The Fourth Pay Commission has recommended the government to introduce a “First Home Loan Scheme” to promote house ownership. The 2nd Pay Commission had also proposed a similar recommendation in 2014.
Reasoning that the affordability of owning a home will continue to be the main factor in public housing, as a policy matter, the Commission report recommended loan scheme that would help civil servants to acquire or build one’s first home with support from the government on land lease.
The loan scheme would also provide access to basic building materials like timber and sand at a concessional rate, and subsidised interest rates and long-term housing finance from dedicated housing finance institutions.
The report stated that this new scheme would drive other coordinating factors in creating a vibrant public housing scheme. Citing Singapore as an example where over 90 percent of the population owns personal homes, such loan scheme would also promote the public-private-partnership (PPP) in general the overall housing market according to the report.
As of now, there are only 2,073 government-housing units with National Housing Development Corporation as against 29,543 civil servants across the country according to the report.
Although lump-sum house rent allowance of 20 percent of the basic salary was introduced for the civil servants in 2014 (some sections receive up to 30 percent), this was not adequate to cover the house rent expenses of private flats.
As per the Bhutan Living Standard Survey 2017, house rent comprises large share of monthly household expenditure, especially in the urban areas. The Population and Housing Census of Bhutan (PHCB) 2017 also revealed that almost 38 percent of the Bhutanese population is living in urban areas and the pace of migration is alarming.
However, the Pay Commission has reported that initiative is already underway in organising housing industry where work and human settlement ministry is in the process of revising the National Housing Policy (2019). This would address the existing policy deficiency and clarifying the institutional framework for housing development.
NHDCL is also working on its strategy to improve public housing capacity and National Land Commission is now looking at zoning the land in the dzongkhags for housing development.
The RMA is also in the process of setting up a dedicated housing finance institution (NBFI) in consultation with ADB and finance ministry.
The government during its campaign period had also pledged under the affordable housing to identify adequate space and areas for low and middle-income housing, which is in keeping with the vision of narrowing the gap. The government has also pledged to subsidise home interest rates for low-income groups for a specified period for individuals and families, as well as, builders of low-income residential housing.
Also it has pledged to introduce home ownership schemes for government and private sector employees, which would consider implementing NHDCL to build at least 2,500 flats or homes around the country for home ownership, among others.
Pay RBP at par with RBG and RBA
The Pay Commission has recommended the government to revise the pay, allowances, benefits and other emoluments for RBP at par with the Royal Body Guard and Royal Bhutan Army to maintain parity amongst the nation’s security forces.
The report stated that because RBP is placed under the Ministry of Home and Cultural Affairs, the revision came under the purview of the Pay Commission. “RBP is also considered an important part of the nation’s security force and, therefore, the government should revise,’ the report states.
The government had pledged to review and revise working conditions and salaries of RBP personal to ease long duty hours and appropriate compensation for additional duties in the 25 pledges in 120 days. The government had listed this as achieved in 120 days because the Pay Commission was formed to review salaries and allowance along with the RBP personnel.
Yangchen C Rinzin