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With the government gearing up to increase the minimum wage of workers effective from the start of the new fiscal year 2023/24, negotiations are ongoing between government officials and representatives of the private sector, and labor unions. As per the country’s labor law, the minimum wage of workers should be reviewed every two years. Since the government increased the minimum wage in mid-July 2021, it is planning to fix the new wage by mid-July 2023. The monthly minimum wage of workers is currently Rs 15,000 which was increased from Rs 13,450 in mid-July 2021. The government set the daily wage at Rs 577 and the hourly wage at Rs 77. Of the Rs 15,000 monthly wage, Rs 9,385 is monthly salary and Rs 5,615 is dearness allowance. In addition, organizations have to provide additional facilities including gratuity and contributions to the Social Security Fund. While tripartite talks are going on, it is yet to be known how much the minimum wage will be increased this time around. While the government is preparing to revise the salary on the basis of inflation and the consumer price index, the private sector is hesitant to increase the minimum wage at this time citing the economic slowdown for the inability of businesses to raise the salaries of their employees. The Ministry of Labor, Employment, and Social Security (MoLESS) has formed a recommendation committee for wage determination under the leadership of Joint Secretary Danduraj Ghimire. The committee also has representatives of concerned stakeholders that include the Department of Labor, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), and labor unions. The committee has been mandated to recommend the new minimum wage to MoLESS. While the labor law does not specifically state how much the wage should be increased, the minimum wage is fixed taking account of inflation, price index, and the last salary increment. According to a member of the committee, they are now in the final stage of drafting the report to be presented to the Labor Ministry. Nepal Rastra Bank, FNCCI and CNI, and General Federation of Nepalese Trade Unions (GEFONT) have submitted separate reports for determining the new wage. The private sector bodies have submitted reports demanding that wages should not be increased as the business sector is facing problems due to the economic downturn. On the other hand, GEFONT has submitted a report with the demand to increase the salary. All these reports will be discussed in the committee’s meeting on June 21. According to private sector representatives, the capacity utilization of industrial enterprises has declined due to the slump in market demand, making it difficult for businesses to increase the minimum wage this time. “Because of the economic slowdown, there is a situation where we have to cut down the jobs. This is the time the government and the private sector need to work together to save employment,” said Rajesh Kumar Agrawal, Senior vice president of CNI. “If the wages are increased at this time, businesses will be affected and it will be difficult to save the employment. Businesses are not in the position to bear the additional financial burden.” According to Agrawal, the minimum wage can be increased once the economy comes out of the slump. “We are positive about increasing wages. And, it is also necessary. But we are not ready for it now because of the economic situation of the country,” he said. While employers have their reservations over the wage increment, trade unions are of the view that their minimum wage should be increased to Rs 26,000. According to them, wages should be determined scientifically. Trade unions have asked the government to set the minimum monthly wage of workers at Rs 26,000. The minimum wage should be on par with the salary of civil servants, they say. “Currently, the salary of the lowest-level government staff i.e., office assistant is Rs 26,348 rupees. We have demanded to raise the minimum wage of workers to this level,” said Janak Chaudhary, Vice President of GEFONT. “If not, the government should make a separate arrangement for the protection of workers. Additional facilities such as providing subsidies, arranging ration cards, and making mandatory contributions to the Social Security Fund should be guaranteed.”

The price of gold has dropped by Rs 200 per tola in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 111, 800 per tola today. The gold was traded at Rs 112, 000 per tola on Monday. Meanwhile, tejabi gold is being traded at Rs 111, 250 per tola. It was traded at Rs 111, 450. Similarly, the price of silver has dropped by Rs 10 and is being traded at Rs 1,430 per tola today.

Finance Minister Prakash Saran Mahat today said the budget under the capital expenditure was reduced due to increasing liability for social security. "The size of budget under the capital expenditure has been small as the liability for principal and interests of loan has increased along with that for social security," said the minister while inaugurating the 66th annual general meeting of the Morang Trade Association here.  The budget under the capital expenditure for the next fiscal year, 2023/24 has accounted for 17.25 percent. The minister has also stressed the need to increase capital expenditures to make economic dynamics while for the government to improve the monetary and fiscal policies. The budget for the next fiscal year is pro-people as it has been prepared independently, he claimed. Saying that the government would focus on constructing the Ring Road in Biratnagar, he pledged its support to promote industry and trade in the city. Similarly, former minister Minendra Rijal said Biratnagar city was lagging behind without the viability of trade and industry. He also stressed the need for upgrading Biratnagar airport as of an international standard. Also speaking on the occasion, Biratnagar Metropolitan City Mayor Nagesh Koirala demanded that the government release the budget for the local level soon.  

The Nepal Rastra Bank (NRB) is learnt to have been preparing to issue a digital currency. Central bank's Executive Director Guru Prasad Paudel said that so far 11 countries in the world have their digital currency and the bank too is studying the requirements and making preparations for issuing its own digital currency. He was speaking at a program organized to sign and exchange a Memorandum of Understanding about finance and digital literacy between the Machhapuchhre Bank and the Private and Boarding School Organisation of Nepal (PABSON) here today. The latest data about digital transactions shows a significant volume of it. On average, Nepal sees monthly digital transactions of Rs 40 billion. In the month of Baisakh (mid-April-mid May, 2023), 8.6 million people made transactions worth over Rs 26 billion through QR codes. The use of digital transactions is increasing, suggesting the need for issuing a digital currency, it is said. The NRB observes the current fiscal year as the Digital Payment Promotion Year.