A new study has revealed significant inconsistencies in pay, benefits and service conditions across public enterprises, exposing a system marked by discretion, weak oversight and opaque financial practices.
A task force formed by the Ministry of Finance said in its report that there is no uniform standard for salaries or facilities for staff. In most institutions, boards of directors decide benefits at their own discretion. The absence of a unified legal framework, limited monitoring, and pressure from employee unions have contributed to the uneven system, according to the report.
Among 48 institutions surveyed by the task force, only eight were found to have followed the pay scale set by the government on allowance distribution. Eleven were found to have relied on decisions of their general assemblies, while nine were found to have left the matter entirely to board discretion. Similarly, six have determined allowances according to their internal rules, while five have been following predetermined rates.
Nepal Rastra Bank (NRB) and Nepal Electricity Authority (NEA) are providing the highest allowance of Rs 9,000 per meeting. Two institutions provide Rs 8,000, one pays Rs 7,500, and four offer Rs 7,000 per meeting, according to the report.
The task force also highlighted sharp variations in monthly compensation for chief executives of the institutions it surveyed. Rastriya Banijya Bank tops the list with a monthly package of Rs 450,000, followed by Agriculture Development Bank and Nepal Bank both of which pay Rs 400,000, while the Nepal Tourism Board pays Rs 391,000.
There are also significant variations in the pay of officer-level employees in the surveyed institutions. Out of 60 institutions studied by the task force, 17 pay less than Rs 50,000 a month, 25 fall in the Rs 50,000–75,000 range, and seven pay above Rs 75,000.
The study documents a long list of non-transparent allowances given under headings such as risk, housing, telephone, station, regulation and incentive. Many institutions distribute these benefits without informing the Ministry of Finance. Provident fund arrangements of these institutions also differ, with only 21 institutions using a contribution-based system.
Some of these institutions offer one month’s salary or a 15–35 percent bonus during anniversaries. Similarly, 28 of the studied institutions have welfare and protection, with annual deposits of two to five months’ salary. Staff in some institutions can access loans for houses, land or vehicles at interest rates as low as 1–5 percent. A few institutions have even distributed company shares, despite lacking legal authority to do so.
The taskforce has recommended sweeping reforms to standardize these facilities. It has proposed making the Ministry of Finance approval mandatory for all financial obligations, including salaries, allowances and retirement benefits of these institutions. Similarly, it has recommended introducing a single service-condition regulation for all these institutions, backed by an umbrella law to enforce financial accountability.
The panel has suggested preventing loss-making or grant-dependent institutions from offering benefits higher than those in the civil service. It also suggested introducing performance-based incentives, cabinet-set salaries for chief executives, and minister-level approval for benefits for board members.
Likewise, it has suggested introducing separate, market-aligned structures for special professions such as doctors, nurses, pilots and insurance experts. It has recommended making these institutions adopt fully contribution-based social security, creating a mandatory retirement fund, abolishing opaque funds, removing non-monetary perks and eliminating provisions that allow boards or employees to set their own benefits.
