Government recommends bottom-up pay revision

The government has made changes to the fourth pay commission’s recommendations on the pay revision with an increase of 6% at the highest level of position to 35% increase to the lowest level.

The government has proposed to decrease the salary raised for Prime Minister to executive level among the civil servants and increased the raise for professional and management levels (P) to Elementary Service Personal (ESP).

Finance Minister, Namgay Tshering, presented recommendations for pay commission at the parliament on Wednesday. He presented the pay revision as a money bill.

Finance minister said that based on the recommendations of the fourth pay commission, the government has considered the revision of pay, allowances and benefits of the public servants.

Lyonpo mentioned that narrowing the income gap has ensured that the maximum benefits of the revision are passed on to the lower position levels of the public servants.

The salary of the lowest position level ESP in the public service is revised from Nu 7,000 to Nu 9,450 which is increase of 35%.

According to a press release from the Prime Minister’s Office (PMO) the revision is not intended to “even out” the pay and entitlements of different levels. “Instead, we are trying to ensure that our public servants are compensated and incentivized for their responsibilities, and also to ascertain an income that matches economic reality of the country,” it states.

The press release also states that “in the spirit of narrowing the gap, we tried to increase incentives for the ESP and GSP staff, the lowest paid in the public service, to the highest possible.”

Besides a raise of 35%, the pay revision also ensures Nu 3,500 monthly house rent allowance.  This would raise the gross pay to Nu 12,950 monthly for ESP and Nu 14,005 monthly for GSP.

“Except for some core urban areas, it should comfortably cover house rents of the support staff in most of the districts,” it states.

The Finance Minister mentioned that although pay and allowances of the Local Government functionaries were revised in 2017, the government has considered revision ranging from 14% to 24% in order to maintain parity with other public servants.

“While endorsing the recommendations of the commission, certain changes have been made in the recommendations in keeping with the principle of narrowing the income gap,” Lyonpo said adding that based on certain implementation challenges, the recommendation of the commission for introduction of Performance Based Incentive has not been considered by the government. 

The government recommends the revision of 6% for Prime Minister, cabinet ministers and equivalent positions on the existing pay scale while the pay commission has recommended to 14%. The salary increase for Prime Minister is Nu 190,800 from Nu 180,000 which results in saving of Nu 14,400 as compared to PC recommendations.

The government has reviewed and considered revision of the pay scale of the deputy speaker of National Assembly and the deputy chairperson of National Council and Members of Parliaments by 12%.

The government reviewed and considered the revision of the pay scale of the chairperson of the Anti-Corruption Commission, the chief election commissioner of the Election Commission of Bhutan, the Auditor General of Royal Audit Authority, and the chairperson of Royal Civil Service Commission by 12%. The government similarly considered revision of the pay scale of the Drangpons of Supreme Court, Chief Justice of high court, the Drangpons of the high court and the commissioners or members of constitutionals offices by 12%.

The government reviewed and considered revision by 6% for the chairperson and 12% for the members and attorney general by 12%.

While endorsing the recommendation, the government has considered a higher percentage revision of 35% to provide higher take home pay at lower positions of the public servants. The government has also considered higher percentage of increase to General Service Personal (GSP) to 30% increase.

The government has considered revision of 18% to 24% for Royal Academy of Performance Art and Para regular since their pay scale is mapped with the equivalent positions in the civil service.

The government has also considered the revision of pay scale of NFE instructors to 30% with increment and 24% for the Gaydrung.

The government while endorsing the recommendations has considered revision ranging from 12% to 24%.

For the cabinet secretary, the pay commission has recommended 14% increase while the government recommends a 12% increase and for the government secretary the pay commission recommends a 14% increase while the government recommends a 12% increase.

For the executive (EX) levels and specialist (ES), the pay commission recommends 15% increase while the government recommends 14% increase.

For the professional and management categories, the pay commission recommends 16% increase while the government recommends an 18% increase. 49% of the civil servants constitute P category.

For the supervisory and support categories pay commission recommends 18% increase and government recommends 29% increase. 49% of the civil servants constitute S categories.

For the operational categories, pay commission recommends 21% increase and the government recommends 24% increase.

The pay scale for all other public servants mapped with position levels of the civil service will be revised as per the equivalent positions in the civil services.

The Speaker declared the Pay Revision Proposal as a Money Bill in keeping with the provisions of the Constitution and the Public Finance (Amendment) Act and referred to the Government’s Pay Revision Report along with the Money Bill to the Economic and Finance Committee for review. The Committee will present its review report to the House on 10th June, 2019.

Financial implications

The net annual financial implication from the revision of pay, allowance and benefits is estimated at Nu 4.53bn. This is an increase of 6.9% from the fourth PC recommendations.

The proposed pay revision is included in the outlay of the 12thFYP and is to be financed by the domestic revenue. The major source of financing would include revenue from commissioning of the Mangdechhu Hydropower Project.

This increase in salary revision is also expected to generate additional revenue from personal income tax besides fiscal measures in subsequent fiscal years. Further, with the proposed change in the public servant’s vehicle import quota system, if majority opt for the monetization, revenue collection from sales tax and customs duty is also expected to increase domestic revenue.

Dechen Dolkar from Thimphu