Sunday, August 22, 2010

Three statistics that our MPs must consider

The pay hike of Members of Parliament are gathering anger.India's Economy has grown by 8.5 per cent in the last 5 years.The per capita income Indians stand at 2,795 Rs per month. The salary of MP's are being tripled. If Rs. 50,000 is an insult, as Lalu Prasad Yadav said, what would you call Rs. 2,795, an abomination? The trade union like activities of MPs create a huge divide between them and the people they represent, writes Gautam Chikermane in Hindustan Times.

Read the whole article:

"As the question of how much our Members of Parliament (MPs) are paid gathers anger, here is a rational look at this phenomenon that best defines the meeting point of politics and money. I’d like to present three statistics."

"One, over the past five years, India’s economy has raced ahead by a compounded average growth rate (CAGR) of 8.5 per cent, impressive by any account, particularly in the context of one of the world’s harshest recessions since the Great Depression that barely caused a slowdown in India."

"Two, in the same period, the per capita income of its citizens has grown by 6.8 per cent. It stands at R33,540 per annum, Rs 2,795 per month or Rs 93 (about $2) per day. That’s a global rank of 143, after adjusting for purchasing power parity (PPP). "

"In this context, here is the third statistic: the salaries of MPs are being tripled, which means a CAGR of 31.6 per cent over their 2006 salary. The MPs are livid, saying it’s not enough. The last time they got a raise, it was four-fold (in 2006), so how can they settle for a three-fold rise this time?"

"We do need to pay our representatives well. In a democracy, they are our sole link to changing aspirations. The question is, how well?"

"This salary (Rs 50,000) is an insult to Parliament," Rashtriya Janata Dal President Lalu Prasad said. I would humbly like to point out, sir, that this monthly salary is 1.5 times the annual income of an average Indian. If R50,000 is an insult, what would you call R2,795, an abomination?

"I wonder why our representatives can’t see what the rest of the nation can — their coarse rent-seeking through higher salaries is creating a deep divide between themselves and the people they purport to represent."

"Honourable Members: can you please keep this raise in abeyance till your constituents are better fed, better clothed, better housed? Linking your increments to the well-being of your constituents will bring you far greater long-term dividends."

Read the article on Miracle of Democracy.

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