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Jun 20, 2017 03:30 PM IST | Source: Moneycontrol.com

7th Pay Commission: PSU officers to get massive pay hikes soon

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

7th Pay Commission: PSU officers to get massive pay hikes soon

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The long wait of the officers at the central public enterprises (CPSEs) for a pay hike will end soon as the Central government revises the allowance under the 7th Pay Commission.

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

The issue of central government employees' allowances has been pending for almost one year causing unrest among the employees. Earlier, the Pay Commission had recommended that out of a total 196 allowances, 52 be discontinued entirely whereas 36 other allowances should be subsumed under other allowances.

Out of the 244 operating CPSEs, which has over 12.3 lakh workforce, the revised pay might be restricted to some 100 of them, official sources told Financial Express.

The restriction is based on the firm's meeting the “affordability criteria” suggested by the 3rd Pay Revision Committee (PRC), constituted by the department of public enterprises (DPE).

The pay hike for about 3.8 lakh CPSE officers would cost these units Rs 7,000 crore in 2017-18.

A source to The Financial Express, claimed that the same pay revision 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 to cost the firms about Rs 10,000 crore annually, the source added.

The PRC has suggested a maximum of 15% pay hike on sum of basic pay, stagnation increments and industrial dearness allowance depending on 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 PCR also recommended a minimum pay of Rs 30,000 per month for executives from Rs 12,600 per month now and a maximum pay of Rs 3.7 lakh from Rs 1.25 lakh for CMDs under Schedule A, the report said.

The CPSEs are categorized on basis of profits into different schedules, with highest being Schedule A, followed by B, C and D. Thus, the pay increase varies across the CPSE categories.

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.

However, 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 as the firms are running in losses.

Other loss-making CPSEs include Bharat Heavy Electricals (42,000), who may be less generous than others while announcing pay increase due to the stringent affordability criteria recommended by the 3rd PRC.

In 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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