Sources close to the development told Republica that though employee unions and top bureaucrats have pushed for hefty review, MOF officials have maintained that such a rise will not match with the planned mobilization of resources.[break]
The ministry plunged into a dilemma after a committee headed by Chief Secretary -- the official body to recommend on pay scale -- recommended raising salary of civil servants in a range of 20 to 25 percent.
Previously, employees associations and political leaders were pressing it to fix the minimum salary of civil servants at Rs 15,000 and adjust pay of higher officials in similar proportion.
MoF officials said they cannot say yes to even the recommendation of Chief Secretary, leave aside employees associations´ proposals.
Currently, the government spends Rs 70 billion in salary of civil servants, army, police, teachers and public health workers.
If it is to accept the Chief Secretary´s recommendation, it will instantly inflict the government an additional financial burden of around Rs 15 billion.
“If the political leaders give their nod, we can go for it. But if we are to consider the existing sources of fund, we simply cannot sustain it,” said an official of the Budget Division in MoF.
The ministry is under severe pressure to adjust salaries mainly because it has been deferring the adjustments for the last two years. During this period, the country witnessed back-to-back double digit inflation, resulting in a sharp rise in the cost of living.
“Despite that, we can go for an additional Rs 10 billion budget to finance the proposed salary hike, which works out to be a hike of around 14 percent. But we are still waiting for a policy decision,” said another source who is also a core member of the budget formulation team.
During the exercises done so far, technical experts have pushed to adjusting existing dearness allowance of Rs 1,200 into the salary and raising the resulting amount by around 10 percent.
This change will effectively raise salary by around 14 percent, said the source. “The net financial burden it will bring will remain just over Rs 9 billion. It seems to be the most feasible option,” said the source.
No confusion on infrastructure budget
The new budget will give high priority to infrastructure projects and allocate substantial budget to national-priority projects.
Sources said MoF is allocating around Rs 1.60 billion for acquisition of land and development of Kathmandu-Tarai Fast Track highway. Likewise, the new budget will earmark Rs 1.75 billion for Mid-Hills Highway.
“We are allocating around Rs 550 million for the development of 10 planned cities along the Mid-Hills Highway,” said the source.
The government is also providing over Rs 3 billion for subsidizing chemical fertilizer.
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