Increase civil service salaries

Civil servants in Dorokha

The day before yesterday, during budget discussion, the seven reasons I reported on why it may be time to review civil service salaries:

  1. Domestic revenue of the government, through tax and non-tax measures, has increased considerably since the last salary increase. In 2008-09 domestic revenues were projected to be Nu 11,932 million. In 2009-10 it was Nu 14,108 million. And in 2010-11 it is projected to be Nu 15,816 million. Domestic revenues have increased by a whopping 33% while civil service salaries have remained stagnant.
  2. Between 2008-09 and 2010-11 budgets, the government’s overall outlay has increased by a considerable 41%. Of that, about half goes to finance recurrent costs. Recurrent costs in 2008-09 were budgeted at Nu 11,061 million, and for 2010-11 at Nu 15,154 million. That’s a 37% jump in current expenditure in the two years. Salaries form a big part of recurrent costs, yet civil service salaries have not benefited from the 37% increase in current costs.
  3. Prices have increased. For the year 2009, the government has estimated a price increase of 10.74% for food items. For 2008, it estimated price increase of 11.75% for food items. That works out to a cumulative price increase of 23.75% over the last two years.
  4. Taxes are increasing. The government is proposing a wide range of taxes aimed at increasing revenue by Nu 450 million.
  5. Fuel prices have increased twice in the last six months. The last increase will drive up inflation even higher.
  6. Most civil servants will now receive less money. Civil servants received a uniform pay increase of 35% in January 2009. However, the basic pay was not increased. Instead the 35% increase was given as an “allowance” so that the government would not have to increase their matching contributions to the provident fund. So after the 35% allowance is incorporated in the basic pay, civil servants will henceforth receive less money in the hand every month – provident fund contributions, health contribution, TDS and more will now be deducted from the 35% increase in salary.
  7. The public expects a pay increase. In fact, the pay increase is a consolidation of the 35% allowance that civil servants have been receiving so far. So, in reality, they will receive less money from July onwards. But the public thinks that there is a pay increase. So prices will rise. And, in spite of the Tenancy Act, rents will, once again, increase.

I’ve suggested earlier – every year, in fact – that public service salaries should be revised every year taking into account the overall economic situation in the country. For simplicity, salary revision could be pegged to the price movements of a basket of goods and services, but one that is comprehensive and relevant.

That way, public servants wouldn’t expect a sudden hike in the salaries every now and then. And the government wouldn’t have to ponder about how best to extract political mileage when salaries are increased.

 

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  1. Good Job OL!
    Even though you are big minority, you are living up to the mark of people’s expectation. They way you demanded the resignation of FM was simply stunning and it is time we put in some sense of moral obligation in our leaders.

    I was ashamed to see the ruling MPs simply defending for the hake of it even though they knew that they didn’t do their homework well when it comes to revision of taxes in the country. Even more disgusting was in the fact that Hon’ble Speaker sought clarification from MoF Officials who, for god’s sake said “there was no inconsistencies.”
    As far as I am concerned there was big consistency. While PFA provides for the parliament to authorize such revision of taxes, the Sales Tax, Customs & Excise Act of the Kingdom of Bhutan 2000 authorizes MoF. Isn’t that a big inconsistency???
    We could also clearly make out how many of the MPs, including Ministers and some even with Law background, could not comprehend the issue you are raising.

  2. Civil servants do not need pay raise. Instead, do something about all the taxes that are going to be imposed on the general public. This will help all the citizens, and not just the civil servants.

    If opp. leader is trying to side with the civil servants for their undeserving pay raise, just to garner votes for 2013, I say it’s a shame!

  3. Yes, I definitely find that salaries for civil service must be raised. I believe and see most our civil servants just go hand-in-mouth with little salary, more to pay for rents, and increasing food prices. The most affected ones are the civil servants at lower ranks. There is nothing to talked about secretaries, directors and other high officials. They have enough of money to buy plots of land in Thimphu and Paro valley, and to construct four to five storied well-furnished buildings. What needs to be increased is for the people in lower ranks. Did anyone think about the sweepers, messengers, drivers, carpenters and so on? Most of them live in disaster, I have no words to describe them.
    And moreover many talk about future generation of Bhutan: we students, the youths that our country lies in our hand. I am very grateful to government for providing me education free of cost. But yet our stipend is not increased from Nu.1000 monthly since long time. It is very difficult to survive in CST and other colleges under RUB with increasing inflation rates and water shortages. Many of our ministers, VC and even Your Excellency have visited our college. We have raised all these issues but promises are not yet fulfilled. We the student body are looking forward that changes will happen soon in all the colleges.

  4. I agree with the principle outlined by the OL on the need to increase the salary of the civil servants. I followed the discussion in the NA and it was abundantly clear that everybody supported the pay increment for the civil servants, armed forces and the National workforce. In fact, it was the Lhuentsi MP, Karma Rangdol who first spoke on the need to increase the pay for the civil servants and the armed forces.

    While I agree with the overall principle on the need to increase the salary of the civil servants, I beg to differ with some of the seven point justification of the OL.

    1. Yes, domestic revenue may have increased considerably over the years, but what about the expenditure. I don’t think expenditure would have remained stagnant. This justification is tenable only if the OL could mention the ‘net increment’ in the domestic revenue (gross domestic revenue increment minus gross domestic expenditure).

    2. Yes, the prices for the essential commodities do increase and that is a general trend the world over, nothing unusual about that here. If the salary were to increase based on the movement of the prices, even the richest government in the world can go bankrupt in a short span of time. so, this is really an unrealistic proposition. Salary for the civil servants were increased only in 2008 and if the government is considering yet another increment in six month’s time from now, I think that is extremely generous and bold on the part of the government because any increment would mean a huge increment on the current expenditure, which already I am told is 41% of the domestic revenue. I’ve been in the civil service for almost 7 years now and I don’t remember the past government giving increment every after 2 years. I remember getting just one increment in 5 years from the previous government! I wonder if the prices were not increasing then and if the domestic revenue was not increasing then!

    3. Yes again, taxes too are increasing and I say it’s about time, because our government has not increased the taxes for the last five years. As you know, government is not a business entity and therefore, it has to rely on the taxes to meet the current expenditure at least. we at least have few donor countries who fund major chunk of our capital expenditure but I don’t think they would be around helping build our nation forever. Already many donor countries have withdrawn their support and left Bhutan. So, without a dynamic taxation policy, I don’t see any other sources of building our revenue base for the sustainable long run.

    The other day I heard both the OL and the Gasa MP jointly questioning the MoWHS minister on the need to construct a farm road to Laya, to bring aabout parity in development and bridge the gap between the rich and the poor. If this was not a rhetoric, I am sure both the OL and Gasa Mp would know that without a sustainable revenue base this is not possible, and the only way to build a sustainable revenue base, in my opinion, is through sound taxation policy. Therefore, it is crystal clear that no government can carry out developmental activities without enough money, nor can the gap between the rich and the poor be bridged without any taxing those who earn more. For example: in Scandinavian countries, taxes are as high as 50-60% of the earning and yet a survey revealed that they are the world’s happiest people (despite that fact that we consider ourselves as living in the land of happiness).

    4. I don’t understand why Civil Servants would receive less with the 35% increment. The justification that their deduction would also increase is untenable. Deduction is not specific to civil servants alone and also there are benefits attached to those deductions. for example: free education, free health, PF, Gratuity and Pension are some of the benefits enjoyed by the civil servants both while in the service and after retirement.

    Lastly, I think it’s not fair to blame the government for any public reaction which is an outcome of a certain discussion in the Parliament.

  5. gungtala says:

    It is true that civil service pay is low but looking at the works people do and their committments, harrassing the public, away from office most of the time, they deserve even less.

  6. Why only the civil servants and the MP’s have the privilege to enjoy the fruits of Bhutan’s success.

    The increase in the revenue of the RGoB is mainly due to the commissioning of the Tala Hydro power corporation.

    I have seen in a news paper that the dividend contributed by DHI to MoF have increased by more than 100% compared to last year due to Tala (from about Nu. 3 billion to about 6.5 billion).

    I guess we should include all the people of Bhutan in the success of the nation rather than giving a raise to civil servants or MP’s.

    I would like to request our Hon’ble Lyonpo to stop the proposed electricity tariff hike which is suppose to happen in the name of increasing revenues to the Government.

    “LET THE POOR PEOPLE OF THIS COUNTRY ALSO HAVE THE BENEFIT”

    “THE TARIFF SHOULD NOT BE INCREASED BUT REDUCED FOR THE POOR SECTION OF THE SOCITY.”

  7. I was quite disappointed to hear that with the 30% allowance being converted to basic pay, i would be getting 800 less starting from this month.
    I think the yearly increment we get doesn’t even cover the inflation.
    Anyways, the only positive thing about my job is not my salary but rather the work i do. I like to think that at the end of the day, whatever i do brings a positive difference/change in the community that i live in. Despite the peanuts that i get, ironically i love my job. I guess, sometimes its not all about the monthly paycheck. But i definitely wouldn’t mind a salary hike.

  8. Dago Tshering says:

    First, to me the raise in the salary should be based on the inflation then the old traditional increment of few hundred ngultrum.
    Secondly, the housing crunch and proposal of the house owners and their never ending desire to increase the rental charges are beyond any individuals response. Probably, time has come for the government to seriously look into why the tenancy act is not operating. Is it simply because of the property ownership obligations or …i have very less answer to this.
    The increase in the power tarrif is out of the very idea to reduce home consumption and increase the export unit. While i understand that we should get more priority on power, again time has come for us to think more at global benefits. Using less energy through use of energy saving scheme and energy use ethics (CFL lights, switching off power.etc..) will help us reduce our own power consumption and at the same time in increasing the export of the power to our neighbour firend India thereby off setting the carbon emissions.

  9. Hey!unknown,
    Don’t you feel ashame to talk such thing to OL who is doing all good cause for th people of Bhutan. I think you are not knowing what is good and bad, right and wrong and so on. If I describe you I think you are like a donkey…… Actually you should appreciate him for his boldness and support for the civil servent. Yea, everybody knows that not only civil servent for the pay increase BUT you know the real meaning of “CIVIL SERVENT”. to be frank they should deserve more than MPs because most of the MPs are just to count their heads and with maximum benefit.Actually MPs they should feel guilty to talk on their pay increase which they have already done. DPT they are not formed for the development of the country instead they are formed for the development of themself. DPT they are really doing dirty politics which they all dont deserve any benifit.
    No, DPT is qualified in next vote only donkey people will vote for DPT in 2013.
    Lyonpo and Dasho Damchoe, though there are toooo less in opposition side you two are doing fabulous job la, keep the same spirit and continue la. yes, FM should resingn immediately because he might be having vision problem and thats why he is not following constitution,Actually he should see everything because he is wearing big glass where no body in the country with glass could compete with him.
    He is wrong man in a right place or important seat. Dont every citizen thinks like that la?????????? To be frank I am not civil servent la because when I talk all things abt pay you all might be thinking that I am taking on my benefit but its not that.

  10. Civil Servants!

    Their conduct and behaviour is anything but civil and they are definitely not servants except maybe to their bosses, and they are greedy as hell. This applies to most of them, am sorry for the rest few.

    No Pay Raise for them!

    Lotey is one of them, who just warms his chair anticipating a pay raise just like that.

    Hahahaha

  11. Thinlay says:

    I am indeed surprised to read so many contradictory point of view in this forum. In the midst of all these, the real meaning of topic in discussion is lost. Now coming back to civil servants pay increase, my humble opinions are:

    1. Pay increase for any government, non-government or arm forces may have to be thought through, based on several factors such as: Do we have enough internal revenue to sustain periodic pay increase and at the same time fund development activities? Does pay increase lead to spirilling increase in food and other commodities prices leading to inflationery economy? Does pay increase encourage land lords to increase house rent? Does pay increase put paper money in the market causing devaluation of currency and inflation? Does pay increase lead to borrowing of money taking us in to debt situation?

    2. If pay increase is possible based on substantive justification then it should be done so across the board. The public disgruntlement arises when increase is given to certain section of society, disregarding others.

    Cheers

  12. Practising GNH says:

    I think it will in the interest of every individual in Bhutan to earn more money. It will also be in the interest of the Govt. to increase the salary of civil servants so that they will receive more votes like last time in the next election. But the reality is that raising the pay now and then to make every person happy is also not possible as Bhutan first needs to provide the basic necessities of life to its citizens. We are still an underdeveloped or rather Least Developed Country. If pay should increase, it should be for those of lower level in civil service who do not earn enough even to feed themselves – drivers, peons, caretakers, security guards, gardeners, cooks, etc. Let us make Bhutan a more happier place by helping poor earn more rather making the rich more richer. There are those who cannot digest what they have while there are those who are on the verge of starvation. Can Bhutan show the way to happiness? Yes, it can but the leaders need to be more empathetic and compassionate than they are now. We will keep looking up and hoping that the day for a more happier Bhutan will come, no matter when. That will be the day when all people in Bhutan will have a proper house to sleep, balanced food to eat, warm clothes to wear; a country where the rich will willingly share the excess resources with the poor; a country where there will be no rivalry, jealousy, anger, hatred, drug-abuse, crime, etc but all people living side by side in real harmony. I would like to hear news in Kuensel and BBS to hear that some rich people donated money or shared house to poor people; or news that reads that a rich person constructed a nursing home for poor and elderly; or news that some rich people sponsored scholarships for poor children and many other news. When will we hear such news?

  13. Thanks alot to unknown for your justification.I think you are not civil servant and thats why you are against civil servant pay increase by not knowing the responsibilities they take. Though I am not a civil servant i mean to say that they deserve more than MPs yea. How can you say that civil Servant dont deserve pay increase???????????? Yea, I agree with you some of them are greedy and bossee but their pay has been incresed but those who works from the ground root level pay has not increased.
    With romourse of pay increase house rent has been already increased but at the end low income people are looser.
    If u, Unknown is in the shoe of these people you will know the taste whether it is sweet or sour.

  14. Its really great of the boss of minority that you understand the situation of the country thoroughly. On the other hand the one called ‘unknown’ is really inhuman and he really doesn’t know the value of civil servants. He really speaks ill of civil servants and devaluaing civil servants image.

  15. pelchen says:

    yea, me too agree with tshering Unknown is eally inhuman because he dont know the value of civil servant, if he works in low rank and live in Thimphu then he will realize the value of it.
    so, be human and talk like human being.

  16. Bullchakpa says:

    Agreed, we have many civil servants who deserve much more than what they earn and who we need to keep in the government. BUT there are also thousands who do not contribute any thing but cling to their jobs as their birth rights. What we need to do is to have a thorough reform of the civil service thus weeding out the weeds.

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