The Basic Pay Hike
The Cabinet released the fourth pay commission report which recommends a 14% to 29% pay hike.
For civil servants the pay hike recommendation is 14% to 21% hike.
It has a higher hike of 21% for O4 to O1 level, 18% for S5 to S1 level, 16% for P5/SS4 to P1/SS1 level, 15% for Ex/Es 3 to Ex/Es 1, 14% for Government Secretaries and Cabinet Secretaries.
There is a 14% pay hike recommendation for Ministers, MPs, Constitutional posts, Drangpons of High courts and Supreme court, Commissioners and members, Attorney General, Privy Council,
For ESP personnel the hike recommendation is 29% while for GSP it is 23%.
It recommends a 15 percent hike for the Thrompon given that other local government figures already got a hike in 2017.
Non Formal Education Instructors would get a 29 percent hike like the ESP while Para Regular staff would get a 16-21 percent hike and RAPA staff would get between 18 to 21 percent hike.
The Pay Commission recommended that the revision of pay, allowances and benefits be implemented with effect from 1st July, 2019.
A 7% Provident Fund hike
The Commission recommended increasing govt’s PF contribution by 7% from 11% to 18% while civil servants contribution will remain at 11% taking total contribution to 29%.
It recommends increasing Nu 1.5 mn gratuity ceiling. It proposes that pension benefits be tax free. The report recommends that the PF scheme be extended to ESP and GSP employees.
A 10% Performance Based Incentive (PBI)
The Fourth Pay Commission report recommends a 10% of total annual pay as a performance based incentive.
Of this 5% will be based on the Individual Work Plan (IWP) performance and another 5% will be based on the performance of the department or Annual Performance Agreement (APA).
The report recommends increasing Teacher Allowance to 20% of recommended minimum pay scale irrespective of number of years served.
To retain and motivate teachers additional allowance is recommended based on Bhutan Professional Standards for teachers.
These are 10% for Proficient Teacher, 20% for Accomplished teacher, 30% for Distinguished teacher.
There is a lump sum increase in allowances for all medical and clinical staff based on their position levels.
New allowances like Critical care allowance of 2,500 per month, On-call allowance for doctors doing overtime with a limit of three hours and day and five hours a day during weekends and night duty allowance of 500 per night have been introduced.
The Radiation allowance had been increased from Nu 1,500 to Nu 2,500 per month.
The uniform allowance fro nurses has been increased from Nu 4,500 to Nu 5,200.
The Pay Commission report recommends increasing the House Rent Allowance from 15% to 71% on the existing HRA.
The increase is on the existing HRA and not the total pay.
The recommended increase on existing HRA is 21% for O1 to O4, 18% for S5 to S1, 16% for P5/SS4 to P1/SS1, 15% for EX3/ES3 to EX1/ES1 and 71% for Government and Cabinet Secretary.
A 14% hike is recommended for Ministers and MPs. A 71% HRA increase is recommended for various Constitutional post holders.
The increase for the higher levels is because the pay commission has recommended increasing the 20 percent of basic HRA to 30 percent for secretaries and constitutional post holders.
MP’s fuel and maintenance allowance has been increased from Nu 7,000 to nu 10,000 per month while the driver allowance has been increased from Nu 6,000 to Nu 10,000.
Domestic helpers of ministers and constitutional post holders will be paid Nu 9,000 to Nu 11,700 equivalent to ESP.
Foreign Service Entitlements are recommended to be increased. The biggest increase in Foreign Allowance and Representational Grant is to the New Delhi Embassy given its importance and need to attract best diplomats.
The monthly Children Education Allowance (CEA) is also increased in all Embassies.
Despite some proposals there are no changes in the allowances of Anti-Corruption Commission, Royal Audit Authority and Internal Auditors.
There are no changes in the Patang/Gentag Allowance, Discretionary allowance, Leave Travel Concession (LTC), High Altitude allowance, Cash Handling allowance, Overtime allowance, Vehicle purchase allowance (lump sum) for Member of Parliamen, Local Government allownces and sitting fees, Carriage charges for Personal Effects during Transfer and Retirement and Ex-country Travel Daily Subsistence allowance.
The Pay Commission recommends reducing mileage from current Nu 16 per km to Nu 10 per km for all civil servants from EX to S level to save costs and prevent misuse.
Incountry DA for S-1 and below is increased from 500/750 to 1000, DA for P1-P5 is increased from 1,000 to 1,500.
DA for Ex3/Es3 to MPs and Constitutional posts is increased from 1,500 to 2,000.
The report recommends revision of DA rates from 20% to 50% when both food and lodge is provided for all public servants.
No fortnightly pay
The fourth Pay Commission does not recommend Fortnightly pay given remittances like PF, Pension, Life Annuities, Loan EMIs, and PIT are paid or collected on a monthly basis.
Since a major portion of net salary income is earmarked for house rent and utility payments, the net disposable income is minimal, says the report.
The pay commission also recommends a maximum salary indexation or annual increment up to five percent a year so that it can cover both inflation and pay raises.
The Bhutanese has found that when one factors in the increases in basic pay, provident fund and house rent and along with it the new performance based index the actual overall hike is much higher but it also rises income inequality (see main story on pg 1)