Salary hike

The government is set to increase the salaries of its employees in the form of dearness allowance by something like 20 per cent reportedly from today when the supplementary budget for the second half of the current fiscal year takes effect through an ordinance. It has also made new allocations for security expenses. This means a signifcant rise in new monetary obligations, put at around Rs.3.5 billion, most of which belongs to the revenue expenditure category. The additional funds will be absorbed by the salary hikes of some 400,000 employees and security expenses, including the recruitment of 13,000 soldiers. The pensioners will not have reason to cheer as the basic salary will remain unchanged.

To finance the new outlay, the VAT rate is to be increased from the existing 10 per cent by up to three per cent and the government will resort to more internal borrowings. The new provisions, along with the recent hikes in petroleum products, are bound to raise the general price level considerably. This will make the already hard life of the vast majority of the people even harder, as their purchasing power has not risen, to say the least. The salary increases by flat percentages will put the lower-level employees at a disadvantage. No doubt, there should be a certain gap between the salaries of the various tiers of employees. But what should not be ignored is the fact that, apart from their salaries, the high-ranking officers enjoy perks and other benefits of their high position which the lower-ranking employees do not. Those who have got a government job in an economy like Nepal’s, characterised as it is by high unemployement and the worst effects of a widespread insurgency should be considered fortunate. At the same time, the people would like to see an improvement in the delivery of services by the government employees. Otherwise, the hikes financed by taxing the poor Nepalis will remain unjustified.

Deuba recently said that if the Maoists did not come forward for talks, almost all the government revenue would have to be spent on the security. The government’s deadline for the rebels ended yesterday, with the latter spurning its appeals for talks. How long can the country go on like this, with the economy continuing its downward slide? The country has an increasing dependence on foreign aid, already heavy, to keep it afloat, besides the alarming rise in foreign inputs in defence. All this might have serious implications for Nepal’s sovereignty in practical terms. Therefore, it would become increasingly difficult to justify ballooning expenses which could be spent on development if peace was secured. So questions such as mediation had better not be allowed to constitute an obstacle to peace.