Bhutan’s Civil Servants Set for Major Salary Boost as Sixth Pay Commission Report Revealed

“…𝑮𝒐𝒗𝒆𝒓𝒏𝒎𝒆𝒏𝒕𝒔 𝒎𝒖𝒔𝒕 𝒓𝒆𝒈𝒖𝒍𝒂𝒕𝒆 𝒂𝒈𝒂𝒊𝒏𝒔𝒕 𝒑𝒓𝒊𝒄𝒆 𝒉𝒊𝒌𝒆𝒔 𝒇𝒐𝒓 𝒆𝒔𝒔𝒆𝒏𝒕𝒊𝒂𝒍 𝒈𝒐𝒐𝒅𝒔 𝒂𝒏𝒅 𝒔𝒆𝒓𝒗𝒊𝒄𝒆𝒔, 𝒎𝒐𝒏𝒊𝒕𝒐𝒓𝒊𝒏𝒈 𝒎𝒂𝒓𝒌𝒆𝒕𝒔 𝒕𝒐 𝒑𝒓𝒆𝒗𝒆𝒏𝒕 𝒑𝒓𝒊𝒄𝒆 𝒈𝒐𝒖𝒈𝒊𝒏𝒈 𝒂𝒏𝒅 𝒖𝒏𝒇𝒂𝒊𝒓 𝒑𝒓𝒂𝒄𝒕𝒊𝒄𝒆𝒔 𝒕𝒉𝒂𝒕 𝒎𝒂𝒚 𝒐𝒄𝒄𝒖𝒓 𝒘𝒉𝒆𝒏 𝒔𝒂𝒍𝒂𝒓𝒊𝒆𝒔 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆”.

Phurpa Wangmo & Sonam Deki

Finance Minister Namgay Tshering has delivered the long-awaited Sixth Pay Commission report to the National Assembly, putting forth a comprehensive set of recommendations for pay revisions in the civil service sector. Notably, the report proposes a substantial 50 percent increase in the minimum pay scale for all civil servants, signaling a significant step towards ensuring equitable compensation.

The primary goals of this pay revision initiative are twofold: to guarantee that public servants are fairly remunerated, enabling them to maintain a reasonable standard of living, and to foster motivation and talent retention within the public service. By addressing these objectives, the report seeks to create a more robust and efficient civil service workforce.

Addressing the assembly, Finance Minister announced the specific pay hikes for various categories of civil servants. According to the proposed recommendations, employees in the Ex/Es 1 to Ex/Es 3 categories will receive a 55 percent pay hike. Similarly, those in the P 1 to P5 grades can expect pay increases ranging from 58 percent to 62 percent.
For employees in the S1 to S5 grades, the recommended pay hikes range from 63 percent to 70 percent. Meanwhile, those in the O1 to O4 grades may see pay increases ranging from 70 percent to 74 percent. For NFE instructors, they can expect 73 percent pay increment and 70 percent for ECCD facilitators. The Thrompon will receive a 55 percent pay hike, while Gups and Mangmis are set to receive 58 percent and 59 percent pay hikes, respectively. Moreover ESP level will get their increment with 76 percent and GSP level with 74 percent.

To help retain healthcare professionals, the MBBS Doctors, Specialist and Subspecialist have been provided additional increment on the existing professional allowance subsumed under the variable pay. The recommended revision for General is 55 percent, Specialist with 70 percent and Subspecialist with 80 percent.

Finance Minister said, “The assessment on the cost of living in the country is based on the Bhutan Living Standards Survey 2022, which provided a proxy on the basic requirements to maintain a reasonable standard of living in the country. The sample size of 13,416 households represented a total of 164,331 households and 650,118 persons. The mean monthly per capita household consumption expenditure in the urban area was Nu.19,374, while the per capita household consumption of the 1st quintile (Nu.5,810) was six times lower than those in the 5th quintile (Nu.35,230)”.

A city bus driver expressed his delight, stating, “The pay increment has come as a pleasant surprise, and we are genuinely excited about it. This unexpected boost in income holds the promise of improving our lives. Personally, I believe that this pay increment will serve as a significant source of motivation, driving me to work even harder and contribute more diligently.”

Sangay Wangmo, a 32 year old caretaker at one of the schools in Thimphu, reflected on her situation, saying, “Living in Thimphu with a low salary has always presented significant challenges, as budget constraints often loom over us. However, with the prospect of an impending pay increase, a glimmer of hope emerges for a life that is more comfortable and fulfilling. I truly hope that this positive change will usher in better circumstances for all of us.”

Kuenzang Choden, a 46-year-old sweeper working in one of the schools, expressed gratitude towards the government for providing preferences, particularly in the ESP and GSP levels. She acknowledges the challenges of sustaining oneself in an urban area with a relatively low salary, especially when responsible for supporting a family on a single income.

By receiving preferences in the ESP and GSP levels, Kuenzang Choden likely refers to some form of benefits or support provided by the government to employees in lower-income positions including subsidies for essential goods and additional financial assistance. “Such support can significantly alleviate the financial burdens faced by individuals like me who work in lower-paid occupations.”

Yeshi Choden 29, who works as a teacher in one of the Schools said, “Governments should also implement regulations to prevent excessive price increases for essential goods and services and also monitor and intervene in markets to prevent price gouging or unfair practices as when the salary increases, the prices of goods may hike any time”.

The Commission’s mandate involved reviewing and recommending revisions to the pay, allowances, and benefits of public servants, aiming to tackle the prevailing challenges within the public service. The proposal builds upon the revised framework established by the Pay Structure Reform Act of Bhutan 2022.

Initiating its work on February 24, 2023, the Commission emphasized the importance of stakeholder consultations to gain insights into the practical realities and expectations regarding the pay revision. Key concerns raised during these consultations focused on the necessity to ensure fair remuneration, allowing public servants to maintain a reasonable standard of living amid rising costs, and the importance of saving for their future.

While expectations were high for a significant revision, the Commission recognized the delicate balance between meeting the immediate needs of public servants and ensuring the long-term sustainability of any proposed upward pay adjustments. Adhering to the Constitutional requirement of financing recurrent expenses from domestic resources, the government’s fiscal space limited the possibility of substantial revisions in the coming years. However, a one-off contribution from the DHI will help bridge the funding gap and facilitate the implementation of the proposed pay revision.

The pay compression ratio serves as a measure of the disparity between entry-level and senior-level positions within an organization. A narrower ratio implies a smaller pay difference, which can lead to turnover among skilled professionals lacking incentives for better performance. To build a meritocratic society, it is crucial to maintain a wider compression ratio. The proposed revision sets the (gross) pay compression ratio at 6.7, representing an improvement from 6.2 in 2022.