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Panel proposes steep pay hike for CPSE officials

Sandeep Joshi

New wage structure also offers ESOP, variable pay and risk rewards

NEW DELHI: Following recommendations for an increase in the salaries of central government employees, a government panel on Friday proposed a steep pay hike for executives of central public sector enterprises (CPSEs) .

The basic pay for chairman and managing directors (CMDs) will range from Rs.55,000 to Rs.1lakh, for directors Rs.50,000 to Rs.80,000, and for below board level executives, it will range from Rs.11,500-Rs.70,000.

The Second Pay Revision Committee Report for the executives of CPSEs, which will benefit lakhs of officers and employees, was presented by committee chairman Justice (retd.) M. Jagannadha Rao to Union Minister for Heavy Industries and Public Enterprises Sontosh Mohan Dev. The Committee was constituted by the government in November 2006.

The new wage structure that represents a 25 to 45 per cent hike also offers Employee Stock Option Programme (ESOP), variable pay and risk rewards and will be implemented retrospectively from January 1, 2007.

The report has classified CPSEs into five categories, based on the turnover, size of manpower and geographical spread of the CPSE. There will be five sets of pay scales based on categorisation of CPSEs. There will be two components of pay — basic pay and risk pay. Risk pay is in addition to basic pay which depends on the categorisation, profitability of the company and the level of the executive.

According to the report the basic pay of below board level executives will range from a minimum of Rs.11,500 to Rs.70,000 at maximum level, while the risk pay ranges from Rs.1100 to Rs.25,000 per month.

A new scale of Rs.65,000-Rs.75,000 at below board level has also been suggested. Revised housing rent allowance would be at the rates of 30 per cent, 20 per cent and 10 per cent of the basic pay depending upon the classification of the cities and towns (based on population).

No change in retirement age has been proposed, while the CCA has been dispensed with.

Similarly, retirement benefits should be 30 per cent of the basic pay, which includes provident fund, pension, gratuity and post retirement medical benefits.

“The government will take a view on the recommendations by December 31 this year. There are several sops for employees that will encourage them to work hard and improve productivity. It will also stop the exodus of CPSE employees to the private sector,” Mr. Dev told reporters.

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