This is assuming the maximum possible payout an executive can get. The award, if accepted, would mean that government servants, particularly defence personnel, would be paid far less in comparison even if one takes into account the recent hike recommended by the Sixth Pay Commission.
The second PSU pay revision committee, headed by former Supreme Court Justice M Jagannadha Rao, submitted its recommendations on Friday to Minister of Heavy Industries and Public Enterprises Sontosh Mohan Dev.
"We are giving more authority to the companies. They can earn more profit and can share it with their employees," he said. The report has been sent to the Prime Minister's Office and the finance ministry. After it is examined, a final proposal will be put up for Cabinet approval. The process could take three-six months.
Shorn of variable components like risk pay and performance-related pay, the effective pay hike works out to between 25 per cent and 40 per cent, according to SM Dewan, director general, Standing Conference of Public Enterprises. "This is a paradigm shift in the government's thinking on running a business enterprise. It does not put us on a par with private sector companies, but it is a very good beginning," he added.
|
PSU GRAVY TRAIN | ||||
|
No of CPSUs |
CMD |
Directors |
E5 |
E0 |
|
E/P |
E/P |
E/P |
E/P | |
|
CategoryA+ |
10.89/52.20 |
10.35/36.96 |
6.96/15.92 |
3.8/7.66 |
|
Category A |
10.89/41.76 |
10.35/34.21 |
6.96/12.69 |
3.80/6.23 |
|
Category B |
10.35/38.7 |
9.13/29.28 |
6.96/13/48 |
3.8/6.97 |
|
Category C |
9.13/29.28 |
8.36/21.42 |
6.96/12.79 |
3.8/6.35 |
|
Category D |
8.36/24.96 |
8/19.56 |
6.96/12.18 |
3.8/5.98 |
|
Figures in Rs lakh/ annum are the total cost-to-company, inclusive of basic, risk pay, all perks and performance related pay.These amounts are the maximum payable. Figures in bracket are the % increase over existing annual CTC | ||||
The revised salary structure is proposed to come into effect from January 1, 2007.
The proposed pay structure seeks to reduce the disparity between public sector executives and their private sector counterparts and introduce a performance-based compensation culture.
In another far-reaching recommendation, the award calls for complete delinking of public sector and government pay scales. PSU employees are proposed to get much more than government officials.
For instance, the chairman and managing director of a company like ONGC, NTPC or Bharat Sanchar Nigam Ltd is proposed to be paid Rs 52.20 lakh a year, much more than the annual compensation of Rs 15 lakh (inclusive of all allowances and perks) that a secretary in the central government will get if the Sixth Pay Commission award is implemented in toto.
On a strictly fixed-pay basis, a public sector chairman and director will get Rs 1.25 lakh a month in category A and Rs 65,000 a month in category D companies. In comparison, a government secretary will be paid a fixed Rs 80,000, while the cabinet secretary will be paid Rs 90,000 a month.
The report also recommends that central PSUs be categorised into five (A +, A, B, C, D) based on turnover, manpower and geographical spread.
"We want total delinking of PSUs from the government as we want them to become profitable and strong," said Board for Reconstruction of Public Sector Enterprises Chairman Nitish Sengupta, who was a member of the committee.
The pay will be split into two components, basic pay and risk pay, with the latter depending on categorisation, profitability and the executive's grade. Loss-making firms will not be required to shell out risk pay.
Pay panel's other recommendations