The Union Cabinet today approved an average 67 % hike in wages of 1.6 million employee of public sector companies (PSU), with effect from January 1, 2007, said Heavy Industries Secretary R Bandyopadhyay. This hike is expected to their salaries at par with Central govt officers.
He said that with incentives salary hikes can go up to 200 %. Central govt employees were awarded around 40 % higher wages, earlier this year.
However, industry officials said that when the new basic pay is merged with the dearness allowance the employees get an effective hike of 20-25 %.
The Chairman of a Navratna public sector company, such as Oil and Natural Gas Corporation (ONGC) or BHEL, will now draw a basic salary of around Rs 1.25 lakh per month from the previous around Rs 25,000 per month. The Chairman of a ‘A’ category govt-owned company is equivalent to the rank of an additional secretary in the govt of India. With the pay revision for the state-owned companies, the salary of a chairman exceeds thats of an additional secretary who gets a basic salary of around Rs 70,000 month.
“Looking at it in percentage terms the hike in good. But we are getting this hike after 10 years. But expectations were higher,” said an official with a state-owned oil company.
The higher wages for employees of govt-owned companies follows the pay revision for govt officials. More money with the 5.4 million employees – 1.6 million state-owned companies’ employees and 3.8 million government officials – is expected to boost spending and increase demand for commodities, consumer durables, automobiles and houses. As a credit crisis grips the world, Indians too are spending lesser which is affecting industrial growth.
The revised pay package also includes revision in dearness allowance and other allowances, besides performance related incentives, Minister of State in the Prime Minister’s Office Prithviraj Chavan told reporters here.
The financial burden of the higher salaries will be borne completely by each state-owned company. “It does not involve any budgetary support,” Chavan said.
The revised pay scales would be implemented by issue of Presidential Directive in respect of each state-owned company separately by the administrative ministry concerned, the govt said in a statement.
“Out of 151 profit-making PSUs, 76 will be able to implement this scheme fully. The rest can implement this scheme in phases,” Bandyopadhyay said.
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