It is estimated that around 8.5 billion rupees will flow into the market every 15 days when salaries are distributed. Economists say that this will provide relief to low-income earners and families dependent on salaries and will help increase overall demand in the market.
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When the government distributes salaries to employees every 15 days, it is seen that about 8.5 billion rupees will flow into the market every 15 days. Finance Minister Swarnim Wagle has directed to make arrangements to pay salaries to civil servants on a semi-monthly basis. The Ministry of Finance has written a letter to the Office of the Comptroller and Auditor General on 4 Baisakh 2083 to implement the directive. After the decision is implemented, it is seen that about 8.65 billion rupees will flow into the market every month.
For the current fiscal year, the government has allocated 98 billion for teachers, federal civil servants, services, police and other civil servants across the country and 225 billion rupees for the federal government, civil servants, army police and civil servants. Of this, 98 billion has been allocated for teachers and 127 billion for federal civil servants, services, police and other civil servants.
From the allocated amount, civil servants, police, army and others get 13 months' salary, with an additional month in Dashain. When the allocated amount is divided into 13 months, about 17.3 billion rupees are currently spent on the salaries of teachers, federal civil servants, army, police and other public servants per month.
According to the government's preparations, after the work of paying salaries to employees every 15 days starts, about 8.65 billion rupees will flow into the market every time. 'While the work of distributing salary and allowance facilities to public servants has been done monthly after the end of the month, now in the context of starting the practice of paying it semi-monthly, there is a request to make the necessary arrangements for distributing it semi-monthly, as per the decision of 4 Baisakh 2083 (Finance Minister level),' the Ministry of Finance said in a letter written to the Office of the Comptroller General.
Nepal's economy has been sluggish for the last few years. Industries are operating at less than half their capacity utilization. For the last three years, banks and financial institutions have accumulated loanable funds. Interest rates have fallen to a historic low. Overall demand in the market has not been able to increase. The morale of the private sector is at a historic low. Economists have been suggesting that money should be put into the hands of citizens to improve the economy in such a situation and that it will increase market demand, thus stimulating economic activity.
Most developed countries have been paying salaries to employees every two weeks. Economists say that Nepal should also implement this good practice of developed countries and that it will provide relief to low-income and salary-dependent families.
Once the government's preparation to pay salary every 15 days is implemented, it will provide relief to low-income and salary-dependent families and help increase overall demand in the market, said economist Nar Bahadur Thapa. "Once the government starts paying salaries to employees every 15 days, the private sector should also learn the same thing or they will be under moral pressure to pay salaries every 15 days," Thapa said. "This way, when employees get money quickly, they don't have to go on loan. Having money in their hands increases purchasing power. This will increase overall demand, which will have a positive impact on the economy."
The Office of the Comptroller General has been urged to make arrangements for the payment of salaries to government employees every 15 days, in line with good international practice and to keep economic activities moving. "When employees get their salaries quickly, it also means that market demand will increase," he said. "It is also a good international practice."
