And so comes another raise!

It’s heartening for civil servants that there will be another salary raise in the 12th Plan, according to the draft plan drafted by GNH Commission. Of the Nu 73bn provision for pay and allowance in the 12th Plan, Nu 20bn would reportedly cover the salary raise.

The upcoming salary raise is timely given the last raise coming some five years back. The raise, therefore, is considerable considering the increasing cost of house rents, fuel and transportation cost, and other basic commodities such as food, oil and vegetables.

The revenue for the upcoming raise is expected to be met from the revenue from hydropower projects, which are presently under construction and scheduled from completion in a year or two. However, there are concerns too when deadlines for hydropower projects have to be kept on deferring for years and the increasing cost of the projects, thus increasing pressure on the country’s already burgeoning debt.

The country reportedly had USD 2.51bn or over Nu 163bn in external debt as of September, 2017. And of Nu 120.1bn Rupee debt, hydropower debt constitutes 94 percent of the Rupee debt (amounting to Nu 113bn). This again constitutes almost 70 percent of the total external debt.

Additionally, it would also be worthwhile to see whether the pay raise really benefits the civil servants. This is because there have been cases where the raise, intended to benefit civil servants and especially those in the lower income group, hasn’t done much to help the target beneficiaries.

If we look at the pay raise for civil servants and parliamentarians in 2013, it didn’t help the civil servants much. While the actual raise only translated to five to six percent, considering inflation and other factors, for the lowest income level civil servants, the difference in revision, however, was much greater for parliamentarians and ministers. Civil servants then got a 20 percent raise with another 20 percent as housing allowances, the Prime minister and cabinet ministers then got a whopping raise of 131 and 67 percents respectively, 21 percent hike for parliamentarians, and increment in vehicle allowance from Nu 700,000 to Nu 1 mn. The revision then accorded the highest raise to those already getting hefty pay, while making it appear that those at the lowest rung also got equally.

Simply put, it’s the most-needy civil servants that should benefit from the upcoming raise. As has been the trend, a few raise proposals in the past only seemed to have benefitted people at the higher echelons, parliamentarians and ministers, while civil servants in the lower rung and private sector employees gruelingly experience the looming ripple effects of the raise. The raise must ensure that it doesn’t exacerbate income disparity and further widen the chasm between the haves and have-nots. Measures must be taken to address these tangible effects of the pay raise.