Recommendations of 3rd Pay Revision Committee for
revision of pay for executives and non-unionized supervisors
in CPSEs
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
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
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'.
(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, 3rd 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)
Click here to view/Download Report of 3rd PRC of CPSE
Source:
IRTSA
