Legal Hurdle Delays Bi-Monthly Salary Rollout for Civil Servants

The government’s decision to pay civil servants twice a month has run into legal complications, requiring amendments to existing laws before implementation.

On April 17, Finance Minister Swarnim Wagle announced a ministerial decision to pay government employees on a fortnightly basis. However, current legal provisions prevent the immediate enforcement of the decision.

Section 28 of the prevailing Civil Service Act stipulates that employees are entitled to salary and allowances only on a monthly basis after the completion of each month. To implement the new directive, the government must either amend the Act or introduce an ordinance to change the law.

According to a high-ranking official at the Ministry of Finance, discussions are underway to remove the legal roadblock, either through the upcoming budget or via an ordinance before that.

"There are some obstacles to implementing the decision," the official said. "We are discussing how and when to resolve them."

The official added that the initial decision is being applied to civil servants first. Although the fortnightly payment system will begin with civil service employees, the government plans to gradually extend it to teachers, the Nepali Army, and the Nepal Police.

The official explained that the move is aimed at energizing a sluggish economy. "Paying employees from the state coffers every 15 days is expected to boost liquidity in the market and stimulate economic activity," he said.

Meanwhile, Financial Comptroller General Shobha Kant Paudel said his office is ready to execute the decision. "There is no shortage of resources at present. The Office of the Financial Comptroller is prepared to implement the decision," Paudel said.

"There are no technical problems in paying salaries every 15 days. There is no issue in disbursing salaries and allowances to employees," he added. According to Paudel, more frequent salary payments would increase employees' spending capacity, helping to activate the economy.

"With employees able to spend even during two-day public holidays, this will boost market demand," he noted. The cabinet had already decided on April 5 to grant two weekly public holidays on Saturdays and Sundays, which is currently being implemented.

Economist Chandra Mani Adhikari said the government's decision could help stimulate the market. "At a time when the market is sluggish, the state has decided to pay employees twice a month," he said. "Now the government must remove legal hurdles to enforce the decision."

Adhikari noted that adopting this practice, which has been successful abroad, would be beneficial for Nepal. He added that implementing it successfully in the government sector could pave the way for similar practices in the private sector.

While all South Asian countries currently pay government employees on a monthly basis, the United States and Canada have semi-monthly salary systems in place.