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Better deal for PSU VRS seekers likely

Sidhartha & Gaurav Raghuvanshi

The government is planning to raise the compensation paid under the department of public enterprises' voluntary retirement scheme to ensure there are more takers for the VRS.

In a cabinet note circulated to the various ministries, the DPE has proposed to raise the compensation paid to the employees of marginal profit making or loss making public sector undertakings to up to 45 days for each year of service put in or for the remaining years of service, whichever is less.

The present DPE guidelines for the marginal profit making or loss making PSUs stipulate a compensation of 35 days for each year of service or 25 days for service till superannuation, whichever is less. Also, the compensation has to be a minimum of Rs 25,000 or 250 days salary, whichever is higher.

For the sick and unviable PSUs, the DPE has proposed that the government hike the compensation to up to 60 days for each year of service put in or for the remaining years of service, whichever is less. At present, a compensation of 45 days emoluments (basic pay and dearness allowance) for service rendered or monthly emoluments at the time of retirement multiplied by the number of months of service left before normal date of retirement, whichever is less, is paid.

For these two categories of PSUs, budgetary support is provided to finance the compensation under the VRS programme, in case bank credit is not available. In case of the fully profit making PSUs, however, the government gives them the freedom to devise their own VRS packages but caps the maximum compensation at 60 days for each year of service put in.

Senior officials told Business Standardthat most of the departments and ministries have concurred with the amendments in the VRS plan. The present package that is being offered to PSU employees was notified by the DPE in May 2000.

Officials added that the new VRS package, while increasing the compensation for employees also aims at allowing all the PSUs, and not only the fully profit making ones, to design their VRS schemes.

As part of the restructuring drive in the public sector, the government is planning a major staff rationalisation programme and offering VRS to the employees of the loss making PSUs before closure.

The heavy industry ministry for instance is planning to off-load around 3,000 employees in the PSUs under its administrative control. Similarly, the textiles ministry has plans to offer VRS in 62 unviable National Textile Corporation mills before going for their closure.

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