Govt scraps most of perks, incentives of civil servants

May 11, 2018

The Kathmandu Post, 11 May 2018

In a move aimed at controlling public expenses, the government has decided to scrap all the perks and incentives of civil servants except dearness and local allowances meant for those serving in remote areas.


The Cabinet meeting on Wednesday endorsed ‘the Guideline on Bringing Austerity and Effectiveness in Public Expenditure’ which has the provision of scrapping most of the incentives that civil servants are currently enjoying, from the next fiscal year.

The government move comes after most of the ministries, departments, commissions and courts of law started demanding additional perks and incentives in the form of ‘motivational incentive’ for their civil servants  on top of the salaries.


Currently, civil servants working at the President’s Office, Vice President’s Office, the Office of Prime Minister and Council of Ministers, Finance Ministry, Foreign Ministry, Election Commission, Parliament Secretariat, the Commission for Investigation of Abuse of Authority (CIAA), the National Vigilance Centre (NVC) have been enjoying allowances equivalent to 100 percent of their salaries on a blanket basis.


Binod Bahadur Kunwar, spokesperson for the Prime Minister’s Office said there would be a review on whether the motivational incentive system has yielded the desired result and that it would be scrapped unless there is a justifiable reason to provide such incentives.


He said that the Cabinet decision would be implemented in all organs of the state—executive, legislature and judiciary.


“If any allowance has been given by the law, such law will be amended,” Kunwar added.  The government allocated Rs4.79 billion for dearness and local allowances in the current fiscal year, according to the Finance Ministry.


The government officials said incentives are being given according to the workload and nature of work.  But there are concerns over whether the incentive system has improved staff’s performance.


There are also discrepancies in such allowances, with some of the government entities giving up to 121 percent allowances to their staff. Employees at the CIAA, Election Commission and Parliament Secretariat are getting relatively higher incentives compared to staff at other government entities.


The trend of giving additional perks was started during the tenure then Finance Minister Baburam Bhattarai. He introduced 200 percent incentives to the employees of the Customs Department and the Internal Revenue Department.


The move was aimed at increasing the government’s revenue collection and controlling revenue leakage. It was later scaled back to 50 percent in the wake of strong opposition from other government offices.


Initially introduced with an objective to enhance the output of the government employees, such incentives of late have become means to earn extra income as other government entities too joined this bandwagon.


Currently over 10,000 staff of 26 government bodies/entities are enjoying additional perks for which the government has allocated around Rs2 billion for this fiscal year.


As more offices were included to the list of the  incentive recipients, the criterion for getting incentives have been tweaked by government offices as per their interest.


Earlier, incentive used to be awarded based on the fixed indicators.


Now, the government offices are found making arbitrary criteria, such as early entry to office, extra hours in office,  according to Finance Ministry officials.


Besides scrapping the allowance, the Cabinet meeting on Wednesday also decided to bring uniformity in vehicles to be used by ministers, secretaries and joint secretaries among other government officials.


“The Home Ministry will prepare a standard procedure regarding this matter,” said Kunwar.


Likewise, a procedure will be prepared regarding layout of the office rooms to be used by senior government officials to maintain uniformity in facilities and decoration of offices, according to Kunwar.



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