Inflation Undermines Raise for Nepal’s Government Workers


Article Highlights

Kalpana Khanal, GPJ Nepal  

Although government jobs are prestigious and secure, employees struggle to support their families with their low salaries.

KATHMANDU, NEPAL – Gyanendra Prasad Aryal, 42, has been working for the government since he was 23. But his low salary has made it a difficult two decades.

Aryal works at the Department of Food Technology and Quality Control in Kathmandu, the country’s capital, as a non-gazetted officer, a staff position below officer.

“My life is more or less the same before I got the job,” Aryal says. “There is no change.”

Born in another district in the region, Aryal moved to the capital to live with his aunt when he was 9 because there was no school in his village for higher studies, he says. He obtained his Bachelor of Arts from Tribhuvan University in Kathmandu and joined the government service after passing the exam given by the Public Service Commission, the government’s recruiting agency.

After starting as a non-gazetted second-class officer in 1990, Aryal earned a promotion to non-gazetted officer in 2007. When he started working for the government, his salary was around 1,240 rupees ($12.40) per month. The government increased the salaries of government workers for the 2013-2014 fiscal year, and his salary is now 17,090 rupees ($170.90) per month.

But Aryal says it is still not enough to support his family.

There are mandatory deductions each month from Aryal’s salary that go toward his retirement savings: 10 percent for the Employees Provident Fund, 10 percent for the Citizen Investment Trust, and 1 percent for the Social Security Fund, he says. As a result, he receives only around 13,500 rupees ($135) each month.

But the family needs 7,000 rupees ($70) to rent their two-room flat and more than 5,000 rupees ($50) for food each month, Aryal says. School fees amount to 1,290 rupees ($12.90) for his 10th-grade daughter and 1,190 rupees ($11.90) for his eighth-grade son. Their flat is far from the school, so they spend around 2,000 rupees ($20) per month on transportation.

“Therefore, to manage everything with my salary is very difficult,” Aryal says.

Health problems and a lack of education make it difficult for his wife to contribute financially. At times when his monthly salary cannot cover the family’s needs, he has to take loans from his retirement savings.

His wife, Kusum Aryal, 37, says that it is difficult to raise a family with her husband’s income. They eat meat just once a month and buy new clothes only during festivals. Even then, they buy from mobile, roadside shops because they sell cheap items.

“It has been 15 years since I got married,” she says. “Until now, my husband and I have never gone outside for any kind of entertainment. I went to a restaurant once because [of] my children’s stubbornness. Entertainment is a distant dream while living [on a] government salary.”

Although the government increased the salaries of all government employees this fiscal year, workers say their earnings are still not sufficient to support themselves and their families. Their inferior pay also hurts the public by lowering the quality of services, as skilled professionals seek jobs in the private sector or abroad and government employees weaken the integrity of their work. Recognizing these difficulties, the government is reviewing employee benefits, but workers are not optimistic.

There are more than 80,000 government employees in Nepal, and nearly 20,000 of them work in Kathmandu, says Bholanath Pokharel, the former chairman of the Nepal Government Employees' Organisation, citing data from the Department of Civil Personnel Records of the Ministry of General Administration. The organization is a union for government employees that works to safeguard their rights and interests.

The public sector workers have been lobbying the government for lodging allowances for staff who relocate to Kathmandu for work, a lunch allowance for all employees and an education allowance for their children, Pokharel says. They have been demanding these benefits since before democracy came to Nepal in 1990 but still have not achieved them.  

The government brought together top unelected government officials, economists and representatives of the Public Service Commission to form a high-level pay commission to study this issue and recommend changes. The chief secretary, the highest-ranking unelected official in Nepalese government, chaired the commission.

The commission found and published in a 2004 report that it was impossible to meet the daily basic requirements of a family with a government salary, says Pokharel, who was a member of the commission. The commission recommended an increase of 9,574 rupees ($95) per month for government employees to be able to afford food, clothes, housing, electricity, water and medical care.

The government has attempted to address this issue, but employees say its changes are insufficient.

The Ministry of Finance increased the salary of government officials by 18 percent in the 2013-2014 fiscal year to improve their living standards, says Ram Sharan Pudasaini, the joint secretary and spokesman for the Monitoring and Evaluation Division of the Ministry of Finance.

“The government has increased the salary of its officials because it understands their problem,” Pudasaini says.

The monthly salaries now range from 40,800 rupees ($408) for the highest level of Nepalese bureaucracy, the chief secretary, to 12,800 rupees ($128) for the lowest post, he says. The government also introduced a motivation allowance of 1,000 rupees ($10) per month for all workers and health insurance for them and their families.

But the raise is only about half the 35-percent increase that government workers had demanded, says Pokharel, now a training officer in the Ministry of Cooperatives and Poverty Alleviation. He emphasizes that it gives no relief to government employees because the inflation rates in the country have also increased.

The Nepal Rastra Bank, the country’s central bank, estimates that the annual average inflation, based on the consumer price index, rose to 9.9 percent in the 2012-2013 fiscal year from 8.3 percent in the previous year.

Pokharel compares the salaries of government workers in Nepal to those in other South Asian countries.

“Among the government officials in Asia, the Nepalese government personnel get the lowest salary,” Pokharel says. “To live a simple life, the salary of the office helper should be 20,000 rupees ($200). The salary of the higher post should be decided on the same basis.”

If the government does not increase its workers’ salaries to keep up with the social and lifestyle changes taking place in Nepal as a result of globalization and modernization, the employees will not be able to support themselves, he says.

“The government has not provided its staff enough salary to live their lives,” Pokharel says.

Krishna Hari Pandey, a 47-year-old office assistant for the General Post Office, agrees.

He started working for the government in 1996 in a post below officer and passed the Public Service Commission exams in 2010 to become a non-gazetted second-class officer, he says. His current salary is 16,100 rupees ($161) per month, and he receives 12,719 rupees ($127) after the retirement deductions.

But living in the capital requires money for everything: a room, water, electricity, garbage disposal, education and health care, he says. He, his wife and their three children rent two rooms in Kathmandu. These costs consume his salary.

The family brings rice and cereals from Pandey’s home village in Chitwan district to Kathmandu to save money. He gets them for free or buys them cheaply from relatives who grow them on the family property. He also has been selling small plots of this land to supplement his income, and he takes occasional loans from his retirement savings. Still, the family cannot cover its basic monthly expenses in the city.

His wife, Binu Devi Pandey, even lived in Chitwan for 20 years to raise livestock to earn some money for the family expenses, she says. But living apart was stressful, so they sold all the livestock two years ago, and she returned to Kathmandu. Since returning, she has not been able to find employment because of her low literacy skills.

The low salaries not only affect the government workers and their families, but also the public. Although government jobs are popular because of social prestige and job security, the low pay deters skilled professionals and hurts motivation of current employees.

Nepalese society regards government jobs as secure rather than high-paying, says Ghaggu Prasad Paudel, 28, who works as the senior assistant at People’s Finance Limited, a private company. Whereas employers in the private sector can fire employees if they are not happy with their performances, it is more difficult to fire government employees. They also receive pensions.

Still, it surprises him that the government expects its workers to live on their salaries knowing how even he struggles despite a higher salary in the private sector.

“Although my salary is 40,000 rupees ($400) per month, I find it difficult to run my household,” he says. “The salary from the government is surely not enough.”

Government employment is secure and prestigious, Krishna Hari Pandey says. But he does not think that it provides for a comfortable retirement because of the low income.

The pay of skilled professionals is less in the government sector than in the private sector, so a government job is not attractive, Gyanendra Prasad Aryal says. Better opportunities and facilities abroad, especially in Europe and North America, have also led to the migration of skilled professionals.

In addition to deterring skilled professionals, the low pay hurts the integrity and quality of government employees’ work, staff say.

The difficulties of living on a government salary is one of the major reasons for corruption in the sector, Gyanendra Prasad Aryal says.

But Leela Mani Paudyal, chief secretary of the government of Nepal, disagrees.

“People should manage the money they have and be happy with it,” Paudyal says in a phone interview. “If officials have good intentions, then they will not take a bribe even if their pay is low. This is borne out by the fact that up to the present, all the officials who are caught for corruption are found to be earning well.”


Krishna Hari Baskota, the secretary at the Office of the Prime Minister and Council of Ministers and one of the country’s highest-ranking government officers, says low salaries are not an excuse for corruption.


“Pay is minimum compared to inflation, but we should not do bad things for that reason,” he says in a phone interview.


Instead, he earns additional money by writing articles and books.


But taking on other work can lead to poor public service, some warn.

Many government workers teach in colleges, work in audit firms, operate their own businesses and work in other jobs during their office hours, Gyanendra Prasad Aryal says.

“In such situation[s], the general people complain that they do not get effective services from government offices,” he says. “When the officials have the problem of making their ends meet, how can they give good service?”

Pokharel also worries that the low pay may hurt worker motivation.


The government is aware of the difficulties employees face because of high inflation rates, Pudasaini says. So it created a working group in 2013 to study the adequacy of current benefits, such as local allowances for workers who must relocate to Kathmandu, life insurance, increases in grade, uniform stipends, telephone services, and allowances for work trips and trainings.

The government is planning to provide free accommodations for officials who have been transferred to work in Kathmandu, Pudasaini says. It is also building schools for the children of all government workers, where tuition will be free. It is unrolling these programs district by district.

“Providing schools in all the districts at the same time is difficult,” he says. “Therefore, the goal of the government is to gradually extend this program to all districts.”

But these new facilities will not be able to provide for the needs of all government employees or their families, Pokharel says. It will also take a long time for the facilities to reach all the districts.

Gyanendra Prasad Aryal agrees that these services are not enough for his family.

“I am very depressed with my condition,” he says.

His wife, Kusum Aryal, fears for her family’s economic future.

“Life goes on,” she says. “But I fear, what would we do if we get some dangerous disease, or how are we going to send our children to college?”

GPJ translated this article from Nepali.