Dialogue April-June, 2006, Volume 7 No. 4
An Elder’s Concern for Development
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.
CENTRE UNDER DEBT
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
STATES UNDER DEBT
(AS ON END-MARCH, 2004)
S. No. States Total Debt.
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
Source: RBI-Handbook of Statistic on States Finance in 2004
ENTITLEMENT OF THE MEMBERS OF
PARLIAMENT UNDER THE SALARIES ACT
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/-
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**
(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
300 kms can
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
(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
(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
(ii) - ii) one – in Delhi
/ UPR for internet
poses with 50,000
(iii) - (iii) one–mobile
rent. Calls to be
(total of i-iii)
(iv) - (iv) Additional
calls on each of
the telephones for
1000 kms away.
(v) - (v) All these calls, if
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%
(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
(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.
if traveling alone.
(d) Medical (d) if residing in cities (d) Same.
covered by CGHS on
payment of nominal
* 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.
TABLE – IV
STATEMENT SHOWING EXPENDITURE
ON VARIOUS HIGH UPS
S.No. Name Actuals
(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
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.
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