SOE pay hike held up awaiting DHI hike proposal

The 3,000 or so employees of the State Owned Enterprises (SOEs) under the Ministry of Finance (MoF) have been waiting with bated breath for more than a month now hoping that their pay hike will be approved any day.

However, they will have to wait a little longer to know the final outcome as the MoF is awaiting the pay hike proposal of the Druk Holdings and Investment which has around 7,000 employees.

DHI and its companies are working on the hike but there is no indication when it will be submitted.

This is because the MoF will have to calculate the total impact of the hike by both the MoF SOEs and DHI on the national revenue and expenditure and budget.

The other reason MoF SOEs have to wait is that their proposals are being looked at by the MoF and its teams and the MoF is trying to get the SOEs to cut expenditure or re-engineer costs, improve efficiency and do expense management.

The MoF would not like to do anything in silos and it also wants to avoid the situation where the hike in some places is much more attractive and everybody wants to migrate there.

A source said that SOE staff are comparing the pay hike but what must be kept in mind is that civil servants get a clean wage. Matters are further complicated as some SOEs have submitted a hike on the basic pay when the even the civil servants did not get a hike on the basic pay as it would mean higher Provident Fund and other costs.

MoF is also looking at flexible innovations to cut costs.

The source said that in the case of SOEs no number or percentage has been fixed and the flexibility has been given to them and they are even allowed to convert the hike into higher performance bonuses.

At the end of the day the problem is that in reality there is literally no money in the annual budget to give a major hike to SOEs or DHI for that matter.

However, in an election year the politicians are determined to give a hike and the delay is as the MoF officials see how best to manage resources.

Unless DHI can increase its revenue its own hike can lead to a drop in revenue for the government through less dividend and taxes.

Add to that is the hike for SOEs, many of which are not profitable and need support.

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