Now, PSUs demand pay hike

NEW DELHI, April 5: The public sector has demanded a sharp rise in their pay packets. In its submission to the Justice Mohan Committee set u...

NEW DELHI, April 5: The public sector has demanded a sharp rise in their pay packets. In its submission to the Justice Mohan Committee set up to review PSU pay packets, the Standing Conference of Public Enterprises SCOPE has asked that the compensation packages be brought at par with that of the private sector.

The Committee is learnt to have agreed to these suggestions and is likely to incorporate it in the final recommendations when the report is submitted to the Government next month. In its submission, the PSUs8217; lobbying body, SCOPE, has asked that the minimum salary of the CEO of an A Class company be raised to Rs 6 lakh per annum as has also been suggested by the Disinvestment Commission. According to a study carried out by AF Ferguson, quoted by SCOPE, the basic pay plus DA of board level appointee in a PSU is Rs 2.31 lakh per annum as against Rs 4.65 in the private sector, taking the lower range.

It has justified the rise by saying that the full-time directors and chief executives have to facerisk in terms of their employment security and that there should be a link between risk and reward. Another important need is to make the compensation package more flexible. Commission plus performance bonus accounts for only two per cent in case of PSUs as against 46 on an average for the private sector.

In view of this the Committee has been asked to increase the variable component of the package by making provision for profit sharing and stock option schemes for the board-level executives. SCOPE has sought 100 neutralisation of DA for all levels of PSU. This means that the DA rise will be equal to the rise in consumer price index. Currently only certain lower categories of staff get this facility. The DA of the top brass is neutralised only to the extent of 50.

The panel has been asked to delink pay scales for below board-level executives from that of board level executives and giving sufficient autonomy to decide the pays and perks. The board of directors may be empowered to take decisions fortheir respective companies depending on their health, size, profitability, performance, capacity to pay and other factors.

Pay revision of central PSU executives is due with effect from 1.1.97 for which the Justice Mohan Committee was set up in December 1996. According to the terms of reference of the panel, it will examine the present structure of pay allowances, perks, benefits for board-level, below board- level executives and non-unionised supervisory staff of PSUs.