MPs’ Salaries – What about the Rest of the World? – Part 2

In Part 1, we looked at who decides the MPs salaries, services extended to them and the proportion of parliamentary budget earmarked for MP salaries. In Part 2, we look at the distribution of MP salaries across the world apart from comparing Indian MP salary with the others.

The Inter Parliamentary Union (IPU) Survey report has detailed information on the average salary of MPs from across the 104 Parliaments that responded to the survey. The salary figures are adjusted to Purchasing Power Parity (PPP) based on World Bank’s conversion factor.

Salary Analysis

The IPU survey report is based on the basic salary (in gross amount before tax) per parliamentarian per year in the year 2012. The survey notes

• The average annual parliamentary salary is $62,075 (in PPP dollars) in 2012.
• The median annual parliamentary salary is $48,971 (in PPP dollars) in 2012 (for Iceland)

The survey also notes that the way that the ‘basic salary’ is understood can be very different from one country to the other. For eg, in some countries like  Liechtenstein, Slovenia (upper) and United Kingdom (upper) – parliamentarians work on a part-time basis, thus members of these parliaments/chambers do not receive basic salaries equivalent to their counterparts working full-time in other parliaments.

According to the survey, 1/4^th of the Parliamentarians received less than 25,000 PPP dollars. More than half of them received less than 50,000 PPP dollars. There are also 14% who received over 100,000 PPP dollars. Countries like the US, Israel fall into this category.

Remunerated employment outside Parliament & Reporting

As per the survey, 76.4% parliaments reported that MPs can have remunerated employment outside parliament and in 58.8% parliaments members are required to declare income from other employment to parliament. In some parliaments, members cannot hold any other jobs except for teaching posts. Some other parliaments reported that member’s employment outside needs to be authorized by the parliament.

And interestingly, the average salary of parliamentarians who are allowed to have other remunerated work was higher than the overall average; 105,003 PPP dollars against the overall average of 62,075 PPP dollars.

Salary plus Allowances

If allowances are included, the overall average goes up to 81,207 PPP dollars. There is a considerable difference in the distribution when allowances are included. While only 14% parliamentarians received over 100,000 PPP dollars in Basic Salary, the percentage has more than doubled to 29% when allowances are included.

Other Allowances

The survey noted that basic allowance was difficult to arrive at since different parliaments paid allowances differently. Some of them are yearly allowances while some other are monthly. Some parliaments also pay attendance allowance and hence the allowances vary widely. Close to 37% of the parliaments pay attendance allowance. Some parliaments pay travel allowance that depends on the distance of the constituency from the capital city.

The survey also noted that Speakers are paid more than MPs in most parliaments. The average salary paid to the speaker was 104,639 PPP dollars.

India Vs Others

While there is a lot of criticism surrounding the salary of Indian MPs, their basic salary is on the lower side when compared to most other developed countries. The nearest to the salary received by an Indian MP is by a South African MP who receives more than twice the amount received by his Indian counterpart. The highest salary is received by an Australian MP, about 6.5 times the amount received by an Indian MP. Even a Brazilian MP receives more than 6 times the basic salary of an Indian MP. An Indian MP earns roughly 1/6^th of what his American counterpart gets as a basic salary.

Indian MPs are in the 25,000 PPP dollars per annum range when basic salary is considered and go into 75,000 PPP dollars per annum range when allowances are also considered.

Support Staff to Parliamentarians

According to a UNDP report published in 2012, the global average of parliamentary staff per MP is 3.76. In India, the average was 4.67, less than 1/6^th of the American average of 29.73.

In the USA, the parliamentarian is allowed to employ up to 18 employees and a total support of about 16 lakh rupees per month (PPP adjusted) is given to pay their salaries. For a MP in India, a meager 30,000 rupees per month is provided as part of office expenses to hire assistants.

Does it mean the salary should be increased?

The individual MP’s salary may not need a revision since the allowances more than make up for the lower salary. What needs to be seriously considered is increased support for hiring staff so that the MPs can work more effectively.