The Centre today cleared a salary revision that could translate into hikes of up to 20 per cent for PSU executives in addition to what a pay panel had recommended.
The increases had been expected since January this year, when officials of oil companies went on strike against the panel’s suggested increases, saying they weren’t enough.
The protest had left fuel pumps dry and threatened to snowball into a transport crisis before the Centre cracked down on the recalcitrant officials. It had also promised to look into the demands for more pay.
A cabinet meeting headed by Prime Minister Mr.Manmohan Singh announced the pay revision after it was cleared by the Election Commission, which asked the government not to publicise the move to keep the ruling UPA from using the bonanza as a campaign issue.
Much of the 20 per cent hike will come from a tweak in the pay structure of the executives that will see 78.2 per cent of their dearness allowance (DA) merged with basic pay compared with the 68.8 per cent proposed by the panel and announced last November.
Combining a higher proportion of the DA with the basic pay pushes up the amount on which various allowances, such as HRA and retirement benefits, are calculated. This leads to an increase in total allowances.
Giving an example, an official said a basic salary of Rs 100 would now translate into Rs 370.48 (with allowances) against Rs 351.12 last year. The figure leaves out superannuation benefits which, if added, would take the emoluments to Rs 532.65 against Rs 504.70.
The increased DA merger will be effective from last November. The revised pay recommended by the panel is to be effective from January 2007.
This DA merger and the revised pay have to be cleared by the boards of individual companies before the officials get the raise.
Former Supreme Court Justice M. Jagannadha Rao, who headed the PSU pay-revision panel, had submitted his report last May and observed that the compensation should be fixed independent of government servants’ salaries.
The panel had recommended that performance-related pay be made an integral part of the PSU salary package, as was the case in private firms.
This component should be directly linked to the profits of the PSUs and performance of the executives, the panel had said.
News Source : PTI