Monday, December 13, 2010

Pay Hike’s Post-Madness

Karma Dendup is a grade 8 civil servant in Thimphu. He pays monthly house rent of Nu 6,500 and another Nu 3,000 for groceries. Every month, a balance of Nu 2,000 remains in his pocket which is only enough to fill the gas in his car. Whenever the opportunity knocks he resorts to corruption because he has to live up to the lifestyle of the city.

Recently, the news on the pay hike by 20 percent made him happy. He thought he could at least earn Nu 2,000 more.

But he was shocked when his house rent has been increased to Nu 7,000 soon after the pay rise was announced. His monthly grocery expenditures also increased to Nu 4,000 as the price of the goods skyrocketed. He felt helpless. Even after his salary being raised by 20 percent, he was as helpless as before.

Paradoxically, in the last parliament session the finance minister appealed to the house owners and shopkeepers not to increase the house rent and the price of goods explaining that the pay rise was not huge. However, the house rent and price of the goods soared up frantically. Did any of the house owners and shopkeepers listen to the finance minister’s earnest appeal?

What’s wrong with the existing system?

Every time the government raises the pay scale, the house owners and shopkeepers go mad. It seems that the government raises the profit for the house owners and shopkeepers, but not pay increment for the public servants. It is for these two groups of people to pay back their loans fast and to make lump sum profit.

So, what our policymakers should realize is that they should build up some practical strategic mechanisms or regulatory bodies to curb post-madness of the pay rise.

Firstly, they should review the existing “dormant” Tenancy Act and implement it vibrantly by educating the tenants and house owners on its usefulness and clauses.

Secondly and most importantly, the MoWHS should form an agent or organization to look after the housing affairs in the country. Empowered to look into the housing matters in the country autonomously, the agent should possess efficient number of professionals and technicalities in architectures.

Every building leasing its apartments on rent should be made compulsory to register with this body. It should look and study each of the apartments of the registered building and fix the rent according to the size and amenities of the apartments, location, etc of the building. The fixed rent should be strictly followed by both the parties and is to be raised 10 percent after two years only.

Those house owners whose apartments are empty or whose buildings are under construction should also register with the agent about the date of vacating time and date of completion. So, those apartment hunters can consult the agent directly instead of knocking each door regarding the vacant apartments.

This agent can also help those who wanted to exchange an apartment at Babesa to Motithang or for those wanting to exchange an apartment at Jungshina to Changzamtog.

Many other unnecessary problems of the tenants and house owners can be solved. For example, a bachelor who is occupying a huge apartment can register with the agent in want of a small bachelor quarter or those with huge family occupying a small apartment can exchange with the bachelor. Or those wanting to share the apartment can also register with the agent, so any interested person who is interested to share the apartment can apply here. Moreover, it can help generating gainful job opportunities.

Thirdly, landowners can also lease out their houses as Paying Guest (PG) so that the new office goers need not take the burden of renting a huge apartment and paying bulky amount for the rent.

Lastly, the trade and industry office should issue as many business licenses (except bar license) to the interested business entrepreneurs to avoid monopolistic market. This can, definitely, bring greater and healthy competition in the market helping retain the price of the goods. The trade authority should also strictly regulate the MRP of each necessity goods.

Note: This is a collective work of Rekkha Monger, RIM and myself.

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