The Fourth Pay Commission has recommended not to adopt the disbursement of salaries fortnightly at this point of time.
The government had pledged that it would provide realistic salaries and allowances to civil servants, instituting fortnightly salaries to enable flexible use of it for those that need them.
Prime Minister Dr Lotay Tshering, speaking about this pledge during one of the Friday Meets in February, said that fortnightly paycheck would encourage civil servants to save more. He said that since civil servants depended on the monthly paycheck, their personal financing outlay had to wait until the month ends.
The existing pay and allowances for the public servant are disbursed on a monthly basis.
According to the report, the commission reviewed and deliberated on the possibilities of changing salary disbursement from monthly to fortnightly in order to generate more economic activities.
The commission also sought views from various agencies and dzongkhags in order to obtain broader feedback.
However, the report states that the public servants are in favour of monthly disbursement system which is easier to manage. This is because all the remittances of the employees like provident fund, life annuities, and loan EMI (equated monthly instalment) are remunerated on a monthly basis.
The existing systems of the stakeholders such as National Pension and Provident Fund, Financial Institutions, and Revenue and Customs are also designed to receive payment on a monthly basis.
Therefore, the report states that any change in the disbursement frequency of salary would require prior consultations with the stakeholders to modify the existing system.
The commission also deliberated on the possibility of paying 50 percent of take-home salary on a fortnightly basis and all remittances at the end of the month.
“Since the major portion of net salary income is earmarked for house rent and utility payments, the net disposable income is minimal, which may not generate the desired economic activities or benefits,” it states.
Moreover, it states that the tendency to spend the cash-in-hand earlier, leading to insufficient cash at the end of the month to pay house rent and utilities cannot be ruled out.