In an effort to leverage sick public sector enterprises, the Cabinet on Thursday approved cash incentives for their chief executives or functional directors.
According to the proposal, the top executives of a unit will be eligible for cash incentives of up to Rs 10 lakh (Rs 1 million) out of the profit a PSE earns.
Further, if the chief executive has contributed exceedingly well in the turnaround of a sick company, his retirement age can be relaxed up to 65 years. The normal retirement age of chief executives of PSEs is 60.
The decision of the Cabinet to give more time to chief executive who has worked out the revival package for a sick PSE and has implemented it with success has been done on the recommendations of the Board for Reconstruction of Public Sector Enterprises.
The board has so far recommended revival of more than 40 state-owned companies and the Cabinet has cleared nearly 20 such cases.
"The extension will be subject to the review of performance by the secretary of the administrative ministry under which the PSE is functioning," Information and Broadcasting Minister Priyaranjan Dasmunshi said.
According to guidelines formulated by the Department of Public Enterprises in consultation with the Department of Expenditure and the Department of Personnel and Training, the cut-off age for fresh appointment where no application is received can be relaxed to 62. In this case, serving or retired PSE executives, government servants and private sector executives could be considered.
The Standing Conference of Public Enterprises, the apex body of state-run firms, today welcomed the government decision to give incentives and extend the retirement age of chairmen and directors if they revive their sick companies.
Meanwhile, a decision to double the salary of the president and the vice-president was today deferred by the Union Cabinet, which decided to take up the matter in the monsoon session of Parliament.
Information and Broadcasting Minister PR Dasmunshi said a decision on the issue was deferred to incorporate the salary of governors in the Bill meant for the president and vice-president.
He said a conference of governors had suggested an increase in the governor's salary also. "Hopefully the matter will taken up in the monsoon session of Parliament," he added.
The Cabinet was to have taken a decision on the proposal to double the salary of the first citizen to Rs 100,000 per month and enhance post-retirement benefits, an official source said.
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