At a time when private companies and corporate houses are planning to cut costs, the Gujarat government has proposed a 25 per cent increase in salaries of MLAs and ministers, sources in the government said.

The new pay scale, at par with those of Class I officers, will come into effect from April 2009, sources said.

“In 2005, we had passed a bill in the state assembly by which pay scales of MLAs and ministers have been brought at par with a Class I government servant,” state assembly speaker Ashok Bhatt said(the state had in 2005 amended Section 3 of the Ministers’ and MLAs’ Pay and Allowances Act, 1960, to revise the salary. )

Consequently, with pay scales of Class I officers being revised by the Sixth Pay Commission, pay scales of MLAs and ministers have also been increased.

An MLA would get Rs 40,262 per month including all perks while a minister would get Rs 49,816 with perks as per the new pay scales.

Presently, an MLA draws a salary of Rs 23,940 and minister Rs 25,000 inclusive of perks.

While the officials will get the arrears over a period of five years deposited in provident fund, the MLAs and ministers will get them immediately as they do not have a PF (provident fund) account.

A senior official in the state General Administration Department (GAD) said salaries of MLAs would be reviewed from time to time at par with Class I officers.

According to Bhatt, the new pay structure will be effective from April 2009 but it has been implemented with retrospective effect from January 2006 and arrears for 39 months will be paid in cash to ministers and MLAs.

However, government employees would get arrears of 39 months in their Provident Funds with a five-year lock-in period. The government would pay 20 per cent arrears in the employees’ PF accounts for each of these five years.