Government hikes salary of MPs to Rs 1.24 lakh per month

The government of India has notified the increase in the salaries, allowances, and pensions of the members of the  Parliament (MP) with a retrospective effect from 1st April 2023. The salaries have been increased from Rs one lakh per month to Rs 1.24 lakh per month an increase of 24 %.

The last time the salaries and other benefits of the MPs were revised was in April 2018.

Law regarding the Salaries & Allowances of MPs

The salaries and other allowances of the members of Parliaments are regulated by the Salary, Allowances, and Pension of Members of Parliament Act, 1954 enacted by the Parliament. 

The act was amended by the Finance Act 2018 and provided that the salary and daily allowances of the MPs shall be increased every five years starting 1 April 2023.

The salary and other allowances of the MPs have been linked to the Cost Inflation Index as per section 48 of the Income Tax Act 1961.

The Cost inflation index is notified by the government of India.  

The Cost Inflation Index is 75% of the average rise in the Consumer Price Index (urban) for the immediately preceding year.  

Increase in Salaries and Allowance of MPs

• The monthly salary has been increased from Rs one lakh to Rs 1.24 lakhs an increase of 24%.
• Their daily allowances have been increased from Rs 2,000 to Rs 2,500 per month an increase of 25%.
• The pension of an MP has been increased from Rs 25,000 to Rs 31,000 per month, an increase of 24 %.
• The MPs also receive additional perks in the form of daily allowance (for attending Parliament), constituency allowance, free travel and government housing.
• An MP receives a constituency allowance of Rs 70,000 per month and office expenses of Rs 60,000 per month.

Inflation Index used for other Salaries and Wages 

Salaries and wages in the country are periodically revised by the government and they are linked to an inflation index.

Consumer Price Index for Industrial Workers (CPI-IW)

• The Consumer Price Index for Industrial workers is used for the regulation of the Dearness allowance and Wages of millions of Workers and Employees belonging to Central Government, State Governments, Public and Private sector Establishments in the country.

Consumer Price Index-Agricultural Labourers (CPI-AL)

• The wage rates for workers under the  Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) are linked with the Consumer Price Index-Agricultural Labourers (CPI-AL).