presidents Pension                           0.05                  0.09

            Other Entitlements                                  0.19                  0.20

    8.     Ex-MPs Pension                                      4.76                  5.64

            TOTAL                                                    451.01             558.68

*    Includes provision for Railways Travel Facilities for former MPs.

**  Includes security for former Prime Ministers and members of their immediate families.

Source:  Budget Papers- Ministers- Finance, Home Affairs

                (vol. 1), Parliament, Secretariats of the President and Vice-President – Detailed demands for Grants for 2004-05.


Dialogue (A quarterly journal of Astha Bharati)

Astha Bharati