New Delhi: Fearing a backlash from the executives of Central public sector enterprises in the general election beginning 16 April, the Congress party-led United Progressive Alliance (UPA) government on Monday raised the salaries and allowances of around 400,000 executives.
The decision comes over three months after the executives of public sector enterprises struck work for higher pay in December and has prior clearance from the Election Commission (EC).
The decision to improve the salary structure of officers at board level and below, along with supervisory staff, was taken at the cabinet meeting chaired by Prime Minister Manmohan Singh.
The improved pay packages, over and above the hikes announced last year, will include increase in house rent allowance and retirement benefits.
Briefing reporters after the cabinet meeting, home minister P. Chidambaramsaid the revision in the pay structure will vary across companies. He didn’t disclose more details or how much the total increase in the wage bill of these companies will be.
These executives have been demanding full implementation of the M.J. Rao Committee’s recommendations, as the pay revisions notified earlier were lower than those recommended by the committee.
According to Communist Party of India (Marxist) politburo member M.K. Pandhe, the Rao Committee had, in 2008, suggested a 30% pay hike for employees belonging to the categories of “executives” and “non-unionized supervisory staff”.
“They (the government) have largely gone by the report,” said Pandhe.
Separately, top executives of some central public sector enterprises say the pay hike is in the range of 10-20%. They didn’t want to identify themselves or name their firms.
While chiefs of several central public sector enterprises welcomed the move, several employees Mint spoke to felt otherwise.
“There is nothing in this raise. In fact, superannuation benefit was not even a demand. The technical corrections have not been made. There is a lot of dejection and demoralization among PSU employees,” said a senior executive at Oil and Natural Gas Corp. Ltd(ONGC), declining to be identified. PSU is an acronym for public sector units.
A three-day strike spearheaded by the Oil Sector Officers’ Association (OSOA)—an umbrella group that was demanding a pay increase for the 55,000 employees in the sector—in December triggered nationwide shortages of petroleum products such as petrol and diesel and crippled power, fertilizer, steel and aviation companies. The government struck back, with the public sector enterprises terminating the services of 67 executives and suspending 35 others. While 62 terminated executives were reinstated, 26 suspended executives are yet to return to work.
Amit Kumar, president of OSOA, declined to comment. He is one of the executives sacked by ONGC.
EC’s model code of conduct kicked in when the Lok Sabha elections were announced on 2 March. The pay hike was announced after securing clearance from EC and on condition that the move will not be advertised by the government.
While Sarthak Behuria, chairman of Indian Oil Corp. Ltd(IOC), and U.D. Choubey, chairman and managing director of GAIL (India) Ltd, declined to comment, K. Ravi Kumar, chairman and managing director of Bharat Heavy Electricals Ltd, said, “We are happy with this as we are adding 4,000 employees per year. This hike will help us in attracting talent.”
IOC and GAIL were among the public sector enterprises that took strict action against their employees following the strike.
Similarly, S.K. Chaturvedi, chairman and managing director of Power Grid Corp. of India Ltd(PGCIL), said the pay rise is a “welcome step”.
However, a PGCIL executive, who didn’t want to be identified, said, “The issue of risk pay was not addressed at all. The executives still have their grievances.”
Risk pay is a compensation for executives working at dangerous and difficult locations.
The decision is based on the recommendations of the group of ministers (GoM) headed by Chidambaram; it had petroleum minister Murli Deora, minister of state for finance P.K. Bansaland heavy industries minister Santosh Mohan Devas members. GoM studied the revised salary and allowances notified by the government in November.
On Monday, the government also decided to exempt wheat from products for which states can impose limits up to which traders could stock, while extending till September the powers of states to take de-hoarding measures for other products such as pulses, paddy and edible oils.