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3rd Pay Revision for revision of pay for executives and non-unionized supervisors in CPSEs: Approved except Allowances

3rd Pay Revision for revision of pay for executives and non-unionized supervisors in CPSEs: Cabinet Approved except Allowances
3rd-prc-cpse-approved

No. 252/21112017-Cab. III
Government of India
Cabinet Secretariat
Rashtrapati Bhavan
New Delhi, dated the 29th May, 2017

OFFICE MEMORANDUM

Sub: Recommendations of 3rd Pay Revision Committee for revision of pay for executives and non-unionized supervisors in CPSEs - reg.

The undersigned is directed to enclose a copy of the minutes of the meeting of Committee of Secretaries (Doc. No. 23/2017-CA.III) held on 12th May, 2017 at 3:15 PM in the Committee Room of the Cabinet Secretariat, Rashtrapati Bhawan on the subject mentioned above.

2. It is requested that the status of action taken on the relevant decisions may kindly be uploaded in the ‘Committee of Secretaries’ module of e-Samiksha portal.

(Alok Tiwari)
Deputy Secretary

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CABINET SECRETARIAT
Doc. No. 23/2017-CA.III

MINUTES OF THE MEETING OF COMMITTEE OF SECRETARIES

Venue : Committee Room, Cabinet Secretariat Rashtrapati Bhavan
Date of meeting : 12.05.2017
Time of meeting : 3:15 PM

P R E S E N T

Sh. Pradeep Kumar Sinha, Cabinet Secretary
Dr. A.R. Sihag, Secretary (Coordination), Cabinet Secretariat
Ms. Seema Bahuguna, Secretary, D/o Public Enterprises
Sh. B.P. Sharma, Secretary, D/o Personnel & Training
Sh. R.N. Choubey, Secretary, M/o Civil Aviation
Sh. Pradeep Kumar Pujari, Secretary, M/o Power
Sh. Arun Kumar, Secretary, M/o Coal
Sh. K.D. Tripathi, Secretary, M/o Petroleum & Natural Gas
Ms. Bharati S. Sihag, Secretary, D/o Fertilizers
Sh. Anant Kumar Singh, Secretary, M/o Textiles
Sh. B.N. Mahapatra, Finance Commissioner, M/o Railways
Sh. Pramod Kumar Das, Addl. Secretary, D/o Expenditure
Sh. Subhash Chandra Pandey, Addl. Secretary, D/o Heavy Industry
Sh. N. Sivasailam, Addl. Secretary, D/o Telecommunications
Ms. Surina Rajan, Addl. Secretary, D/o Defence Production
Sh. SAM. Rizvi, Joint Secretary, Cabinet Secretariat
Sh. Rajesh Kumar Chaudhry, Joint Secretary, D/o Public Enterprises
Sh. S. Meenakshi Sundaram, Adviser, D/o Public Enterprises
Sh. T. Srinivas, Joint Secretary, M/o Steel
Sh. A.P. Dwivedi, ED (PSU), M/o Railways
Sh. Alok Tiwari, Deputy Secretary, Cabinet Secretariat
Sh. Neeraj Verma, Assistant Director, D/o Public Enterprises

Sub: Consideration of the recommendations of the 3rd Pay Revision Committee (PRC) for Revision of Pay for Executives and Non-Unionized Supervisors in CPSEs - reg.

SECRET

Subject: Recommendations of 3rd PRC for revision of pay for Executives and non-unionized Supervisors in CPSEs.

A meeting of Committee of Secretaries on the above mentioned subject was chaired by Cabinet Secretary at 3.15 PM on 12.05.2017 in the Committee Room, Cabinet Secretariat, Rashtrapati Bhawan, New Delhi.

2. Secretary, DPE made a presentation on the subject. The deliberations of COS on different recommendations of the 3rd PRC are discussed below.

3. Affordability
(i) Secretary, DPE apprised the COS about the recommendations of the 3rd PRC regarding ‘affordability clause’. She stated that broadly speaking, 3rd PRC had recommended that additional financial impact should be within 20% of average PBT of last 3 years preceding the year of implementation. Secretary, M/o Coal expressed the view that CIL and its subsidiaries may be considered as a single unit for the purpose of the “affordability clause’ because the executives in CIL are recruited centrally and are transferrable from holding company to subsidiaries and vice versa.

He stated that this matter has already been considered and approved by Cabinet earlier at the time of implementation of 2007 pay revision. CoS was of the view that past precedent in respect of CIL may be taken into account for ‘affordability’.

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(ii) Recommendation: The recommendation of 3rd PRC regarding ‘affordability clause’ may be accepted. However, in case of ClL, the holding company and its subsidiaries would be considered as a single unit for the affordability clause as per past precedent.

4. Fitment benefit

(i) Secretary, DPE stated that 3rd PRC had recommended uniform fitment benefit of 15% of Basic Pay plus DA in case the financial impact of the pay revision is within 20% of the average PBT of last 3 years and part fitment slabs of 10% and 5°/o in case the financial impact is more than 20%. After detailed discussion, CoS was of the View that these recommendations were acceptable.

(ii) Recommendation: The fitment benefit as recommended by 3rd PRC may be accepted.

5. Dearness Allowance, annual increment, promotion increment, stagnation increment and bunching of pay:

(i) Secretary, DPE apprised that 3“ PRC had recommended continuation of 100% DA neutralization. The annual increment and promotion increment were recommended at 30/0 of basic pay. The provisions regarding stagnation increment and bunching of pay in the situation where a lower fitment benefit (i.e. 10°/o or 5%) is granted due to affordability issues were brought out. There was consensus in the CoS that recommendations of 3rd PRC on these issues may be accepted.

(ii) Recommendation: 3rd PRC’s recommendations regarding dearness allowance, annual, promotion and stagnation increments and bunching of pay may be accepted.

100% IDA Neutralization, Annual increment
The CoS has approved the 3% of basic pay for the purpose of annual increment and promotional increment. It also has given the nod for the 100% IDA neutralization for calculating the fitment benefit for existing employees. It means the IDA rate at the time of 31.12.2016 will be merged with the basic pay. Here is the formula for calculating the revised basic pay:

A B C D
(Revised
Basic Pay
w.e.f.
01.01.2017)
Basic Pay + Stagnation increment(s) as on 31.12.2016 
(Personal Pay / Special Pay not to be included)
+
Industrial Dearness Allowance (IDA) as applicable on 1.1.2017 
[under the IDA pattern computation methodology linked to All India Cumulative Price Index (AICPI) 2001=100 series]
+ 15% of (A+B) + Aggregate amount rounded off to the next Rs.10/-.
6. Pay Protection

(i) Secretary, DPE apprised that 3rd PRC had recommended that a Special Pay should be granted to accord pay protection to executives whose pay after promotion or selection to a Board level position exceeds the maximum of pay-scale of that post.  Additional Secretary, D/o Expenditure stated that such a provision is not available in Central Government whereby pay could be fixed beyond the maximum of the scale of a post. Hence, the recommendation was not supported by D/o Expenditure. Secretary, DoPT mentioned that government servants are allowed pay only up to maximum of the scale/level of the post to which they are appointed. CoS observed that the 3rd PRC has recommended fairly wide pay bands along with up to three stagnation increments and therefore there is hardly any likelihood of stagnation in the event of promotion / selection of an executive to a higher post. Besides, taking into account the above views of DoPT and DoE the recommendation of 3rd PRC regarding pay protection may not be accepted.

(ii) Recommendation: 3rd PRC’s recommendation regarding pay protection may not be accepted.

7. Pay scales

(i) Secretary, DPE explained that the 3rd PRC had recommended continuing with existing levels and number of pay scales linked to Scheduled classification of CPSEs. Thus, 3r PRC had recommended revised pay scales corresponding to existing pay scales for each of the existing Grades.

(ii) Recommendation: 3rd PRC’s recommendations regarding pay scales may be accepted.

Grade Existing Pay Scale Recommended Pay Scale Applicable Schedule of CPSE
E0 12600-32500 30000-120000 A, B, C, D
E1 16400-40500 40000-140000 A, B, C, D
E2 20600-46500 50000-160000 A, B, C, D
E3 24900-50500 60000-180000 A, B, C, D
E4 29100-54500 70000-200000 A, B, C, D
E5 32900-58000 80000-220000 A, B, C, D
E6 36600-62000 90000-240000 A, B, C, D
E7 43200-66000 100000-260000 A, B, C
E8 51300-73000 120000-280000 A, B,
E9 62000-80000 150000-300000 A
Director 75000-100000 180000-340000 A
CMD 80000-125000 200000-370000 A
Director 65000-75000 160000-290000 B
CMD 75000-90000 180000-320000 B
Director 51300-73000 120000-280000 C
CMD 65000-75000 160000-290000 C
Director 43200-66000 100000-260000 D
CMD 51300-73000 120000-280000 D

8. Perks and allowances

(i) Secretary, DPE informed that the 3rd PRC had recommended that Board of CPSEs may be empowered to provide up to a ceiling of 35% of Basic Pay towards perks and allowances under the concept of ‘Cafeteria Approach’. Further, 3rd PRC had recommended that the ceiling shall be partially linked to Industrial DA (IDA) in future whereby it would be enhanced by 25°/o whenever IDA rises by 50°/o. In addition, it was recommended that cost of infrastructure facilities should not be covered within the ceiling. As regards company-owned accommodation provided to executives, CPSEs would be able to bear Income Tax liability on the ‘non-monetary perquisite’ of which 50% shall be loaded within the ceiling of 35% on perks and allowances. It was pointed out by Secretary, DPE that at present, the ceiling for allowances under ‘Cafeteria Approach’ is not linked to IDA.

(ii) Secretary, DPE stated that 3rd PRC had also made recommendations in respect of certain allowances such as location based compensatory allowance, work based hardship duty allowance and project allowance which are outside the abovementioned ‘Cafeteria Approach’. In addition, it had also recommended that work related administrative expenditure and reimbursement of telephone/internet facility etc. may be allowed outside the ceiling on perks on allowances.

(iii) Secretary, MoCA stated that certain allowances in CPSEs under MoCA such as flying/engineering related allowances applicable to Air Traffic Controllers, Flying Crew etc. may be kept outside the ceiling of 35°/o in order to attract and retain talent. Additional Secretary, D/o Expenditure stated that 7th CPC has recommended hardship and location based allowances on slab basis and not as a percentage of pay. A decision on recommendations of 7th CPC pertaining to allowances of Central Government employees, many of which are closely related to the allowances of CPSE employees which are outside the ‘Cafeteria Approach’, is yet to be taken by Government. The matter was discussed in detail. It was suggested that a view on allowances which are analogous to those of Central Government employees may be taken after the latter are finalized.

(iv) Recommendation: The recommendations of 3rd PRC regarding allowances under ‘Cafeteria Approach’ up to a ceiling of 35% excluding the cost on infrastructure facilities and 50% of Income Tax liability on ‘non-monetary perquisite’ related to company owned accommodation may be accepted. Further, the recommendation of 3rd PRC regarding work related administrative expenditure and linkage of allowances under ‘Cafeteria Approach’ with IDA may not be accepted. However, decision regarding other allowances may be taken by DPE in consultation with M/o Finance separately after a decision is taken by Government on the allowances for Central Government employees. Till a decision is taken regarding the other allowances, the existing allowances in CPSEs at existing rates may continue to be paid on pre-revised pay.

9. Performance related pay (PRP)

(i) Secretary, DPE informed CoS that 3rd PRC had recommended that as in the past, PRP should be paid from 5% of profit accruing from core business activities. However, the ratio of relevant year’s profit to incremental profit for calculating PRP has been modified from 60:40 to 65:35. In addition to the existing provision for CPSE and individual Performance, provision has also been made for Team Performance. Thus CPSE Performance, Individual Performance and Team Performance have been given weightages of 50°/o, 20% and 30°/o respectively. Further, 3rd PRC has recommended certain changes in Grade Ceilings of PRP for Executives and discontinuation of forced rating of 10% executives as below par/poor performers.

(ii) Recommendation: The recommendations of 3rd PRC regarding PRP may be accepted.

10. Superannuation Benefits

(i) Secretary, DPE stated that 3rd PRC had recommended no change regarding superannuation benefits (i.e. PF, gratuity, post-retirement medical benefits and pension) for which the present ceiling of 30% of Basic Pay + DA had been retained. However, ceiling for gratuity has been raised to Rs. 20 lakh from the present Rs. 10 lakh with partial linkage to DA in line with that for Central Government employees. Further, it has been recommended that funding of gratuity beyond Rs. 10 lakh should be kept outside the ceiling of 30% of Basic Pay + DA. Additional Secretary, D/o Expenditure stated that the recommendation regarding funding of gratuity may be reexamined because gratuity per se is part of existing ceiling being a retirement benefit and hence it may not be appropriate to create two segments for gratuity. Moreover, there is no specific reason given for this recommendation by the 3rd PRC.

(ii) Recommendation: The recommendations of 3rd PRC regarding superannuation benefits may be accepted with the modification that funding for the entire amount of gratuity may be met from within the ceiling of 30% of Basic Pay DA.

11. Corpus for Medical and other emergency needs

(i) Secretary, DPE informed that 3“ PRC had recommended that the ceiling for contribution to the corpus for post-retirement medical benefits and other emergency needs for retirees may be enhanced from 1.5°/o of PBT to 3% of PBT. Further, coverage from the corpus may be extended to all retirees instead of the present provision for only pre 1.1.2007 retirees. CoS was of the view that the present ceiling of 1.5% of PBT is sufficient for covering the pre 1.1.2007 retirees. As regards remaining employees, provision for post-retirement medical benefit already exists as part of the stipulated contribution of 30% of Basic Pay + DA for superannuation benefits.

(ii) Recommendation: The corpus for post-retirement medical benefits and other emergency needs may be provided for within the existing ceiling of 1.5% of PBT and it may apply only in respect of pre 1.1.2007 retirees. Formulation of suitable schemes in this regard by CPSEs may be ensured by the Administrative Ministries/Departments.

12. House Rent Allowance (HRA) and Leased Accommodation including House Rent Recovery (HRR)

(i) The recommendations of 3rd PRC regarding rates of HRA, HRR and leased accommodation etc. were discussed. Additional Secretary, D/o Expenditure apprised that the recommendations of 7th CPC on HRA for Central Government employees was under consideration and a final view was yet to be taken. CoS was of the view that decision of the Government on the recommendations of the 7th CPC on allowances may be awaited.

(ii) Recommendation: A decision on 3rd PRC’s recommendations regarding HRA, HRR, leased accommodation etc. may be taken by DPE in consultation with Mo Finance along the lines of provisions for Central Government employees after a decision is taken by Government on HRA for Central Government employees. Till then, the existing allowances at the existing rates may continue to be paid at pre-revised pay scales.

13. Deputation, Employee Stock Ownership Plan (ESOP) VRSNSS and healthcare of employees.

(i) Secretary, DPE stated that 3rd PRC has recommended that deputation of employees from one CPSE to another may be allowed in which case the employee would be entitled to pay and allowances as applicable in the parent CPSE. In addition, deputation allowance would also be payable. Further, the same provision would also apply to government officials on deputation to CPSEs, i.e. they would be entitled to pay and allowances as applicable in their parent cadre together with deputation allowance. She further informed that as per extant guidelines, government officers could join posts in CPSEs only on immediate absorption basis except in certain posts. This policy also applies to employees of one CPSE joining other CPSEs regardless of the level of post involved. The executives, who are brought into holding companies from subsidiaries or vice versa on deputation/transfer, will continue to draw their basic pay as drawn in the original company. They will, however, be entitled to draw the allowances and variable pay/performance related pay as applicable to the borrowing CPSE. Secretary, DoPT was of the view that deputationists should have the option to choose between pay of parent cadre plus deputation allowance or pay of the ex-cadre post. Further, the deputationists should get the allowances and other non-pay benefits according to the rules of the borrowing organization.

(ii) Secretary, DPE apprised that the 3rd PRC had also made certain recommendations to improve the performance of CPSEs, inter alia, covering Employee Stock Ownership Plan (ESOP), VRSNSS, and healthcare of employees, etc. She stated that as regards ESOP, 3rd PRC had recommended that DPE may elaborate the mechanism in consultation with Government agencies concerned. This recommendation may be delinked from the processing of the other recommendations of 3rd PRC and may be examined separately. As regards VRSNSS, there are existing guidelines of DPE and recommendations of 3rd PRC on this issue would also need separate examination. Regarding modifications in respect of healthcare facilities for employees recommended by 3rd PRC, CoS observed that most of the CPSEs are already implementing various health schemes and therefore changes in this regard may not be necessary.

(iii) Recommendation: 3rd PRC’s recommendations on deputation of officers between CPSEs and of Government officers to CPSEs may not be accepted and the existing guidelines of DPE and DoPT in this regard may continue to apply. As regards recommendations on ESOP and VRSNSS, these may also be examined separately by DPE. Further, modifications recommended by 3rd PRC in respect of healthcare facilities for employees may not be accepted and present provisions may continue in this regard.

14. After detailed deliberations, it was recommended that:

i. 3rd PRC’s recommendations may be accepted except to the extent of modifications recommended in Paras 3 (ii), 6 (ii), 8 (iv), 10 (ii), 11 (ii), 12 (ii) and 13 (iii) above.

ii. The recommendations of 3rd PRC may be implemented from 01.01.2017 (except for allowances as discussed in Paras 8 and 12 above, decision on which will be taken after the Government decision on allowances under 7th CPC)


Source: IRTSA

COMMENTS

BLOGGER
Name

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System,32,News,136,NFIR,3,NFSG,17,Night Duty Allowance,19,Nivaran,1,NLM,1,No Demand Certificate,1,Nomination Forms,4,Non-functional Upgradation,16,Notice for Pensioners,32,NPA,11,NSC,6,NSSF,3,Nursing Allowance,10,Nursing Institutions,6,Nursing Staff,2,nutritious dietary allowance,2,obc,31,office procedure,10,office space,5,Office Timing,44,Official Directory,1,Official Language Cadre,5,Official Secret Act,1,Officiating Pay,3,One Rank One Pension,358,Online Survey,1,ordnance factory,70,OROP Order,33,OTA,17,Outsourcing,7,Overpayment,7,PAC Recommendation,1,PAINTING,2,PAN,15,Paramilitary Allowance,3,Parangat,2,Passport,17,Paternity Leave,3,Patient Care Allowance,11,pay,8,Pay Anomaly,42,Pay Fixation,151,Payroll,4,PCDA Order,66,Pension,568,Pension Adalat,16,Pension Disbursement,59,Pension Form,7,Pension Revision,209,Pensioner Grievances,59,Pensioner I-Card,11,Pensioner Portal,118,Pensioners associations,126,pensioners retired prior to 1.1.2006,150,Penury Grant,2,Permanently disabled children,15,person with disability,76,Personal Pay,4,Personal Staff to Minister,5,PF Scheme,3,PFRDA Bill 2011,20,pgportal,2,pharmacist,2,Physical Training Instructor,1,PIB,4,Piece work calculation,3,Piece work incentive,5,Piece Work Profit,2,Piece Work Rates,3,Piece Work System,3,PLB,40,Pledge,7,PLR Scheme,1,post office,154,PPF,13,PPF Scheme,8,PPO,52,Pragati,5,Pre-1996,5,Pre-2006,55,Pre-2016 Pensioners,50,pre-retirement counselling,17,Presenting Officer,1,Principal CAT,2,PRIS,20,probation,6,Project Dantak Bhutan,3,Promotions,121,Provisional Pension,7,public grievances,7,Public Provident Fund,8,punctuality,1,Qualification Pay,4,qualifying service,34,Railway Concession Form,3,Railway Servants (Pass) Rules,14,Railways,716,Railways Training Centre,6,Rajbhasha,34,Rajya Sabha QA,38,Rank Pay,22,Ration Money Allowance,5,RBI Circular,16,Re-employed ex-serviceman,52,Receipt Payment Rules,15,Recovery,10,Recruitment,161,Recruitment rules,158,Refreshment Rates,1,RELHS,7,Reply to 7th CPC,12,requisition to SSC,3,reservation,125,Reservist Pension,1,residency period,3,Resignation,7,Rest Allowance,1,Retired Employee,47,Retired officers as Consultant,13,Retirement Adviser,1,retirement age,79,Retirement Road Map,56,review of records,2,revised pay rules,61,Right to Information Act 2012,4,Right to Information Act 2017,2,Right to Public Service Act,1,Risk Allowance,18,roster,2,Rotational Transfer Policy,13,Rounding Off,2,RTI,69,RTI Call Centre,4,rti online certificate course,2,Rule 10,1,Rule 16(3),1,running staff,24,Safai Karamcharies,1,Sainik School,2,Salary Disbursement,22,Sankalp,27,Sanskriti Schools,3,SAS Examination,7,Saving Bank Allowance,2,sc,22,scholarship Scheme,4,Schools,8,Scientific and Technical Posts,12,Scouts-Guides,2,SCOVA,63,Self attestation,7,Self-certification,7,Senior Citizens,21,Seniority,17,Sensitive Posts,2,Service Book,14,Service Verification,6,Seventh Pay Commission,1407,Seventh Pay Commission Report,176,Sexual Harassment,25,Shramev Jayate,1,shunting duty allowance,2,Sitting Fee Allowance,2,small saving scheme,41,social Media,18,Sparrow,4,Special Allowance,5,Special Casual Leave,7,Special Disturbance Allowance,1,Special Duty Allowance,2,sports-person,32,SSC,11,st,18,Staff Benefit Fund,4,Staff Car Driver,6,Staff Selection Commission,1,Stagnation,6,State Govt Employees,2,Station Leave Permission,4,Stenographer,1,Stents,2,Stepping up of Pay,28,Stiching Charges,2,Stipend,9,Storekeeping Staff,2,Strike,222,Study Leave,6,Substitute Employee,1,summer vacation,2,Sumptuary Allowance,2,Superannuation,6,surplus employee,3,suspension,11,Swantah Sukhaya,2,Swavalamban,31,TA Rules,5,Tatkal Tickets,26,tax,2,Tax Free Bonds,1,TDS,35,TDS Rates,11,technical resignation,5,telephone facility,1,temporary employee,6,Terms and condition,1,Toll Free Number,1,Touring Officer Hostel,14,Trade Apprentices,10,train,118,Training Allowance,6,training policy,35,Transfer Policy,63,Transport Allowance,21,Travelling Allowance,36,tribal area allowance,2,Trip Allowance,2,Uniform Allowance,2,Unit Run Canteen,24,Upgradation of Post,47,UPSC,20,vacancies,28,Veteran Commission,2,Vigilance Clearance,11,Voluntary Retirement,21,Wages,13,Washing Allowance,5,whistle-blowers,7,Widowed Daughter,2,Women Employees,44,Yoga,7,Youth Hostel,3,Zila Saink Board,5,वेतन आयोग,171,
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Central Government Employee News and Tools: 3rd Pay Revision for revision of pay for executives and non-unionized supervisors in CPSEs: Approved except Allowances
3rd Pay Revision for revision of pay for executives and non-unionized supervisors in CPSEs: Approved except Allowances
Recommendations of 3rd Pay Revision Committee for revision of pay for executives and non-unionized supervisors in CPSEs: Approval by Government of India, Cabinet Secretariat vide No. 252/21112017-Cab. III dated 29th May, 2017
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Central Government Employee News and Tools
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