The government proposed to revise the monthly pay of local government (LG) members by 40 percent, their daily allowance (DA) by 33 to 66 percent along with the entitlement to claim mileage while travelling outside their gewogs and thromdes.
The revision will be effective from July this year.
There will be no pay rise for the civil servants, and the pay revision is not applicable for the four thrompons.
The salary of the LG members has been revised by 40 percent on the existing pay and introduced pay scales with two percent annual increment for LG members except for thrompons.
After the revision, the increase in take home salary for gups will be 18 percent, 21 percent for mangmis, and 22 percent for tshogpas.
“To facilitate LG members to travel within and outside gewogs or thromdes for monitoring of development programmes and activities, the government has decided to revise daily allowance by 33 percent for gups, 50 percent for mangmis, and 66 percent for tshogpas,” Lyonpo Namgay Dorji said.
In addition, the government has approved the mileage claim for gups at Nu 16 a kilometre and others at Nu 6 a kilometre for travel beyond 10 kilometres.
The special responsibility allowance for chairpersons and deputy chairpersons of Dzongkhag Tshogdu have been revised and new rates for communication allowance and post-service benefits for the LG members have been approved.
However, the minister said that the Third Pay Commission (TPC) said that with the delay in the commissioning of three hydropower projects and not realising the additional revenue from these projects, revision of pay and allowances of the entire civil service at this juncture is not affordable.
“As such the government has decided not to revise foreign service entitlements and pay and allowances of the GSP and ESP,” Lyonpo Namgay Dorji said.
The TPC did not recommend revision for the foreign service entitlements and general support personnel (GSP) and elementary support personnel (ESP).
The commission report stated that while the foreign service entitlements was revised in 2014 when the government revised the salary of the civil servants, revising the GSP and ESP pay would have a cascading effect on pay scales of the entire civil service.
For instance, with the marginal increase or 10 percent increase of the pay scale of GSP, Nu 8,080, their revised pay becomes higher than the pay scale (Nu 8,505) of the operational personnel (O4 level) of civil service, thereby, requiring similar revision at the O4 level. “This will result in revising the pay of all the civil servants,” the Third Pay Commission report stated.
In 2014, when the government revised the pay of civil servants, the GSP’s pay was raised 25 percent with 20 percent house rent allowance. ESP got a consolidated pay revision of 40 percent.
The commission report stated that any revision of pay at the ESP level will also raise expectation for revision in the wage rate of the national work force, which would have larger implication on the economy.
The net annual financial implication of the revision of pay, allowances, and benefits of LG members is about Nu 135.406 million (M). In addition, the net implication on account of gratuity because of pay revision is about Nu 40.199M per term.
Since the revision was for a specific group of public servants, the commission is of the view that it will have a minimum spiralling effect on the private sector. Instead, the commission’s report stated that with the increase in disposable income of the LG members, there will be an increase in the demand for goods and services at the LG level, which will promote rural business opportunities and income of the local communities.
“Based on the Macro-Fiscal Framework, the Macroeconomic Framework Coordination Committee has determined the coverage of recurrent expenditure by domestic revenue at 121 percent in fiscal year 2017-18 after including the proposed revision. Therefore, the net financial implication of Nu 135.406 million would be financed by the revenue surplus,” the commission’s report stated.
Lyonpo Namgay Dorji said: “Chukha power tariff, which is due from January 2017, will generate additional revenue of at least Nu 284.506M annually.”
The expected additional revenue in the form of personal income tax is estimated to be Nu 2.415M and health contribution of Nu 2.503M.
Lyonpo Namgay Dorji said recognising the importance of the local government, and as required by the Local Government Members Entitlement Act 2015, for the government to determine the pay allowances and retirement benefit, the Third Pay Commission was established on February 20, 2017 to examine and recommend revisions of pay, allowances and benefits of the LG members.
He said the commission was also directed to review and recommend revision of the foreign service entitlements and the pay and allowances of the GSP and ESP.
“The commission submitted its report to the government and presented the recommendations to the Cabinet on May 1,” he said.
There are 1,499 LG members consisting of gups, thrompons, mangmis, dzongkhag thromde thuemi, gewog tshogpa, and thromde thuemi.
Gup’s salary was Nu 800 in 1991, which increased to Nu 20,000 in 2014. Mangmi salary increased to Nu 15,000 in 2014 from Nu 1,500 in 1999. The salary of gewog tshogpa and thromde thuemi increased from Nu 1,000 in 2007 to Nu 7,000.
Thrompons started with Nu 38,475 monthly salary in 2011 and with 20 percent house rent allowance. Today LG members receive a consolidated pay without annual increment.
“In LG elections 2016, only 40 graduates contested, of which 24 were elected as guns, indicating the need to make the remuneration package more attractive,” the Third Pay Commission Report stated.