While many may think that constituting the 6th Pay Commission, followed by the pay revision is a measure to retain civil servants, the Finance Minister (FM) Namgay Tshering said that the main objective of the revision is to address inflation.
During discussions on the revision yesterday (June 23, 2023), the FM also said that the government formed the 6th pay commission on Royal Command as part of civil service reforms and to address inflation that ensued after the Covid19 pandemic.
He said that the revision envisages to link the raise with a successful civil service reform. The minister further added that the pay revision has meritocracy benefits, which would ensure that in the long run the country would be able to make the best use of civil servants and also to select the best candidates for the country and the people.
“The aim of the current pay hike is not to retain the civil servants from going abroad. Rather it is to address inflation in the country,” the minister said. Similarly, the opposition leader (OL), Dorji Wangdi said that the main aim and the objective of the 6th pay commission is to address inflation in the country.
The OL shared that currently an individual spends about Nu 19,374 in a month to buy necessary commodities which is very expensive. He further said that the pay revision is also aimed at motivating civil servants as a part of the civil service reforms.
Meanwhile, the 6th Pay Commission’s report also states that there were cases in the past where pay revision led to inflation of meat prices where the Government had to intervene and regulate prices. Towards this end, the Committee has observed the importance of the government to strike a balance between addressing the needs of public servants and supporting the private sectors. The committee has also recommended that concerned agencies should strictly monitor inflation and pointed out that the Road Safety and Transport Authority (RSTA) (now Bhutan Construction and Transport Authority), for instance need to monitor and control inflation in the transportation sector, specifically the taxi and bus fare. In addition, the report stated that the Department of Trade or Office of the Consumer Protection must play proactive roles to advocate and educate consumers on Consumer Protection Act to avoid unreasonable upsurge of goods and services, and monitor house rent as per the Tenancy Act and monitor accordingly.
Meanwhile, concerning pay revision of corporations, especially Druk Holdings and Investment (DHI), the finance minister said that DHI has their own separate service rules and regulation.
Concerning the private sector, the report by the economic and the finance committee has stated that with the introduction of pay revision for public servants, it can increase the overall purchasing power and potentially raise the demand for goods and services.
“A significant pay revision for public servants may create pressure on private employers to match or compete with the increased wages offered in the public sector. Private employees may experience higher living cost, potentially negating any positive effects from wage increases,” the report states.
Sherab Dorji from Thimphu
