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Views on the 4th Pay Commission Report 

The guiding principles of pay revision trying to meet the campaign pledge of DNT in narrowing the gap while protecting the value of money (income erosion as highlighted in the report) warrants deeper reflection particularly along the lines of equitable, fair and moral distribution. The need of the hour is not a politically correct technical report (premising on the 6 guiding principles) but rather straight- forward recommendations to support the plight of those civil servants that need the revision most.

Observations

1. Taking 14% from the operational O4 level civil servants and plugging it as the entry pay percentage for the Cabinet Secretary and Government Secretaries does not hold good reason. This lowest revision percentage of 14% benefits the highest positions by Nu. 10,525 every month in absolute terms as compared to the highest revision of 21% in the lowest positions (O4 level) benefitting by a minuscule sum of Nu. 1,790 per month. An envelope computation exhibits a wider gap of 83% increase in favor of the top civil servants. 

2. Similarly, the EX1/ES1 to EX3/ES3 gain a 15% bracket increase ranging between Nu. 8,190 to Nu. 5,805 monthly as compared to support staff S1-S5 level who only gain between Nu. 2,950- Nu. 2,005. Should the allowance be considered, the gap is further widened with 71% increase in housing allowance of Cabinet and Government Secretaries. 

3. The lowest 14% pay revision scale constituting the Prime Minister, Speaker, Chief Justice of Supreme Court, Cabinet Ministers, NC Chairperson, Privy Council Chairperson, Opposition Leader shows a conspicuous monthly increase of Nu. 25,200 for the Prime Minister and Nu. 18,200 for other equivalent positions respectively. Comparing this to an EX3 position (Director level) reveal a wide gap of Nu. 19,395 when linked with the increase  of the Prime Minister, and Nu. 12,395 when linked with the Cabinet Ministers and other equivalent positions. Similar widening gap incentives are noticed through the increases linked with deputy speakers of both the houses, members of parliament, constitutional post holders and other equivalent position holders. 

4. The challenge on implementing Performance Based Incentives (PBI) will largely depend on sincerity and practical nature of assessment of Annual Performance Agreement (APA) and Annual Performance Targets (APT) disallowing crafting annual reports suiting the agenda of the government in power. The practicality of introducing the PBI needs a thorough study, as it is more appropriate in the corporate and private sector. 

5. Red Kabney (Nyie-keim) is an honor bestowed upon by His Majesty The King and cannot hold a price tag. The earlier Nu. 100 was listed only as a token and not meant in any near degree as an allowance. Such honor is sacrosanct and priceless and any attempt to claim monetary benefits of such priceless honor is at best undignified proposition. 

6.Specialty Responsibility Allowance (Nu.12, 800 for Heads and Nu.6,700 for Commissioners) to constitutional offices of ACC, RAA, ECB and RCSC does not merit justice because such post holders have benefitted working through the civil service system and opted to accept the fix term posting. Similar logic applies for the 30% housing allowance and full vehicle quota. 

7. With new technology emerging each year and competitive business, communication cost is meant to decrease, but contrary to it, the Fourth Pay Commission proposed to increase the communication allowance to Nu. 2,000 per month from the earlier Nu. 1,000. 

8. While MPs are proposed an allowance for ghost drivers of Nu.10,000 per month (increase from earlier Nu. 6,000), the mileage rates for civil servants not eligible for designated vehicles are reduced to Nu. 10 per kilometer from the earlier Nu. 16. The lack of prudent and inefficient controls can be no excuse to penalize for no crime committed. The Commission should have assessed the cost-benefit of maintaining mileage vis-à-vis the cost of hiring. 

9. One-time vehicle quota free of custom duty and sales tax upto 3,000cc or an option of Nu. 1.5 million bears no justification as entitlements for the Chief Justice, constitutional post holders, justices of supreme court, Drangpons of high court, attorney general, cabinet secretary, government secretaries and Royal Monetary Authority governor. All civil servants are significant and bear rightfully important responsibilities regardless of position levels. Further, term-based post holders have travelled through the same system thus far and benefitted from it, and only later accepted these appointments. In fact, such a post falls as a swift climb in the career ladder with many wanting to opt in, knowing it is term-based. 

10.  If the government is to shoulder the cost of item 9, a rough calculation amounts to a cost of Nu. 58.5 million if monetized, while a total revenue forgone of Nu. 154 million if custom duty and sale tax exemption is chosen as an opted. While monetization of the vehicle quota will remove the moral hazard of our esteemed public servants, implementation challenges is bound to arise despite the non-transferable conditions. 

11.  The house rent allowance though appreciated, reflects a higher raise of 30% for constitutional post holders and term-based appointments while civil servants receive only 20% on the revised basic salary. 

12. This said, sincere congratulations to the Fourth Pay Commission for the task completed on time despite various challenges encountered while formulating the national pay policy. Among others, appreciation warrants the following;

a. The conversion of the consolidated pay of Nu.7,000 of the Elementary Support Personnel (ESP) to a monthly salary of Nu. 9,000 including annual increments and other benefits corresponding to an increase of 29%. 

b. Post retirement benefits incorporating additional increase in government’s share of provident fund (PF) contribution by 7% increasing it to 18%. And, increasing the pension cap at 40% of the maximum pay scale that of the cabinet secretary as compared to the earlier EX1 pay scale. 

c. Allowance increase recommended to professionals in the medical/health, teaching, aviation, ant-corruption and audit. 

Suggested recommendations; 

1. The Prime Minister, Cabinet Ministers and all Members of Parliament should forgo a pay revision in order to restore peoples’ faith in politicians and also keeping in line with DNT’s pledge of narrowing the gap. This provides the government of the day a golden opportunity to lead with example while walking the talk in meaning what they say and practicing what they preach. 

2. In pursuit to narrowing the gap pledge by DNT, all MP’s (included Prime Minister, Opposition Leader, House Speaker, National Council Chairperson, and Cabinet Ministers) vehicle quota be pegged to the level of civil servants’ existing quota exemption ceiling of Nu. 0.8 million and monetized at current market value. This is the most realistic and affordable benefit that the country can afford at this stage of development. 

3. Mandatory monetization of vehicle quota including all members of parliament, and all civil/public servants be pegged at Nu. 0.8 million. This will remove moral hazards of undignified secondary trading and unnecessary consumption, thereafter creating associated hazards of vehicle congestion, outflow of foreign currency and structural economic distortions. 

4. Going beyond the Fourth Pay Commission Report and recognizing economic distortions, the government should sincerely consider phasing off with the vehicle quota in the long run by annualizing it in the pay scale over time. 

5. All 39 term-based post holders should consider themselves as honored citizens given the opportunity to serve the Tsawa-Sum in esteemed positions, and therefore policies encouraging financial incentives (custom duty and sales tax exemption for vehicle quota) risks condescending the post and must be prevented under any circumstances. 

6. Top civil/public servants (Cabinet Secretary, Government Secretaries, term-based appointment and equivalents) should volunteer and accept only a token increase of 2% on existing pay scale exhibiting austerity drawing lessons from no other than His Majesty The Great Fourth. 

7. Civil servants EX till P5 may avail a pay revision of 14% on existing pay scale while a lump sum of Nu. 5,000 awarded as His Majesty’s soelra to all other civil servants encompassing support staff (SS), Operational (O) and Elementary Support Personnel (ESP) levels. 

8. House and rental allowance be increased uniformly. 

Contributed by  Sonam Tobgay

Vice President 

Bhutan Kuen-Nyam Party 

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