In a further attempt to appease members of parliament dissatisfied with a three-fold increase in salaries and doubling of other perks, the union cabinet decided to increase the tax-free office and constituency allowances of MPs by another Rs5,000 per month.
Last week, the government increased MPs' salaries from Rs16,000 to Rs50,000 a month. Their constituency and office allowances were doubled from Rs10,000 to Rs20,000. Now both those tax-free allowances have been raised to Rs25,000 a month.
The MPs, orchestrated by RJD chief Laloo Prasad Yadav, have been insisting that that their salaries be increased to Rs80,001 as decided by a parliamentary committee, so that it is still a rupee above the salary of top beaurocrats.
BJP, RJD, SP and JD(U) leaders had a meeting with finance minister Pranab Mukherjee on Saturday over the issue, when they were assured that appropriate steps would be taken.
The cabinet panel met under the chairmanship of Prime Minister Manmohan Singh to reconsider and bring amendments to the MPs' salary hike bill it had cleared last week. The panel gave its nod to propose a hike in non-taxable perks - constituency and office allowances - given to MPs.
MPs claim that they are among the lowest-paid public representatives in the world.