Note: The above does not include teaching allowance and professional allowance for medical staff and others

Bitcoin powers a 50% hike for Public Servants

The total bill for the Pay Revision Bill 2023 is Nu 6 billion (bn) which is money that the government largely does not have.

However, the pay revision is being made possible by Nu 4 bn that Druk Holding and Investments is giving as a one-off top off for the 2023-24 financial year followed by another top off of Nu 4 bn for the 2024-25 financial year taking it to a total of Nu 8 bn in two years.

The DHI in turn is giving the money from its Special Projects of which the current and active one generating revenue is Bitcoin mining.

DHI has been mining Bitcoin since the last few years and has built up a stockpile. This is now being used to pay civil servants.

In fact, when the 6th Pay Commission was formed on the command of His Majesty The King, the understanding was that the bulk of the pay hike resources would come from the sale of Bitcoins by DHI.

In late April 2023 when DHI came forward to say it had been mining Bitcoin, then there had been some speculation on if DHI’s investment into Bitcoin mining is worth it, but the Nu 8 bn in commitment shows that the project not only sustains itself but is generating major returns.

The Constitution says that pay and allowances can only be met from domestic revenue. The Pay Commission report had calculated that there was a shortfall of Nu 3.299 bn.

By 2025-26 financial year the 1020 MW Punatsangchu II project is expected to come on line and will then take the burden of the hike from then onwards.

In the past, major pay hikes were given mainly when hydro projects were commissioned like Chukha in 1988, Tala in 2007 (55% hike) and Mangdechu in 2019 or when the economy did well in between, but this is the first time that a Digital project is funding a major hike.

The main purpose of the hike was to stem the flow of civil servants and public servants resigning and heading to Australia.

It was well known that the main reason they were leaving was for better income abroad.

The Pay Commission Report says the future sustainability has to come through efficiency gains from improved public service delivery, effective allocation and utilization of resources, right sizing of Civil Service and rationalization of duplicative and wasteful expenditures.

The 50% Hike

The 50% hike is effective from 1st July 2023 and it will come into effect along with the 5% hike given last year, the one-time fixed payment at P 1 and below and Leave Encashment and Leave Travel Concession.

This means that when both the hikes are combined it is 55% hike at the higher level and 76% hike at the lowest level.

One of the criticisms coming for the hike is that in past pay hikes there was a conscious effort to give lower percentage hikes at the higher levels and much higher percentage hikes at the lower levels.

However, this time around a flat 50% hike has been given for everybody in the civil service from the Cabinet Secretary down to support staff.

This is because the main loss of civil servants has been from the Professional and Management Category.

The thinking for the Executive and Specialist category is that this group of senior officers have the heaviest responsibility and so it would only be fair to give the same hike percentage.

Apart from civil servants the 50% hike has also been given to the Prime Minister and Cabinet Ministers, Cabinet Ranked people like the NA Speaker, NC Chairman, Supreme Court Chief Justice, Opposition Leader and Privy Council Chairman and also MPs.

The removal of the vehicle quota for MPs was seen as a loss of an important perk for MPs and some even predicted that good candidates will not come in the future so the pay hike will be welcomed by them.

Constitutional Post holders have all also got the same hike.

MBBS Doctors and Dentists professional allowance is increased from 45 to 55% in addition to the pay hike.

Medical Specialists professional allowance increased from 55% to 70% and medical sub specialists professional allowance increased from 60% to 80%.

There was some confusion over the pay of teachers and nurses who are resigning in large numbers.

The Pay Commission report had recommended to take the 35% (0 to 10 years) 45% (11 to 20 years) and 55% (more than 20 years) allowances of teachers and instead of linking it to the years wanted to link it to proficient tests and assessment but the cabinet shot it down and so it was not in the final bill.

Teachers will continue to get the allowances like before based on the number of years, and since their basic pay has shot up by 50% it will also mean an increase in the allowances which is based on the basic pay.

Nurses and clinical staff will also continue to get the same 35%, 45% and 55% allowances based on number of years, but since their basic pay is up by 50% their allowances will also increase like teachers.

Who is getting what

When it comes to who is getting how much in the civil service the highest hike is for the Cabinet Secretary who will get Nu 46,300 more per month after combining the 2022 hike of 5% and 2023 hike of 50%.

Government Secretaries get Nu 40,615 and the hike for Ex/Es1 to Ex/Es3 ranges from Nu 34,220 to Nu 24,265.

The hike for P 1 to P 5 ranges from Nu 21,115 to Nu 12,855.

The hike for S1 to S 5 ranges from 12,485 to 9,470. The hike for O1 to 0 4 ranges from 9,315

to 7,805.

The GSP staff get 7,780 and ESP staff get get 7,200.

When it comes to public servants the highest hike is for the Prime Minister getting Nu 104,940, followed by ministers (or minister rank) at Nu 75,790 and MPs at Nu 40,615.

The paper has a done a calculation of the hike and the gross pay after that (see box on pg 1.)

Heads of Constitutional bodies get Nu 46,300 and Commissioners get 36,980. Supreme Court Judges get 46,300 while High Court judges get 40,615.

When it comes to local governments Thrompons get 28,710 as hikes, Gups get 19,170, Mangmi and Dzongkhag Thromde Theumi get 14,630 and Thromde Theumi and Tshogpa get a Nu 8,690 bump.

Non formal education instructors get Nu 8,005 while ECCD Facilitators get a 9,470 hike.

The Pay Revision Bill has brought the Royal University of Bhutan (RUB), Khesar Gyalpo University of Medical Sciences of Bhutan (KGUMSB), and Jigme Singye Wangchuck School of Law (JSWL) into the clean wage system like civil servants, however, preserving their teaching and non teaching allowances.

The Finance Minister Namgay Tshering while presenting the pay revision bill said that according to the Bhutan Living Standard Survey a family would need a minimum of Nu 19,374 per month to live in urban areas.

MPs gave their feedback in terms of its impact on inflation and the private sector and the need to control the price of goods and rent, and also in terms of giving a little more at the bottom of the ladder.

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