Hefty Pay Hike At Psus Suggested

The Justice Mohan Committee has recommended more than a 100 per cent hike in salaries of executives of public sector undertakings (PSUs). The recommendations will be effective from January 1, 1997.

The implementation will entail an outgo of up to Rs 2,300 crore annually. There would be no budgetary support for this additional outgo, officials said.

The committee submitted its report to Union minister of industry, Sikander Bakht, yesterday. He said the government would expeditiously process the recommendations and take an early decision.

The new scales will benefit about 3.5 lakh executives and non-union supervisory staff in 242 PSUs. The recommended scale of pay for executives in Schedule A posts is Rs 27,750-31,500, in Schedule B is Rs 25,750-30,950, in Schedule C is Rs 22,500-27,300 and in Schedule D is Rs 20,500-25,000. The current scale ranges from Rs 9,000 to Rs 15,000. That for lowest executive at the EO grade is Rs 6,550-11,350.

The panel also emphasised that an increasing proportion of payments to executives, apart from salaries, should constitute incentives. Perquisites and allowances could go up to 50 per cent of basic pay, it suggested. Payments over and above the ceiling of 50 per cent should be performance-related, not exceeding 5 per cent of distributable profits in an enterprise and 50 per cent of the individual's basic pay.

Relativity between the highest and the lowest paid employee in the public sector should be 10:1 as compared to the current 6.2:1, and that between the chief and the entry-level executives should be 4:1 as compared to the current 3.4:1.

The National Federation of Officers' Association of central PSUs yesterday rejected the report saying it was biased and bureaucratic. The federation said the salary fixed for the chief executive officer of a Schedule A company was at par with that of a secretary to the government.

The committee, headed by Justice S Mohan, was constituted in December 1996 to examine the structure of allowances, perquisites and benefits for PSU executives at the board level, below the board level and the non-union supervisory staff.

Issues relating to the capacity of the public sector to pay, relativity between the emoluments paid in the public sector and of similarly placed employees in the government and private sector, and the need for autonomy for PSUs in determining employees' compensations were considered.

In order to obviate the eroding differentials in the dearness allowance payable under the central dearness allowance and the industrial dearness allowance, 100 per cent neutralisation of cost of living has been recommended for PSU employees covered by terms of reference of the committee.