40% 'peanuts', we want 100% hike: PSU employees

The over 1.6 million employees of central public sector companies are demanding a salary increase of over 100 per cent, saying the average 40 per cent raise recommended by the Sixth Pay Commission for government employees is not enough.

"Employees of public sector companies need to be remunerated in line with private sector companies if they are to be competitive," said S M Dewan, director general, Standing Conference of Public Enterprises (Scope), the body representing all public sector enterprises.

The Sixth Pay Commission: Complete Coverage

The 244 central public sector companies earned profits of over Rs 80,000 crore (Rs 800 billion) in 2006-07. In the same year, the employees of these companies drew salaries of around Rs 52,580 crore (Rs 525.8 billion) including benefits such as bonuses. A 100 per cent hike would take this bill to over Rs 100,000 crore (RS 1,000 billion).

Salaries of public sector workers were last revised in 1997 and were scheduled for the next revision on January 1, 2007.

In 2006 the government had set up a pay revision committee for central public sector companies headed by former Supreme Court Justice MJ Rao. Scope has made presentations to the committee, which is expected to submit its report in a month.

"A 40 per cent hike in salaries after 10 years is peanuts. Employees of Navratna companies should get an average gross monthly salary of at least Rs 150,000," said Sanjay Goel, president, Association of Scientific and Technical Officers of Oil and Natural Gas Corporation. The association had threatened to strike work last August seeking higher salaries.

The average gross monthly salary an ONGC executive earns today is between Rs 40,000 and Rs 50,000. Private sector employees earn five to six times the salary earned by their public sector counterparts.

A former chairman and managing director of an oil company said one major issue is to revise the dearness allowances. Bureaucrats currently get central DA, which is higher than industrial DA drawn by the public sector companies.

Another anomaly that public sector companies want corrected is their being omitted from pension. Public sector employees currently get contributory provident fund money as a post-retirement benefit.

The provident fund interest rate is 8.33 per cent compared, while bureaucrats get a pension at a rate of over 50 per cent of the last salary drawn before retirement, said Ashok Singh, convener of the 45,000-strong Oil Sector Officers' Association.

SCOPE's Dewan said that the primary issue for the public sector companies was retention of talent. "The important thing is to empower the boards of the companies to take decisions with regard to its employees' remuneration package of its employees," he said.

The average attrition rate across public sector companies is around 4 per cent. "The problem is that this 4 per cent constitutes the cream of the companies. Employees are being groomed by the government companies and the private sector companies are reaping the benefits by paying huge salaries," said an official with a government-owned power company.

Another top official with an oil company said a higher wage bill for the public sector companies would not impact their profits.

"The recommendations we have made to the MJ Rao committee take into account the paying powers of the individual companies. There will be no adverse impact on the bottom-line," the official said.