Though the government proposed 6% salary raise to the Prime Minister, cabinet ministers and other equivalent positions and 35% to the lower rung of the positions in the civil servants, there is a huge income gap.
This accounts from the highest raise in absolute terms to the Prime Minister at Nu 10,800 to the lowest to Elementary Service Position (ESP) at Nu 2,450 raise.
With the proposed pay revision, the Prime Minister’s gross salary including allowances would be more than Nu 257,490, whereas for the ESP’s gross salary including allowances would be more than Nu 12,950, which means that the Prime Minister’s salary is around 20 times more than the ESP’s salary in absolute term.
The Prime Minister’s basic revised salary is Nu 190,800 and ESP level basic revised salary is Nu 9,450.
Similarly, the basic salary of Members of Parliament (MPs) is equivalent to the government secretaries at Nu 73,850.
However, the gross salary of an MP would be more than Nu 117,995 including the allowances, while the gross salary of government secretary would be more than Nu 90,620.
MP gets house rent allowances of Nu 22,150, communication allowance of Nu 2000, vehicle maintenance and fuel expense allowance of Nu 10,000, and driver allowance of Nu 10,000 per month. The allowance of driver is little less than the salary of operational level (O4 level) which includes the drivers in this position. The salary of O4 level is Nu 10,550.
The MPs also get discretionary allowance of Nu 150,000 per annum.
The Thrompons and EX/ES-2 basic salary is equivalent which is Nu 52,200. The gross salary of EX/ES-2 including the allowance would be more than Nu 63,640 and Thrompon’s gross salary including allowance would be more than Nu 58,200.
Similarly, the basic revised salary of Gups is Nu 33,040 and gross salary would reach more than Nu 39,540 including allowance and sitting fee charges.
The Mangmi’s basic revised salary is Nu 24,780 and gross salary would reach more than Nu 30,980 including allowance and sitting fee charges.
The Tshogpa’s basic revised salary is Nu 12,160 and gross salary would reach more than Nu 13,260 including allowance and sitting fee charges.
The basic salary of the Tshogpa is more than the basic salary of office vehicle drivers in the private sector.
It also creates disparity in same agency and ministry like those who are in contract basis and regular basis. For instance in terms of contract teachers and regular teacher, regular teachers will be getting high salary than the contract teachers.
In the private sector, the average salary of the driver is around Nu 9,500 and private office drivers do not get any allowances.
According to the labor force survey report Bhutan 2018, the overall mean monthly income for ‘working paid’ and ‘own account worker’ is Nu 14,182 and the median monthly income is Nu 10,000.
The salary raise in the civil service and public service will create a huge income gap.
According to the report, civil servants constitute 7.6%, other government agencies constitute 3.3%, agriculture and farming constitute 53.9%, public or government companies constitute 4.4%, private companies constitute 4.6%, private businesses constitute 23% and non government organizations constitute 0.5% of the population.
Since the private sector is the engine of economic growth in the country, the pay revision will have huge impact on the private sector.
As per the market trend, the lowest salary for the private sector employees would be around Nu 6,000 per month and highest salary would be around Nu 200,000.
On the PMO page on social media, Prime Minister Dr Lotay Tshering states that when they discuses pay revision of public servants, they are also reminded of all the hard working people in the private sector.
“We are well aware that you play an important role in driving our economy, respond to employment needs and bring about innovation and efficiency,” Lyonchhen states.
Lyonchhen also stated that during their tenure, they will invoke all constitutional clauses and relevant policies to encourage private sector development. A lot of work needs to be done, many loopholes have to be sealed and irregularities straightened.
Lyonchhen mentioned that for possible implications on market costs and house rents due to the pay revision, they have alerted relevant agencies to monitor.
The Secretary General of the Bhutan Chamber of Commerce and Industry and also one of the members of the 4th pay commission said they have developed the framework in the pay commission report in such a way that the even the private sector and corporations can ask for a pay revision.
He said there are only a few private companies who deal in business professionally and remunerate the employees, adding that along with additional responsibilities come the remunerations.
“There is no defined minimum and maximum salary in the private sector,” he said.
Secretary General of People’s Democratic Party (PDP) Jigme Zangpo said the pay revision has widened income gap in the country.
He said the MPs are benefited the most followed by the Prime Minister and Ministers.
“It is not a pay revision package; it is more of allowance package. It is benefiting only around more than 8,000 teachers and more than 1,000 health workers,” said Jigme Zangpo.
He also said that there is the question of sustainability, how far the salary revision can be sustained since it cannot be funded by domestic revenue.
President of Bhutan Kuen-Nyam Party (BKP) Sonam Tobgay said that the government must be delusional to think that by raising the pay of civil servants who comprise only 5% of the population, it will narrow the gap between haves and have-nots.
He said the pay revision has been significant for the parliamentarians with fat allowances of Nu 1mn cash and a free duty free vehicle quota.
“These have big financial implications on the economy but as it appears in the name of Tsa-Wa- Sum everybody wants to milk the system,” he said.
MP Dorji Wangdi said the pay revision is negligible and there is the risk of widening the income gap.
“It aggravates inequity, proliferates allowance system, poses high public finance risks, aggravates imprudent expenditure and stunning economic growth and risks general morale loss and higher corruption among the public servants,” he said, adding that the pay revision creates a gap within the same agencies and ministries among civil servants who are on the same level of position.
One of the industrialists said that in terms of our country, civil servants make more money than the private sector employees.
“There will be huge income disparity in the country and private sector employees will be despondent,” said the industrialist.
He also said that private sector will be able to increase the pay scale of private employees if government could provide incentives to the private sector.
During the Press Meet yesterday, Finance Minister Namgay Tshering there is no way that the government can directly interfere or intervene in terms of increasing the wages for those in the private sector.
Lyonpo said that they are indirectly trying to gauge their focus on strategy into private sector development. There are lots of areas in private sector development. The taxation reform, which will be discussed in the winter parliament session, is one modality to narrow the gap to equate the income between the haves and have-nots.
“Through this we are able to convince the private sector to equate the salary with public sector,” said the Finance Minister.
The education minister J.B Rai said the public expenditure is directly going down to the private sector like procurement of book and services sectors done by private sector.
“Indirectly with this public expenditure proper management it is being benefited the private sector which increasing the revenue and with increase in revenue it will increase the salary for private sector,” said the education minister.
Dechen Dolkar from Thimphu