Govt prepares civil servant salary hike, Recommendation suggests raising pay from Rs 35,000 to Rs 121,000

KATHMANDU: The government is preparing to increase the salaries of civil servants after three consecutive fiscal years without a pay revision, with a high-level salary review committee reportedly recommending a significant increase in wages for government employees ranging from office assistants to the chief secretary.

According to high-level sources, the Salary and Allowance Review Committee has proposed raising the monthly salary of the lowest-ranking office assistant to Rs 35,000 and the salary of the chief secretary to Rs 121,000, marking a major revision in Nepal’s public sector pay structure.

The recommendation comes as the government finalizes preparations for the upcoming fiscal year budget, where decisions related to salary adjustments, tax rates, and public spending are typically made during the final stages.

No Salary Increase Since FY 2022/23

The last salary hike for Nepal’s civil servants and teachers was announced during the budget speech for fiscal year 2079/80 (2022/23) by then Finance Minister Janardan Sharma, who increased salaries by 15 percent.

However, no salary increment was implemented in the following three fiscal years — 2080/81, 2081/82, and 2082/83 — largely due to fiscal pressure and concerns over declining government revenue collection.

Under provisions of Nepal’s Civil Service Act, a Salary and Allowance Review Committee is mandated to reassess employee compensation every three years based on factors including revenue growth, the total number of sanctioned government positions, inflation, and cost-of-living allowances.

Although salary revision was expected last year under the legal framework, the government delayed implementation, citing insufficient revenue capacity.

Committee Recommends Salary Revision

This time, the review committee chaired by Chief Secretary Suman Raj Aryal, with Finance Ministry Secretary Dr. Ghanshyam Upadhyaya and Ministry of Land Management, Cooperatives and Poverty Alleviation Secretary Chandrakala Poudel as members, has reportedly recommended a salary increase.

According to officials familiar with the matter, the proposal suggests increasing the current salary of office assistants from Rs 27,612 to Rs 35,000, while the chief secretary’s salary could rise from Rs 77,211 to Rs 121,000.

If implemented as proposed, lower-level employees could see a salary rise of nearly 27 percent, while the salary of the chief secretary would increase by approximately 56.7 percent.

A source at the Ministry of Federal Affairs and General Administration said the review committee has already submitted its recommendation, though the final decision rests with the government after assessing the country’s economic and fiscal situation.

“The committee has recommended a salary increase. However, the final amount and implementation will depend on the government’s fiscal capacity,” the source said.

Finance Ministry Yet to Hold Detailed Discussion

Officials at the Finance Ministry said that although information about the recommendation has reached the ministry, detailed discussions regarding salary and allowances have not yet taken place as part of budget formulation.

“Salary revision has been recommended, but discussions are yet to begin formally. A decision is expected in the coming days,” a ministry official said.

The potential revision comes at a time when Nepal is facing pressure to balance fiscal consolidation with demands for higher public-sector wages amid rising inflation and living costs.

Civil Servants Demand Higher Basic Salary

Meanwhile, civil servant unions have demanded that the basic salary floor be fixed at Rs 38,862, arguing that the current wage structure is inadequate considering inflation, living expenses, and minimum nutritional requirements.

According to union leaders, employees are also seeking expanded benefits beyond salary increases, including social security, healthcare, pension and gratuity improvements, housing support, professional security, capacity development, trade union rights, and digital governance reforms.

Recommendation Based on Earlier Commission Report

The latest recommendation appears to be largely based on the report submitted three years ago by a high-level salary commission formed by the government in 2079 BS to review remuneration for state employees and workers based on economic capacity and inflation trends.

The commission, led by former Chief Secretary Lilamani Poudel, with former secretary Bimal Wagle and chartered accountant Shivadev Pandey as members, had recommended setting the minimum salary at Rs 35,000 and the chief secretary’s salary at Rs 122,500.

The commission had also proposed maintaining a 1:3.5 salary ratio between the lowest-ranking and highest-ranking government employees, which partly explains the larger percentage increase proposed for senior officials.

Former commission members say that while salary revision is a positive step, adjustments reflecting recent inflation would have made the proposal more practical.

Policy experts have also emphasized that the government should focus not only on wages but also on strengthening employee welfare through housing, healthcare, education support for children, and social protection mechanisms, while simultaneously cutting unnecessary state expenditure to avoid placing additional pressure on public finances.