Govt. working to increase the national minimum daily wage rate

The pandemic affected implementation of a very important social support for the people

Since 2014, the National Minimum Daily Wage Rate (NMDW) in Bhutan has been Nu 125 per day. The National Minimum Daily Wage Rate raise (NMDW) couldn’t be implemented due to budget restraints. However, the Ministry of Labour and Human Resource (MoLHR) is working on plans to increase the NMDW as pledged by the current government, according to the MoLHR minister, Karma Dorji.

During his first question hour at the National Assembly (NA) yesterday, Lyonpo said that the NMDW for the National workforce is in the process and they have already submitted the proposal to the ministry of finance, who in turn allocates the budget.

Maenbi-Tsaekhar Member of Parliament Choki Gyeltshen said that increasing the minimum daily wage rate for the national work force has been one of the pledges of the government and it couldn’t be implemented even now.

The MP said that Nu 125 was insufficient given the continued inflation and high standard of living, particularly in the capital, and that they were among the lowest paid as construction workers also received Nu 600 per day and farmers laboring in the fields received Nu 400.

In response, MoLHR Lyonpo Karma Dorji said that the country’s economic situation and the effects of COVID-19 came as surprises which affected implementation of the NMDW.

They are still being processed, though, and will be put into action when the budget allows it.

He said that increasing the NMDW to Nu 460 will cost approximately Nu 350 million in total, for which the government has been gathering information on the nation’s taxes and revenues from the Department of Revenue and Customs (DRC).

Meanwhile, attempts to revise the minimum wage were made in 2017 and 2020, without success. The wage was revised in 2011 in accordance with the rate of inflation.

It was again updated in 2014, based on the national poverty index (NPI) and inflation rate.

Meanwhile, along with the proposed NWM of Nu 460, the ministry has also proposed the provident fund (PF) and gratuity for the national work force.

Additionally, increasing the NWM was one of the important pledges of the current government, justifying that added expenditure corresponding to change in time, the current minimum wage of Nu125 is not even sufficient to make ends meet.

Meanwhile, during the earlier sessions of the parliament, the ministry cited the necessity for the digitization of the current tax records at the company level for the most recent year available, as well as the gathering of up-to-date data on firm-level revenues, expenditures, and employment, as recommendations made by the World Bank (WB) on NMW in 2020.

The WB suggested conducting a thorough investigation to reset NMW using a more rigorous approach that takes into account workers’ productivity.

According to Lyonpo, it has been two months since they are working on it and hopefully, when there is enough budget and the economy of the country improves, they will be able to implement the increased wage rate for the national workforce.

Tshering Pelden from Thimphu