Pay Commission recommends major hike for Local Government

A Civil service hike would only be considered once hydro revenue starts flowing in

The government on 22nd February, 2017 announced the formation of the third Pay Commission to look into the pay, allowances and benefits of the local government (LG).

The commission was formed based on the recommendations of the 2014 second Pay Commission. It said that  to attract qualified and competent local government representatives it is essential to ensure that the salaries and entitlements are made more attractive.

It is also in line with the current government’s ‘Wangtse Chirphel’ or decentralization promise to devolve not only authority and budget to local governments but also give them adequate pay and benefits, in keeping with their additional responsibilities.

In 2014 along with the civil servants LG figures like Thrompons, Gups, Mangmis, Geydrung and Tshogpas did receive a general pay hike.

However, the pay, especially for Gups and others officials at the Gewog level was still felt to be too low to attract good people. These local leaders and officials also did not get the recommended additional entitlements that even junior civil servants receive.

This will change with the 2017 third pay commission report which has asked for a substantial salary hike for Gups, Mangmis, Geydrung and Tshogpas in both the Gewog and Thromde. (Update: The hike is at 40% of the pay as presented by the Finance Minister on Tuesday.)

Currently Gups get Nu 20,000, Mangmis get 15,000, Geydrungs get 13,000 and Tshogpas and Thromde Thuemis get Nu 7,000 per month. The above are all expected to increase substantially based on the commission’s recommendation.

Thrompons have not been considered for a hike given that are already equated to the Ex-2 level pay in the civil service drawing up to Nu 50,000 per month. On top of this they get rent free accommodation or a 20 percent house rent allowance.

LG leaders from the Gup level have been brought into the government system of benefits and entitlements. As a result LG officials will now get annual increments like civil servants, the government’s 11% provident fund, gratuity and Group Insurance Scheme.

The DSA or the travel grants for Gups and Mangmis will also be revised upwards to enable them to travel more frequently to do their work.

This increase also come in the wake of past and recent experiences of the Election Commission of Bhutan (ECB) having to conduct multiple rounds of local government elections to fill LG posts at various levels, for which there were no candidates.

A government official said, “The increase and entitlements are commensurate with the current responsibilities of the local government as well as their growing new responsibilities.”

In the 11th plan itself the government has been delegating more budget and authority down to the Gewogs and Thromdes. In the 12th plan the preliminary capital expenditure to the local government has been doubled from Nu 25 bn in the 11th plan to Nu 50 bn in the 12th plan. This represents nearly half of the Nu 115 bn total capital expenditure in the 12th plan.

This budgetary increase is because activities which were budgeted in the centre in the 11th FYP has now been shifted to the local governments in the 12th FYP like schools, farms roads, Gewog connectivity roads, irrigation, etc.

The final guidelines of the 12th FYP approved by the cabinet says that in keeping with the government’s decentralization efforts, greater responsibility and resources are being shifted from the centre to the local governments. The pay commission report will be presented to the Parliament in the coming week.

 

Civil service pay hike ?

 

The pay commission also looked at General Service Personnel (GSP), Elementary Service Personnel (ESP) pay, but it was decided not to touch it for now since they already got a hike in 2014 and touching their pay would also affect the entire structure of the civil service above it in a domino effect.

The 2014 pay commission had also made various recommendations for the entitlement of diplomats and staff posted abroad in embassies and missions. Here too, it was not touched as it would have ramifications in the civil service pay structure again.

One main concern was that looking at selective pay and entitlements of a class of civil servants and support staff may effect and demoralize the other civil servants.

A government official in the know said that as far as a civil servants pay hike is concerned it would happen only once hydro project revenue starts coming in.

Of the three projects under active construction the 720 MW Mangdechu is scheduled for completion in March 2018 while the Punatsangchu II is scheduled for September 2019 and Punatsangchu I for the end of 2021.

The official said that the government would have to look at all factors before taking a decision on the issue.

The same official said that currently there was no strong demand for a hike from civil servants, especially in the backdrop of PIT exemption bracket moving from Nu 100,000 to 200,000, enhanced education deduction, lowered bank loan interest rates and moderate inflation.

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