Public Sector Pay

Per Capita Emoluments of Public Sector Employee in Relation to increase in Average AICPI (1960 = 100)
Year Employee in lakh excluding casual and daily rated 7.01 15.04 18.39 Emoluments (Rupees in lakh) 415 1352 2619 Per capita emoluments (Rupees) 5920 8983 14239 Average AICPI

1971-72 1975-76 1980-81

192 313 401

1985-86
1990-91 2000-01 2007-08

21.54
22.19 17.40 15.70

5576
10912 38223 64306

25887
49179 219672 409609

620
951 2190 3030

Some Characteristics of wages in PSUs

Wages are not exploitative wages PSUs pay much higher wages than the minimum wages notified for similar jobs. At the lower end, public sector employees are about 1.5 times than that in the private sector. At the higher level, these are at least ten times lower The principle of equal pay for equal work is applied more rigorously in PSUs

 Wage differentials within an enterprise and across enterprises were compressed significantly. If the basic wage was fixed as price for labor/services rendered, the Fair wages Committee suggested that differentials in basic wages be based on criteria like the degree of skill, the strain of work, the experience involved, the mental and physical requirements, the hazards etc

 So far, linking wages to productivity had remained a far cry In 1994, DPE (Deptt. Of Public Enterprises), issued guidelines limiting the autonomy for decentralized bargaining and moving away from parity among the different central PSUs. The government allowed public enterprises to sign fresh wage agreements only if they could meet extra costs arising out of wage revisions from their own sources

Pay Scale
If a pay scale is given as: Rs. 10,000 - 470/612820-500/3-14320-560/7-18240....what does it mean? It means Initial offer Basic or Consolidated Salary @ 10,000 Annual Increments @ 470 X 6 years = 2820 Annual Increments @ 500 X 3 years = 1500 Annual Increments @ 560 X 7 years = 3920 TOTAL 8240 + 10,000= 18240

 20,000-500-21,500-700-23,600-900-26,300-1,000-29,300-1,20032,900-1400-37,100 Generally such type of pay scales is adopted by Govt. authorities. This pay scale indicates only the basic pay not the gross. To obtain gross pay, one has to add DA, ADA, other allowances etc.

From the above figures, starting basic pay of an employee is Rs.20, 000 and yearly increment is @ Rs.500/- till it reaches to Rs.21, 500/(i.e. for the initial 3 years) and then @ Rs.700/- till it reaches to Rs.23, 600/- and so on.
The same scale also indicates that an existing employee who has already completed 9 years in services, will get basic pay of Rs.26,300/- and increment @ Rs.1000/- till he reaches to the next slab.

Parity to Disparity
Parity with Government Scales Government employees have for long have been arguing for parity in wages and benefits with public sector employees. Successive pay commissions have skirted the issue. Public sector employees are also seeking parity with government employees in pay scales and dearness allowance, but not in other benefits. In other words, they want the best of both the worlds.

Wage costs not Critical to All PSUs

Wage costs as a percent of total costs can vary widely, from less than 2% to over 60% across industries. In petrochemicals, the range is between 2 and 7 percent and in Coal India, it is 60%. Within industries, too significant differences exist. In Coal India, the share of wages in total costs varies about 13% in Open cast mines to 60% in underground mining. This shows that wage costs are not equally critical for profitability. A 20% rise in pay in a petrochemical company may raise costs by 2% while in other industries it amay push the the costs up by 12%

Bonus and Incentive

Introduction of quarterly incentive schemes relating to the overall performance of the PSEs have been permitted by the government. The overall payment of incentive both to the unionized staff and executives on attainment of 100% capacity utilization is presently restricted to 12% of the standard wage/salary and 15% of the standard wage/salary if the enterprise performance has reached 105% capacity utilization