The government is preparing to increase the salary of government employees by 20 percent in the next fiscal year, Kantipur daily reported.

The pay of the government employees has not been increased for the past three years. The government is planning a hike of 20 percent including the increase in the base salary and the perks.

Employees' unions have been demanding a hike of at least 30 percent to keep up with the inflation.

The inflation rate last year was 10 percent and the year before that 12 percent. The inflation is expected to be 10 percent this year.

Although, the government had planned to increase the salary of government employees by 30 percent this year, it could not do so due to the pressure from UCPN (Maoist) to sanction fund for those killed during the conflict.

A hike of 20 percent will cost the government an additional Rs 16 billion. nepalnews.com