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New benefit for employees of profit-making CPSEs

NEW DELHI: The Union Cabinet on Wednesday approved the merger of 50 per cent industrial dearness allowance (IDA) with the basic pay of profit-making Central Public Sector Enterprise (CPSE) employees which would effectively increase their allowances and retirement benefits.

Briefing newspersons after the Cabinet meeting, Information and Broadcasting Minister Priyaranjan Dasmunsi said: “The proposal will benefit employees following industrial dearness allowance pattern of pay scales in CPSEs which are in a position to absorb the additional expenditure without budgetary support.”

The merger of IDA with basic pay is to be applicable to the board level functionaries of CPSEs, executives below the board level and non-unionised supervisors with effect from January 1, 2007. “In [the] case of unionised workmen, the board [of each CPSE] may take a decision after negotiation with the union,” Mr Dasmunsi said.

The consequent benefits by way of upward revision in emoluments will also apply to employees of the Food Corporation of India. The board of directors of the CPSEs can decide on the merger of DA with the approval of their administrative Ministry.

According to an official statement here, as per the recommendations of the Second Pay Revision Committee headed by Justice M. Jagannadha Rao, the merger of dearness allowance with basic pay for employees of CPSEs following the 1997 IDA pattern of pay scales would be subject to the condition that a portion of the IDA equal to 50 per cent of their existing basic pay may be merged with effect from January 1, 2007 and shown distinctly as dearness pay (DP) and be counted for purposes like payment of allowances, transfer grant, retirement benefits, contribution to provident fund, licence fee and various advances.

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