PSU executives’ perks may be tweaked to face competition

NEW DELHI: Chauffeur-driven cars or uniform allowance may soon be a thing of the past for most officers of public sector companies. Instead of providing for such perks, PSUs are planning to work out monetary compensation to executives receiving such benefits to cut overheads liabilities. Except for the top management, all others would be covered under the new approach, if proposals to this effect are approved by the government.

PSUs want to follow a ���cafeteria approach��� where the employees would be allowed to choose from the list of additional benefits ��� chauffeur-driven car, club membership, or allowances for newspapers and magazines, uniform, washing, children���s education, entertainment and canteen subsidy ��� but with the clause that clubbed together they cannot exceed 50% of the basic pay of an employee.

���Chauffeur-driven car should be limited only to the CMDs and directors. It doesn���t make sense that even regional managers use these services. The second pay committee report (PRC) has also recommended that a cap should be imposed on the incentives offered to employees and we are working on it,��� a Department of Public Enterprises (DPE) official said. The PRC has recommended that PSUs should not indulge in ���unwanted��� expenses. Where provision of company vehicles becomes necessary, it should hire vehicles instead of purchasing them.

The government feels that earlier some units of PSUs were located in hinterlands where there were no such services. With increasing development, there is no need of providing these incentives. ���We���ve considered this aspect in detail. Public sector enterprises operating in the north-eastern states and those involved in mining companies will be kept out of the 50% cap since the working conditions in these places are tough,��� the official said.

The move is aimed at making PSUs competitive with their private counterparts. The government wants PSUs to make an assessment of their manpower cost and productivity with the best available in the respective sectors in private and multinational companies. At present, even sick PSUs offer such benefits to their employees and this creates an additional burden on the government exchequer.