One of the unfulfilled pledges of the DNT government was its pledge to increase the wage rate of the National Work Force (NWF) to Nu 450.
The Cabinet in its last meeting on 30 October 2023 proposed for it to be nearly doubled to more than Nu 400 but left the final decision to the Ministry of Finance (MoF) to review it based on the resources and options available.
This has left the Cabinet Secretariat and the MoF in a fix of sorts, as these two agencies will now have to attempt to implement what is not a fixed cabinet directive.
While the outgoing Cabinet recommended a doubling of the wages, the concern for the MoF will be to ensure there is enough fiscal resources for it, there is uniformity and it does not lead to the ballooning of costs for the ongoing Dzong constructions and road maintenance projects. The Cabinet had given two options and that is being discussed.
A former cabinet member said this is not the national minimum wage which remains the same, but the NWF rate is for primarily roadside workers and people working in Dzong construction projects. He said an issue is of uniformity, and currently there are different work charges for different projects. He said the Cabinet has recommended increasing it from around Nu 215 to more than Nu 400 but the MoF is supposed to review it.
There are some 2,800 of these NWF workers mainly in road maintenance and Dzong construction and an earlier calculation showed that a hike for them would cost Nu 350 million a year.
There are two constraints for MoF. One concern is a tight budget and the need to avoid doing anything that would violate Constitutional clauses to fund all current expenditure from internal revenue.
The other concern is the impact a sudden and major hike can have on the private sector which has many workers.
So, a middle path out may be a giving a hike of 50 to 70 percent instead of doubling it.
The last hike of the NWF wage rate happened in 2015.
At the time, the unskilled labour who form the majority got a hike from Nu 165 to Nu 215 per day, the level 4 semi-skilled workers got a hike from Nu 180 to 234, the level 3 craftspeople got a hike from Nu 195 to Nu 254, the level 2 semi master craftsperson got a hike from Nu 220 to Nu 286 and the level 1 or master craftsperson got an increase from Nu 240 to Nu 324 per day.