Govt plans new pay committee for public sector staff

NEW DELHI: There is some good news for employees of public sector undertakings (PSUs). After considering the case of government employees, the central government is planning to set up a separate pay committee for employees of PSUs. The move is likely to benefit more than 17 lakh employees working in PSUs across the country.

The PSU pay committee will review the salary structure and components of PSU employees and submit its recommendations to the government before New Year. “We are in the process of constituting a committee for revising the salaries of PSU employees,” a senior government official told ET.

This committee will take into account various issues like basic pay, house rent allowance, transportation benefit, leave travel concession etc. One vital issue that is expected to be taken up by the committee is the merging of the dearness allowance (DA) with the basic salary.

“For central government employees dearness allowance has been merged with the basic salary but this benefit has not been extended to PSU employees,” the director general of the Standing Conference of Public Enterprises (SCOPE) Dr SM Dewan told ET.

Public sector undertakings want that salaries should be performance oriented and the sector should be rewarded better as it is engaged in business activities unlike the government, he added. The plus point of merging DA with the basic salary is that benefits like HRA, which are calculated on the basic pay will go up.

One of the key reasons for poaching of employees from public sector undertakings by the private sector has been the low salaries given to executives in PSUs. This has become a more acute problem with private entities including foreign players entering into areas which were previously the bastion of public undertakings.

The last PSU pay committee, headed by Justice Mohan, had made increases in the house rent allowance of employees under various brackets. After the Pay Commission had brought a number of cities into the ambit of A-1 category for highest HRA, the pay committee had increased HRA for executives of PSUs to 20%.

A similar move is expected from the committee as the rentals have gone up significantly in the ten year period, according to government officials. The last pay committee for public sector enterprises was set up in 1997.

The committee had made recommendations for a 10-year period and, therefore, a new set of recommendations are required to govern the pay structure of PSU employees. The recommendations of the 1997 pay commission for public sector enterprises will expire on December 31, ’06.