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Cabinet approved 30% salary cut of PM, Ministers, MPs for FY 20-21 to manage COVID-19; MPLAD suspended for 2 yrs

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On April 6, 2020, Union Cabinet headed by Prime Minister (PM) Narendra Modi has approved an ordinance of 30% cut in the salaries of all Members of Parliament (MPs) for FY 20-21 and a two-year suspension (2020-21 and 2021-22) of the MP Local Area Development (MPLAD) scheme so that the amount saved can go to the Consolidated Fund of India to fight COVID-19. This announcement was made by Prakash Javadkar, Union Minister for Information and Broadcasting.Cabinet approves ordinance to reduce salariesAbout Salary Cut Ordinance:
In regard to the 30% salary cut, the passed ordinance has amended the Salary, Allowances and Pension of Members of Parliament Act, 1954. The remuneration cut is effective from April 1, 2020 for a period of one year.

  • The salary cut is applicable to all MPs, including the Prime Minister and his Council of Ministers.
  • President, vice-president, and the governors have also voluntarily decided to forgo 30% of their salary for a year.
  • It should be noted that only the salaries would be cut not the pension and allowances of MPs.

According to the Act, as amended in April 2018, MPs are entitled to a monthly salary of Rs.1 lakh, apart from various allowances.

About Non-operation of MPLADS for two years
Cabinet had also decided to suspend the MP Local Area Development (MPLAD) funds for 2020-2021 and 2021-2022 for managing COVID-19 crisis. Through this suspension, Rs 10 crore from each MPLAD fund will go to the Consolidated Fund of India. The amount saved from the scheme would be Rs.7,900 crore.

What is MPLADS?
Established in 1993, The Members of Parliament Local Area Development Division under Ministry of Statistics and Programme Implementation (MOSPI) is entrusted with the responsibility of implementation of Members of Parliament Local Area Development Scheme (MPLADS). Under the scheme, each MP has the choice to suggest to the District Collector for works to the tune of Rs 5 crore to be taken up in his/her constituency.