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Cabinet nod for wage accord in PSUs

Special Correspondent

NEW DELHI: The Union Cabinet on Monday set in motion the process of new wage settlements for employees in Central public sector enterprises (CPSE), approving the policy guidelines to be followed by managements during negotiations with unions.

The new wage structures are due to come into effect from January 1 next.

The validity of the existing arrangements ends on December 31.

Cabinet spokesman Priyaranjan Dasmunsi said the managements would be free to negotiate the wage structure consistent with the generation of resources and profits. The settlements would have to be for 10 years, with 100 per DA neutralisation.

"No budgetary support for the wage increase shall be provided under any circumstance. The resources for meeting any increase in obligations must be generated internally and come from improved productivity and profitability and not from government subvention."

According to the guidelines, wage revisions are subject to the condition that there is no increase in labour cost per physical unit of output.

There may be rare exceptions where the units are already working at optimum capacity, considering industry-wise norms.

For CPSEs, which are monopolies or near-monopolies or operate under an administered price structure, it must, in addition, be ensured that any rise in wages does not result in an increase in the administered prices of their goods or services.

For sick CPSEs referred to the Board for Industrial and Financial Reconstruction (BIFR), the existing policy will continue: no revision in wage will be allowed until BIFR approves the revival plan for the enterprise.

The Cabinet Committee on Economic Affairs approved a package for promotion of micro and small enterprises. It includes an increase in the ceiling on the bank loan to Rs. 50 lakh.

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