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7th Pay Commission: PSU officers may get allowance hike; BSNL, Air India employees could lose out

Out of the 244 CPSEs operating in the country, the benefits of allowance hike may reach employees of only 100 companies.

Along with the central government employees, officers and non-official staff working with central public sector enterprises (CPSE) also stand to benefit once revised allowance structure recommended by the Seventh Pay Commission gets the federal Cabinet's approval. However, everybody may not get a piece of the pie.

Out of the 244 CPSEs operating in the country, the benefits of allowance hike may reach employees of only a hundred companies, stated the Financial Express in a report. Official sources were quoted in the report that only 100 PSUs fulfil the affordability criteria set by the Third Pay Revision Committee (PRC). In other words only a hundred CPSEs can afford to pay for hiked allowances of their employees.

CPSEs suffering losses and employing a huge workforce, like BSNL or Air India will not be able to increase salaries. Other loss-making CPSEs like Bharat Heavy Electricals Limited (BHEL) will not be able to offer paychecks as big as they want to, the report stated.
The DPE has already circulated a draft Cabinet note on the pay revision for inter-ministerial consultations. Once the pay hike for CPSE officers is in practice, the units will take up the issue with respect to non-official staff with their respective worker unions.

The PRC was constituted by Department of Public Enterprises (DPE) on July 9, 2016, same time when the Cabinet approved recommendations on pay and pension by the 7th Pay Commission. It even imitates most of the pay panel's recommendations. One of the major objectives of the Committee was to review salaries and allowances of board level functionaries, below board-level employees and non-official staff.
Pay hike for CPSE board-level and below board-level officers will cost the units around Rs 7,000 crores in the current fiscal year. Hikes in the same proportion for non-official staff as the officer level will put a burden of Rs 10,000 crores every year. To put things in perspective, this concerns more than Rs 12 lakh employees across the 244 CPSEs. The number of staff working for the 100 eligible CPSEs was not available, though, the report stated.

The PRC has also recommended 15 per cent pay hike subject to the ability of companies to pay them. The pay hike can be implemented in entirety by the CPSE only if the resulting additional financial burden due to salary revision of their officers does not exceed their average profit before tax (PBT) for the past three financial years.

The salaries could be hiked from 5 per cent to 10per cent if the aforesaid burden is between 20 per cent and 40 per cent of the average PBT. There will be no hike for executives if the additional cost due to salary revision is over 40% of their average PBT during the stipulated time frame. The pay increase varies across the CPSE categories.