Clean wage system be to implemented by July next year for civil servants

The pay structure reform Act of Bhutan 2022 will be effective from July 1, 2023 for civil servants and similarly, for the National Council (NC) members, it will come into force with the election of the members of the fourth parliament. For the National Assembly (NA) members, it shall come into force with the election of the members of the fourth parliament.

With much excitement, civil servants and the people waited to hear the changes in the pay revision from the government with the expectation of a pay raise. “But as some knew, it is more of a pay reform than a pay raise,” a civil servant said.

He shared that after hearing the pay structure reform it didn’t bothered him much as there isn’t much raise in his salary. “Every time the government talks about the pay revision for civil servants, the price of the commodities in the market increases and I hope this will not happen in the coming days.”

“As per my understanding, due to this reform, annual increments and allowances are deceasing,” said another.

A private employee shared that in a way the pay structure is reasonable for civil servants, if it is a reform. “There isn’t much rise in the salary of the civil servants though definitely we the private employees with less salary compared to civil servants will have to struggle as  the prices of the commodities will rise and even the house rent might increase.”

Another employee from a Non-Government Organization (NGO) said, “Definitely with the pay revision of the civil servants, there will be changes in the markets, which, it is important to look into it by the government as the pay revision is much of a reform and structure than that of a rise in salary.”   

Another residentl in the capital said that with the revised tax rates they are already paying the revised rates. “As a housewife I am concerned if the salary will be enough for our family here after as the price of the commodities has raise already in the market.” 

Similarly a recently retired corporate employee who will soon be leaving to Australia shared that there is not such scope in the country. “I will soon be leaving my country though I had a good job, however, there isn’t much scope in our country and I hope with such reforms and transformation to benefit the future generation and not to lead them to our path.”

Meanwhile, during the introduction of the pay structure reform bill 2022 to the NA on November 14, 2022, Finance Minister Namgay Tshering said that with the findings of the 5th pay commission they have looked into all the prospective and finally came with the pay structure of fixed and variable pay.

The fixed pay includes monthly basis pay which, it is a minimum pay scale and annual increments and also includes Non-Pensionable Monthly Pay (NPMP) and similarly, variable pay includes Monthly Variable Compensation (MVC) and Performance Based Incentives (PBI).

The Finance Minister clarified that the pay revision is more of a pay structure than a pay raise. “With the findings of the 5th pay commission we came up with the pay structure, which the civil servants should understand that there will be more transparency and accountability with this new pay structure.”

For instance, the 5th pay commission which was formed on November 19, 2022, it found that there is lack of transparency which, only the basic pay is reflected in the pay slip excluding other allowances and benefits.

Similarly, the 5th pay commission also found that there is more administrative burden and there are about 30 different types of allowances, and amongst others the commission found that performances were not recognized till date.  Meanwhile, about Nu 32bn was spent in the financial year 2021-2022 as mandatory expenses, which, most of the expenses includes salaries to the civil servants. Similarly, the country had Nu 33bn for the financial year 2022-2023 in mandatory expenses, which, it is , mostly used for civil servant salaries.

Sherab Dorji from Thimphu