MoF to issue amended SOE salary notification

Tshering Dorji

While employees of state-owned enterprises (SOE)  are busy doing their maths,   the finance ministry has asked the head of SOEs to hold the revision until an amended notification is issued.

The finance minister, yesterday evening, said that the notification was misunderstood by most SOEs and to bring about clarity and details, the notification is being amended. He said that the amendment would be ready and that it will be issued to the SOEs today.

Sources said that different SOEs have different kinds of allowances and incentives, which are agreed between the board and the management. As far as the companies perform and live up to their mandate and achieve their targets, it is implied that government will grant the board and management the authority to provide certain allowances like tea, fuel, communication and skills oriented incentives.

For the sake of rating the PBVI, the government will not only consider the financial targets but also rate the activities executed for the purpose of fulfilling social mandates, because not all SOEs are profit oriented. These kind of details have not come out very clear in the notification issued earlier.

One of the issues that is coming out from SOE pay revision is on the classification of SOEs. Earlier SOEs were segregated into two categories- Schedule A, whose paid-up capital is more than Nu 300M and Schedule B with paid-up capital of less than Nu 300M. The pay scale of schedule A companies, which basically comprise of the Bhutan Development Bank and National Pension and Provident Fund, are maintained higher than the pay of schedule B SOEs. The current notification treats all SOEs the same.

The withdrawal of position specific allowances, mainly granted to General Managers and above in some SOEs like Bhutan Development Bank has impact on the revision. 

Some of profit making companies said the employees lose because the annual bonus is being done away with. Instead the PBVI, which replaces the corporate allowance is not fair. “PBVI should not be treated as corporate allowances because it depends on companies’ performances. Corporate allowance is an incentive to work in a corporate entity because we are not entitled to vehicle quota, government quarter and medals,” justified one corporate employee.

In the earlier regime 25 percent of corporate allowance is paid every month and bonuses are paid at the end of the year  based on profitability of the SOEs.

 The bottom line, according to employees of the SOE is that both bonus and corporate allowance are now subsumed in PBVI. “Annual bonuses, subject to companies’ performances are one of the means to save for emergency situation,” said an employee of Bhutan Development Bank.

The introduction of House Rent Allowance, another corporate employee said should not be treated as added incentive because when HRA was granted to civil servants house rents have spiked. “Today a three bedroom apartment in Thimphu can cost a minimum of Nu 12,000 in the outskirts and Nu 15,000 in the core city area,” he said adding that this is one of the impacts of HRA that was given to civil servants.

In essence, some government officials claim that a corporate employee at the P-level in civil service is getting a raise of about 53 percent (18 percent hike on basic salary, 20 percent HRA, a minimum of 15 percent PBVI). However, in absolute terms HRA and PBVI are tied to the basic, which leaves an increase of between Nu 2,000 to Nu 6,000 depending on the pay scale.

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