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Cabinet approves wage revision for CPSEs, setting up of 15th Finance Commission

The Cabinet also approved setting up of 15th Finance Commission. However, till 2020 recommendations of the last Finance Commission will be considered.

November 22, 2017 / 06:48 PM IST

The Cabinet on Wednesday approved wage revision for  central public sector enterprises (CPSEs). Finance Minister Arun Jaitley said that every CPSE has flexibility for negotiating wage revision. The Cabinet also said that CPSEs will have to ensure negotiated scales of pay don't exceed existing scales.

The Cabinet also approved setting up of 15th Finance Commission. However, till 2020 recommendations of the last Finance Commission will be considered. The Terms of Reference for the 15th Finance Commission will be notified in due course of time, Jaitley said.

There are 320 CPSEs currently with 9.35 lakh unionised employees.

The decision on the wage policy for the eighth round of negotiations for the workers was taken at the Union Cabinet meeting chaired by Prime Minister Narendra Modi.

The Cabinet also discussed some changes proposed to the Insolvency & Bankruptcy Code (IBC). However, Jaitley refused to comment on these changes.


Wage revision in respect of unionised workmen is decided by trade unions and managements of CPSEs in terms of guidelines issued by the Department of Public Enterprises (DPE) for wage negotiations.

"The wage revision shall be subject to the condition that there shall be no increase in labour cost per physical unit of output. In exceptional cases, where CPSEs are already working at optimum capacity, the administrative ministry/department may consult the Department of Public Enterprises considering industry norms," an official statement said.

According to the decision taken, the management of CPSEs would be "free" to negotiate wage revision for workmen where the periodicity of wage settlement for 5 years or 10 years "expired generally" on December 31, 2016, keeping in view the affordability and financial sustainability of such wage revision for the CPSEs concerned.

"No budgetary support for any wage increase shall be provided by the government. The entire financial implication would be borne by the respective CPSEs from the internal sources.

"In those CPSEs in which the government has approved restructuring or revival plan, the wage revision will be done as per the provisions of the approved restructuring or revival plan only," the statement said.

Besides, CPSEs must ensure that any increase in wages after negotiations does not result in increase in administered prices of their goods and services.

"The management of the CPSEs concerned has to ensure that negotiated scales of pay do not exceed the existing scales of pay of executives/officers and non-unionised supervisors of respective CPSEs.

"To avoid conflict of pay scales of executives/non-unionised supervisors with that of workmen, CPSEs may consider adoption of graded DA neutralisation and/or graded figment during the wage negotiations," said the statement.

(With inputs from PTI)

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Tags: #Economy
first published: Nov 22, 2017 03:47 pm
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