The administrative ministries will no longer have any say in determining the retirement age of employees in the public sector undertakings under their control and the decision will now be taken by the Cabinet.
The government gave its nod to a proposal put forward by the ministry of heavy industry and public enterprises.
This move, which will lead to a common retirement age for all public sector employees, comes after complaints of misuse of powers by the ministries concerned.
"There have been several complaints. In some cases, the retirement age was reduced from 60 to 58 as a result of a tussle between ministries and the top management of the PSUs.
In some other cases, the retirement age was increased in an act of favouritism," said an official.
Earlier, the Cabinet had been vested with the power to decide matters relating to retirement age of employees. But in 2001, the power for determining the retirement age was delegated to the ministries concerned.
"Though in some cases, there were solid reasons for curtailing the retirement age from 60 to 58 as those entities had surplus manpower even at a time when they had lost their viability, in many cases there was a sheer misuse," source said.
After a decision is taken, any proposal for determining retirement age needs to be submitted with the heavy industry ministry, which after thoroughly examination will send it to the Cabinet.
"The move will boost the confidence of public sector employees that no arbitrary decisions can be taken any more," an official said.
It, however, can affect the prospects of profit-making PSUs, which are allowed to frame their own guidelines for voluntary retirement schemes for reducing work force to remain lean and competitive.