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Kathmandu Tuesday November 21, 2000 Mangshir 06, 2057.
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Final report on salary review in offing
By Prem Khanal
KATHMANDU, Nov 20 - The Public Enterprises Improvement Recommendation
Committee, formed by the government with the basic task of reviewing salaries and other
benefits of employees from Public Enterprises (PEs), is preparing to submit its final
report.
The five-member Committee, instituted about three months ago under the
coordination of Dr Shankar Sharma, Member of National Planning Commission, attempts to
make suitable recommendations for easing the atmosphere at PEs where employees are
demanding a salary hike on a par with their civil servant counterparts, without a change
in their existing salary structure.
Finance Minister Mahesh Acharya, presenting the budget for the current fiscal
year, announced a dramatic hike in the salaries of civil servants ranging from 50 to 90
percent. However, the budget was silent on the salary structure of PEs, which sparked off
dissatisfaction among the employees of the PEs resulting in unrest.
Talking to The Kathmandu Post, one of the members of the committee,
preferring not be named, explained that the present financial conditions of PEs do not
allow to fulfill their entire demands. "If all the demands put forward by employees
of PEs are met, PEs will have to bear an annual financial burden of more than Rs 480
million," he said.
He further said that an employee of a PE presently draws over 175 percent of
his basic salary, inclusive of perks, benefits and allowances. Allowance distribution in
PEs, even those which have been running at a loss for years, is around 80 percent over the
actual salary. Presently, there are 52 varieties of allowances being distributed to the
employees of PEs under various names.
Another member of the committee, Amrit Mani Pokhrel, said, ‘The
committee is recommending that PEs should extend financial privileges, including
allowances, as per their financial capabilities. And on the subject of a salary hike, we
are recommending that it should be increased on a par with that of civil servants."
The committee, in cooperation with three hired experts, has categorized the
entire 45 PEs into three groups. As per the categorization, PEs, which have been running
at a profit for the last three years have been put into group A. Similarly, PEs with
break- even financial positions lie in group B, while loss-making PEs have been put into
group C.
The final report of the committee is recommending raising the salaries of
employees in all PEs on a par with those of civil servants but also suggesting that some
conditions be put on the hike as regards other financial privileges. As per the
conditions, privileges for employees in PEs group A, can be increased to a maximum of 50
percent of total salaries for officers’ level and 75 percent for the
non-officers’ level. Similarly, for employees in PEs under group B, financial
privileges would be extended only after incurring profits. In the case of employees from
group C, PE employees would receive such privileges only after PEs make profits
continuously for three years. Total government equity, along with investment of loan
capital on PEs, has crossed Rs 63 billion.
And the most disturbing fact is that return on net capital investment was
registered at a mere 0.06 percent in 1997 and 3.5 percent in 1999, while in the current
fiscal year it is expected to be around only 3 percent.
Long-standing differences among the politically-polarized employees, sluggish
and prickly management and overstaffing are some of the chief causes for the continuing
deteriorating financial conditions of PEs.
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