Gap narrowed between upper and lower echelons of civil service
18 October, 2008 - After going through the Pay Commission’s report, the Ministry of Finance (MoF) has drawn up a different pay hike proposal, which was submitted to the Prime Minister yesterday.
The main change is the reduction in the percentage gap between higher and lower grade civil servants given in the Pay Commission proposal, which means that the highest and higher-grade civil servants could see a sharp drop from the earlier high percentages. There will also be smaller decreases in the grades below them. Lower grade civil servants would not drop below the 40 percent raise proposed by the Pay Commission. However, there is no clarity on what will be the allowance structure at the higher levels.
In the MoF proposal, 17 different levels of pay were proposed based on the 17 different grades.
A member of parliament said that there was some concern that politicians should opt for a smaller hike because of fierce public criticism over the Pay Commission report.
In a press conference with the Bhutanese media yesterday, Prime Minister Lyonchhen Jigmi Y Thinley said that the combined Pay Commission and MoF report will be posted on the MoF website. However, the separate proposals will not be posted. The Prime Minister said that it would be expensive to put both proposals on the same website.
However, sources said that this could be because the government does not want the public to compare the two proposals in detail. The government is conscious that any unfulfilled recommendation of the original Pay Commission report may backfire, said the source. The government had originally promised to place both reports on the MoF website.
Meanwhile, the prime minister said, that the cabinet had instructed the MoF to study the implications of the pay commission report both at the micro and macro levels.
The MoF report also discussed the effect of the pay raise on inflation, balance of payment and our currency reserves, among others.
According to a Royal Monetary Authority expert’s opinion on the current recommendations, inflation would be higher on locally available goods and services like red rice or rent. “House rent constitutes around 25 to 30 percent of any income and this will most likely go up by 15 to 20 percent out of 100 percent,” said the expert. The inflation on goods from India will not be affected much since the Indian market is huge.
However, the negative balance of payment is expected to increase with more imports from India. Another expert said, “Around 70 to 80% of our expense is on goods imported from India and so it’ll affect our rupee reserves, most of which is exhausted currently.”
On the top-down pay hike structure, the Lyonchhen said that the Commission did not base its report and recommendations on the basis of a top-down approach. “What they have done is try to rationalise and streamline the entire salary structure and then give value in terms of enhanced remuneration proposals to those positions and skills with the highest value, that will make the biggest difference in terms of efficiency and productivity in the civil service,” he said.
He also said that any higher incentives at other levels would negatively affect the private sector as well as the general labour market, including the rural workforce and rural labour costs.
The prime minister said that the public would get adequate time to debate, once the cabinet decision on the pay hike is handed to the assembly and put up on the websit.
The Pay Commission’s Proposals were studied by MoF, who gave their own report, for the cabinet to take its final decision.
By Tenzing Lamsang
