Pecuniary & other business interests of lawmakers can have a significant bearing in the discharge of their duties. These interests also highlight the conflict of interest of our MPs. But what do we know about the pecuniary interest of our MPs? Here is an explainer.
The pecuniary interests of lawmakers can often result in conflict of interest and have a bearing on the discharge of their duties. Maintaining a record of these interests would help democratic institutions to have an understanding on the possible self-interest of the members and the possible conflict in the various laws being made. It would also help understand the impact of the presence of certain members in different legislative and policy making committees.
The law surrounding the disclosure & maintenance of such ‘pecuniary interests’ data varies from country to country, with many of the democracies across the world working towards bringing in greater transparency and accountability in this area. India also has a provision in place for maintaining a register of pecuniary interests of its Members of Parliament (MPs), but only for the MPs of the Rajya Sabha.
Register for Members’ Interest is maintained only by the Rajya Sabha
Rajya Sabha has an explicit provision for maintenance of ‘Register of Members’ Interest’. The register is maintained under the authority of the Rajya Sabha’s committee on ethics. As per these provisions, MPs of Rajya Sabha have to declare their interest in the following five categories.
- Remunerative directorship
- Remunerated activity
- Majority shareholding
- Paid consultancy
- Professional engagement
On the other hand, the Lok Sabha does not have any such provision for declaration of ‘pecuniary interests’ with members being required to declare only their assets and liabilities. They are not obliged to declare any other pecuniary interests that might have with a direct or indirect bearing on discharge of their roles.
Though the Rajya Sabha maintains the ‘Register of Members’ Interest’, it is neither available in the public domain nor on the Rajya Sabha website. The Register can only be accessed by filing a RTI application.
ADR (Association for Democratic Reforms) and NEW (National Election Watch) have filed a RTI application for Register of Members Interest and have procured the same with the details of Rajya Sabha MPs as on 04 January 2019.
Note on the Data: Since the data is as on 04 January 2019, some of the MPs may have retired and others may have switched parties. The party affiliation mentioned in this story is as on 04 January 2019.
Only 41.8% of the MPs have declared pecuniary interests
ADR’s analysis of the Register of Members’ Interest of Rajya Sabha MPs, notes that the pecuniary interest details have been submitted by 213 sitting members of Rajya Sabha. As on 04 January 2019, the details are not available for 17 members as they have not submitted their declaration of pecuniary interests.
Of the MPs who have provided their declarations, 89 (41.8%) have stated that they have pecuniary interests which fall under the defined five heads. On the other hand, majority of the MPs i.e. 124 MPs (58.2%) have declared that they do not have any financial interests which fall under any of the five heads.
What is the most common form of ‘Pecuniary Interest’?
It has to be noted that, the pecuniary interest of an individual MP can be under more than one category. ‘Shareholding of controlling nature’ is the most common form of pecuniary interest with 44 MPs declaring their interest under this head. Another 40 MPs have declared financial interest under ‘Professional engagement’ with only 2 MPs declaring under the head ‘Paid Consultancy’.
A total of 24 and 30 Members of Rajya Sabha have declared their pecuniary interests of the nature ‘Remunerative directorship’ and ‘Regular remunerated activity’ respectively.
Pecuniary interest of the highest value is under the head ‘Shareholding of controlling nature’ with BJP MP from Bihar, Ravindra Kishore Sinha having individual shares worth Rs. 525 crores and overall shares (including self, spouse and dependent) to the tune of Rs. 747 crores.
Congress MP Abhishek Manu Singhvi, member from West Bengal has declared shares worth Rs. 386 crores of which Rs. 382 crores worth of shares are on his name. Further, Abhishek Manu Singhvi has also declared Rs. 177 crores as the amount received under ‘Professional engagements’. Under the same category, Congress’s P. Chidambaram has declared amount earned as Rs. 33 crores, followed by nominated member of Rajya Sabha, KTS Tulsi with Rs. 27 crores. KTS Tulsi is one of the two MPs who have declared pecuniary interest under ‘Paid Consultancy’ with amount of Rs. 27.5 lakhs. Dr. Vikas Haribhau Mahatme, is another MP under this category with pecuniary interest to the tune of Rs. 5.6 lakhs.
D. Kupendra Reddy, JD(S) MP from Karnataka declared an amount of Rs. 40 crores as received from ‘Remunerative directorship’, followed by Rajeev Chandrasekhar, BJP MP from Karnataka who declared Rs.7 Crores under this head.
124 of the 213 MPs who have made declarations, state that they do not have pecuniary interest under any of the 5 heads. Of these MPs, Subbirami Reddy of the Congress from Andhra Pradesh has the highest assets, worth Rs. 422 crores. C.M. Ramesh of TDP, now in BJP, has declared his assets to the tune of Rs. 258 crores with no pecuniary interest.
What about such disclosures in other countries?
Many of the major democracies lay emphasis on having such provisions for its law makers. The provisions in various countries differ from one another.
United Kingdom (UK)
United Kingdom’s Parliament requires all its members to register all their current financial interest in the Register of Members’ Financial Interests. All the new MPs are required to provide the details within a month of their election and the existing MPs need to furnish the changes if any within 28 days. They are required to register details like Salaries, fees or payments of any kind, gifts for services performed, allowances , ex-gratia payments, payments for opinion surveys, donations received for support as MP etc. These details have to be furnished along details of the company or the payer. Pension payments, dividends, earnings received as member of parliament or a minster of cabinet, earnings of member’s spouse, partner or family members are exempted from declaration. Unlike in India, the registration of Interests is applicable for both the houses i.e. House of Commons and House of Lords.
Australia also has a provision for registration of interest for its members of Parliament, applicable for both Senators and Members of House of Representatives. The registrable interests fall under 14 categories like Shareholdings, directorships, real estate, partnerships, bonds, debentures, gifts over certain value etc.
Since 2005, the Members of Parliament in New Zealand are also required to furnish the details of their pecuniary interests. The Register of Pecuniary and Other Specified Interests of Members of Parliament contains the details like – Company directorships, Shares and Bonds, Employment, Interest in Trusts, Real property, Investment Schemes etc. New Zealand also has a provision for external audit where ‘The Office of Auditor General (OAG)’ reviews and if needed conducts an enquiry into the returns filed by the Member of Parliament.
In Canada, the Conflict of Interest Code specifies 12 heads under which the financial interests of the Members of Parliament fall under. These include – Government contracts, Shares in Private Companies , Trusts, Sources of Income etc.
In United States, under the ‘Ethics in Government Act’, the public representatives have to file their pecuniary Interests under- Financial Disclosure, Gift/Travel, Lobby Disclosure and Post Employment. An online process using ‘Financial Disclosure Online Reporting Application’ is in place to facilitate online filing of the financial disclosure.
Current provisions are limited, Reforms needed for better reporting
The provision for declaration of pecuniary interests for MPs of Rajya Sabha is an initial step towards resolving the conflict of interest issues pertaining to public representatives. While such a provision has to be made for MPs of the Lok Sabha, the provision in place for Rajya Sabha and its enforcement has left a lot to be desired.
In the report by ADR, 58.2% of the MPs who made declarations specify that their pecuniary interests do not fall under any of the 5 categories. However, a review of their assets makes one wonder if the provisions for these declarations are enough. There are MPs with assets running into hundreds of crores, but still have not declared any pecuniary interest in these 5 categories.
In many of the countries as noted above, the pecuniary interest declarations include categories like real estate, savings/investment accounts etc. which if included in India, will see more MPs from the Rajya Sabha declaring interests under those categories.
Timely and prompt disclosure is another important aspect of these disclosures. As already stated earlier, 17 members have still not declared their pecuniary interests by the time ADR filed the RTI. Further, like in other countries, all such declarations made by MPs should be placed in the public domain, through the website of the Rajya Sabha. It should not require individuals to file RTIs to get this information.
A revised law that covers a wide range of areas in terms of pecuniary interests is the need of the hour to bring in transparency in the affairs of public representatives.
Featured Image:Pecuniary interests of our MPs