After 7th Pay Commission report windfall for babus, PSU officers to get massive pay hikes; Air India, BSNL, SAIL demur

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New Delhi | Updated: June 21, 2017 1:20:58 PM

Loss-making PSUs like BSNL, Air India won’t hike salaries, some like BHEL will be less generous.

7th pay commission, PSUs, airtelA number of loss-making CPSEs with huge manpower such as BSNL (2.11 lakh), Steel Authority of India (88,600) and Air India (12,800) won’t be able to give a pay hike to their staff. Other loss-making CPSE. (Image: PTI)

For large sections of the officers at the central public sector enterprises (CPSEs), the tantalising wait for a pay hike, similar to the one given to government employees after the 7th Pay Commission (SPC), will end soon. While there are 244 operating CPSEs, the pay revision might be restricted to some 100 of them, official sources said. This is because only these 100 firms would meet the “affordability criteria” suggested by the 3rd Pay Revision Committee (PRC), constituted by the department of public enterprises (DPE).

The pay hike for CPSE officers would cost these units Rs 7,000 crore in 2017-18. Most likely the revised salaries will take retrospective effect, from January 2017.

A pay revision of the same proportion would follow for the CPSE workers (non-officer staff), who constitute more than two-third of the total CPSE manpower. While a final estimate is yet to be made, the pay increase for workers is expected cost the firms about Rs 10,000 crore annually, the sourced added.

The PRC, which broadly followed the SPC award, has suggested a maximum of 15% pay hike (on sum of basic pay, stagnation increments and industrial dearness allowance) subject to the ability of the firms concerned to bear the consequent financial burden. The pay hike can be fully implemented by CPSEs if the additional financial impact due to salary revision for officers is not more than their average profit before tax of the last 3 years. If the financial burden is between 20-40% of the average PBT, then, the pay increase will be 5-10%. However, the pay hike will be nil for executives of CPSEs if the additional cost due to salary revision is over 40% of their average PBT of last 3 years.

The PRC has recommended a minimum pay of Rs 30,000/month, from Rs 12,600/month now, for executives and a maximum of Rs  3.7 lakh for CMDs, from Rs 1.25 lakh, for Schedule A CPSEs  (Depending on profits, the CPSEs are categorised into different schedules, with highest being Schedule A, followed by B, C and D). The pay increase varies across the CPSE categories.

According to the sources, the DPE has already circulated a draft cabinet note on the CPSE pay revision  for inter-ministerial consultations. After pay revision of officers are implemented, the CPSEs, individually, would negotiate with the respective employee unions on the pay hike for workers.

The total workforce with the 244 operating CPSEs is estimated at 12.3 lakh, of which 3.8 lakh are officers and the rest non-officer staff. An estimate of the staff strength of the 100 firms that meet the norms for pay hike was not immediately available.

A number of loss-making CPSEs with huge manpower such as BSNL (2.11 lakh), Steel Authority of India (88,600) and Air India (12,800) won’t be able to give a pay hike to their staff. Other loss-making CPSEs, including Bharat Heavy Electricals (42,000), may be less generous than others who will announce pay increases, due to the stringent affordability criteria recommended by the 3rd PRC.

The FY16 salary and wage bill of all CPSEs stood at Rs 1.28 lakh crore, 40% of which was accounted for by executives.

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The SPC recommendations were out in November 2016 and the government implemented these with effect from January 2016, although the release of the higher pay was from August.The SPC had recommended a net 14.3% pay increase for the central government staff.

As FE reported recently, 4.9 million central government employees will likely start receiving revised allowances, including for house rents (HRA), from July, 2017.

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