Cabinet approves higher pay for CPSE officers

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New Delhi, Nov 20: The government on Thursday approved a hike in the salary of officers in central public sector undertakings (PSUs). The increase would be effective from January 1, 2007 and would benefit 3.78 lakh officers working in central PSUs. The decision to hike salary is not binding on the PSUs though.

As per the decision taken by the Union Cabinet, profit-making CPSEs would have a single set of pay scales for below board level executives with an elongated span. This scale would include the risk pay instead of 5 sets of salary levels. Out of the total 270 CPSEs, 151 earned profits in 2007-08.

Approving the recommendations of 2 nd Pay Revision Committee, chaired by former Supreme Court judge Justice M Jagannadha Rao, the government decided to give uniform fitment at 30% of basic pay plus dearness allowance to all executives instead of graded fitment of 3-42%. In addition to risk pay, executives would also receive a performance related pay at 40%-200% of the revised basic pay.

There would be an extra outgo of Rs 9,000 crore on account of the new pay structure, but it would be borne entirely by individual CPSUs and no budgetary support is involved. "The revised pay scales would be implemented by issue of Presidential Directive in respect of each CPSE separately by the administrative ministry concerned," minister of state in Prime Minister's Office Prithviraj Chavan told reporters after the Cabinet meeting.

For director and chairman and managing directors, running pay scales would be given. This would include risk pay at the maximum instead of fixed pay, which was suggested by the committee, Minister of Heavy Industries and Public Sector Enterprises Santosh Mohan Dev said.

The pay hike would be applicable only by CPSEs that have earned profits in the last three years, R Bandyopadhyay, Secretary in the department of public enterprises said. Profit- making sick companies would be allowed to hike the salary of officers without the risk pay and variable pay. For the marginally profit-making CPSEs at the fitment of 10-20% of their existing pay plus DA, depending upon the affordability of concerned CPSE. "I strongly feel the decision would benefit the executives and non-unionised supervisors of CPSEs and help the enterprises to attract and retain talent," Dev said.