Price increases

A civil servant tells me that the recent salary increase has made him poorer!

How? Because his pay increase barely covers the corresponding increase in the cost of rent, fuel and groceries. This is his statement of expenditure:

We can’t do much about the increase in the cost of fuel and onions. They reflect price hikes in India and have nothing to do with salary increases here.

But we can’t allow rents and the prices of other goods to shoot up every time civil servants get a pay hike. This undermines the whole purpose of a pay increase. And it makes life for employees in the private sector that much more difficult.

Are you a civil servant? If so, has the recent salary increase made you richer or poorer?

 

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  1. I am atleast happy that there is someone out there listening to people and actually trying to raise voice, keep it up!

    Whatever you have stated here is 100% true. In the name of pay increase, there is no gain but losses in the forms rightly pointed out by your honorable OL.

    And as per your poll, who should be the Best sportsperson of the year 2010, I am proud to declare for myself that I choose Lyonpo Tshering Tobgay as my Best Sportsperson for the year 2010 in every field. I wish you a very Happy and a Prosperous New Year to you & your whole family.

    Coming back to the subject, Is there anything that can be done regarding this situation now that it is already passed by the NA.

    I have heard from ppl that when you met few civil servants, you were enquiring about the pay raise and asking their opinion. I fail to understand that whenever we talk about pay raise for civil servants, the MPs are also automatically given the raise. Are they Civil Servants? and for that matter everyone in the Parliament.

  2. Soulasylum says:

    The crux of the matter is that either government should increase the salary substantially considering the yearly inflation rate or else donot make an attempt to increase the salary without any empirical justifications. The % increase looks alright but in essence the % is calculated on the salary prior to the 35% raise which means the real increase for a grade viii civil servant is just about Nu.1700. I guess the intent of the GOVT was to use the civil servant’s salary raise as outright justification for the salary raise of the MPs

  3. The aforementioned basket of commodities hardly represent 30% of the basic food items that an average Bhutanese family (4-5 members) consume every month and then the rentals and travel cost. In addition, there are other costs on children’s education. Salary raise has only inflated prices in the market and yes, made Bhutanese people poorer by much more than 20%…

  4. When will the OL’s campaign to woo the civil servants into Opposition end and when will few greedy and selfish civil servants cease to represent all the civil servants.

    I am sick of this very ‘dirty’ politics.

  5. Brokpa Neipo says:

    it was a long awaited issue to be discussed on such forums and let our government know and make them realize that instead of looking into the welfare of our citizen holistically encompassing the values of GNH, i very personally feel that the government is not upto the expectations of major junk of the poor people.
    some, the politicians in the name of civil servants are, with doubts are benefited a lot.
    the mere 20% declared increase in pay did excessively hiked the consumer prices and fueled the inflations, making us more poorer than without the ungraceful 20% pay hike.
    Hope GOD alone will come to our rescue.

  6. The government should solve this problem – Rental increasing …..

  7. salary hardly increased and rent highly hiked

  8. House rent 7000, add electricity, TV, telephone, water Nu 1000, add PIT ?, total amount say Nu 8500. For a salary of 14K the balance is NU 5500. Small family happy family 4 head will get NU 1375 per month or just NU 45.83 per day. This amount is for food, clothes, incidental cost, social obligations….etc. How about stationeries and cost of shoes for school children?.

    Much cannot be done to minimize the cost of living because of import of most of the basic commodities for living, however, there are some areas to ponder?

    House rent can go down if: 1) Interest rate on construction loan is reduced by the Financial Institutions (Can RMA liberalize?). 2) The minimum design standard of construction (structural)in place like Thimphu is not economical because of codal requirements to be met for approval. 3) The design analysis output of computer softwares is taken for granted without practical investigation for economy of design. 4) The cost of basic materials like sand, gravel, stones and timber could be reduced by liberalizing the sources as who says that we have scarcity of stones, sand and gravel etc? Every year thousands of tonnes of these materials are carried down to India from Bhutan by rivers and we Bhutanese buy sand from Jaigaon because it is cheaper there? Ironically, this does not raise the eye brows of the authority?. 5) Labor market is highly regulated. 6) Bhutanese do not have scientific approach; the assessment of performance is judged from gross income and not from saving or performance economy. 7)Farm products should be encouraged by making provision to import farm labors (eg. imported labors), many hard working and productive farmers may not have productive land although there are sufficient fertile land falling under reserve forest or national parks in the southern foothills along the border. 8) Increasing taxes will indirectly increase the cost of commodities and so on…

    Parking fees has gone 100% (Nu 5 per 30 minute earlier to Nu 5 per 15 minute now)but nobody seems to bother. The vegetable market is clean and tidy after strict rules were enforced, but, it must have added few NU per Kg of vegetables. 3 months of meat ban perhaps is realized by the owner from the cost of every kilo from the customer. Let us also not forget the PIT with a ceiling which is neither appropriate nor dynamic with the escalation in the cost of living. It does not differentiate when children stays with their parent in a rented accommodation buying the same stuff from market at the same price from the one who stays in a hostel accommodation and can produce receipts (it should be noted here that while the rules could be much stricter in other countries, their population size, attitude and local environment makes difference).

    There are many areas, some complex but some quite simple. The value of same amount of money is higher in neighboring India while it is not so in Bhutan, it has substantial implication on common citizen? I would like to express that it our constraint may be because of the cost of clean air, water, environment and the pride of living in the land of happiness.

  9. This is where OL’s intervention and opposition is required, instead of tax revision on import of cars.

    Again, the intervention requirement is in papers/media cahrging the ruling government and not in this blog. Make “Rent Control” an agenda in the next parliament!

    Review on implementation of Tenancy Act is high time.

  10. Free-fall says:

    I fully agree with Your Excellency’s point. The salary hike is likely to bring about inflation in prices of goods and services.

    But, I would like to submit here that the hike (which is not yet effected though) would off-set the general hike in prices, at least in my case. (I’m a mid-level civil servant). What I feel is, given the circumstances, the Government has done its best. Despite economic data not indicating any good sign, it has gone all out to be optimistic. At least I’m confident with this Government that we will not have problems.

    Here too, I feel that, H.E. the OL should have suggested what should have been the best way forward. Merely bringing out an issue would serve no other purpose than sensationalizing the masses. We would have appreciated constructive criticism. Definitely, through such dialogue process, we can expect to improve a given situation. So my final submission on the subject is let’s also contribute solutions, not just problems.

  11. It is quite interesting to see how things are going on. Back in 2005 the salary for grade 7 civil servants was around Nu. 8000/- now it’s almost 100% revised but unfortunately inflation followed closely. So it is more or less a zero-sum game. But the inflation happens everywhere, recently Indonesian Gov. urged its citizens to grow their own chilies (eg. flower pots)

    But on the other end, there is a real opportunity for people who don’t have job. Most of us in Bhutan being a son/daughter of farmers, I recommend them to become educated farmer. Considering the price of food items; eg. 1 kg onion = Nu. 40/- it is better to be a rich farmer then a poor officer.

  12. What do you expect in a country where the very principle of development is a practical nonsense?

  13. i am extremely happy that atleast our OL brought this issue to such forum. i know everyone feels pain of inflation ( mostly created by pay hike) yet knowingly authorities concerned has done nothing to calm down such or prevent such??? Its really disgusting? i too became poorer after pay hike …

    OTHER TERRIBLE THING IS EVEN THE CENTRAL BANK OF BHUTAN IS SILENT ON THE INFALTION WHICH IS ONE OF THE PRIMARY OBJECTIVE OF IT. “UNCONTROLLED INFLATION” IS ONE AREA WHERE MANY LEADERS ARE SACKED AND BROUGHT DOWN BY PUBLIC PRESSURE, WHERE IT IS TAKEN COOL IN THIS COUNTRY PHYSICALLY!

    I REQUEST OL TO BRING SUCH ISSUES IN THE COMING SESSION AND AUTHORITY RESPONSIBLE FOR SUCH!

  14. kesang jr says:

    technically, a pay hike for civil servants should be an across-the-board hike. it’s just otherwise in bhutan’s case. why a double standard?
    in order to make sure that private sector employees are not worse off and house owners do not jack up housing prices, the government in office should enforce price ceilings.

  15. Bro,

    If only what you say is true about house rents being reduced if housing loan interests are reduced. Unfortunately, in our unique land, it does not work out that way. I am sure many of you will agree that the majority of our landlords are very unscrupulous people who hardly care for the plight of their tenants. I heard somewhere that even to have guests in the house one tenant had to write an application to his landlord. So as long as demand outstrips supply this housing crunch will continue with no solution in sight.

    Until then, whatever legislation the government passes through a tenancy act, will at best, remain a paper tiger at the best, in other words the dice is loaded in favor of the landlords.

    Right now, all we hapless tenants can do is to pray and hope that at least we don’t get a landlady who asks for written permission to have guests over.

  16. your exc,
    thank you for bringing up this topic in your blog. well, last times revision of 35% has made me not only poor but it made me very poor and pathetc. i saw my rent being increased by Nu.500 and deduction at source has also increased in the form of PF, TDS and so forth.

    this time, i think it will be no difference. i get the feeling that our pay is revised whenever those MPS who own a house needs to revise their rents.

    and ya…..why not MPS come out with a rent control act in next session…

  17. come to the real world. Capitalism is screwing the working class, not only in Bhutan but world over. In a capitalist world, law of supply and demand reign supreme, and this law operates in inverse proportion. Money talks and rich and powerful will always have upper hand.

    OL- if you are seriously concerned with inflation with salary rise, why did you not raised this during NA session??? Writing in your blog will not change or improve the situation.

    Cheers

  18. To Mr Thinlay: Yes he did. He raised the concerns during the last NA session. He tried to explain as much as he could in his limited time to speak in the parliament.
    Now, if you are seriously concerned, why didn’t you go and observe the National Assembly session when he spoke?
    Cheers.

  19. Soulasylum says:

    @ Dorji,
    “The pendulum of the mind oscillates between sense and nonsense, not between right and wrong”. what you have written is pure nonsense. The adage was a pertinent issue raised by the OL in line with his expected duty. I guess the move was never intended to moo the civil servants to the opposition’s end.

    Please pause for a moment and do some analysis as where the real dirty politics is brewing. your conscience will force you to change your assertion.

    Even if you consider this issue as nonsense, the ball is in the present govt. court as There is no nonsense so arrant that it cannot be made the creed of the vast majority by adequate governmental action..

  20. At least, the civil servants have promised raises – what about private employees? They don’t even have that, but are affected by the “after” hikes.

    Is there mechanism to regulate the private employment?

  21. civil servants in bhutan are increasingly becoming a burden on the economy along with the MPs. both of them seem to have no limits on their demnads for endless payhikes and now incredibly claim that they are getting poorer with such hikes.

    i have an idea get rid of the 35% and 20% hike and inflation in bhutan will be lesser and amke lisfe easier for the much larger pvt sector and farming community.

    by the way mr ol civil servants may reign supreme on online forums but please do your calcaultions right for come 2013 it will be the pvt sector and the farmers who will make the real decision not some self important civil servants who have become synomous with corruption and greed.

  22. bhutan,

    So true, our civil servants do the least and demand the most. The only thing they do alot is shout and keep on warning the elected government that if their demands are not met then they will collectively vote them out of power.

  23. With due respect to one and all i would also like to express some similar emotions regarding the inflation and black marketing existing in Bhutanese Society.i personally feel that this problem can be solve if we keep constant check on the consumers protection rights.All consumer good ranging from vegetables to safety pin should at all cost not be sold above MRP which stands for maximum retailers Price. if that be checked the living standard of a common man will be reduced.Thus the 20% raise can make a difference.

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