Madhya Pradesh to amend Tax Exemption Law for Ministers

NEW DELHI: The new law will end the reimbursement for the allowances and salaries received by the ministers and will require them to pay income tax.

The Madhya Pradesh government has decided to end the reimbursement for income tax for the state cabinet ministers. The state cabinet decided to amend a 52-year-old rule that exempted ministers, ministers of state, deputy ministers, and parliamentary secretaries from paying income tax on their salaries and perks, such as residential accommodation. Since 1972, the state government has carried the burden of tax. To implement this change, the government will propose an amendment to the MP Ministers (Salaries and Allowances) Act, 1972, during the upcoming Monsoon Session of the Legislative Assembly.

According to Madhya Pradesh Urban Development Minister Kailash Vijayvargiya, Chief Minister Mohan Yadav proposed an amendment in the cabinet which required the ministers to pay taxes, which was approved. The reimbursement applied only to the allowances and salaries received by ministers, not to their private income from sources such as interest, rent, and other earnings. Following the Chief Minister’s recommendation, the Cabinet decided to abolish the provision, allowing the state to cover these taxes.

However, this move has drawn criticism from the opposition. Madhya Pradesh Congress President Jitu Patwari said that the government should focus on reducing wasteful expenditures on “purchasing aeroplanes, decorating official bungalows, and buying luxury cars” instead.

This decision creates a positive image of the administration, especially at a time when the citizens demand greater accountability from the government and the elected representatives. Before Madhya Pradesh, the Uttar Pradesh government ended this provision in 2019. However, some states, such as Himachal Pradesh, Chhattisgarh, Haryana, and Uttarakhand, still keep up with this practice.

Aditya Rathi, a political analyst, said that the decision to stop the state government from paying the ministers’ income taxes represents a significant move towards financial responsibility and transparency in governance. By ending this practice, the state aims to enhance the allocation of resources and reduce unnecessary expenditures, promoting a more accountable and efficient administration. He noted that while the 1972 law was to ensure that ministers from economically weak backgrounds did not bear the burden of income tax, the new law is expected to result in direct financial savings for the state. These savings can be redirected towards development projects and public services.

Rathi added, “When ministers pay their own taxes, it fosters a culture of responsibility and aligns with the public’s expectations for transparency in governance. This will also help reduce unnecessary expenditures from the state budget, enabling funds to be redirected to essential services and development projects. This change is significant as the state grapples with financial burdens.”