No. W-08/0003/2017-DPE (WC) Government of India Ministry of Heavy Industries & Public Enterprises Department of Public Enterprises Public enterprises Bhawan Block No. 14, CGO Complex, Lodhi Road, New Delhi, Dated: 14” August, 2017 Te or indum Subject: Cabinet decision on implementation of the recommendations of 3° Pay Revision Committee (3° PRC) on pay revision of Executives and Non-Unionized Supervisors of Central Public Sector Enterprises (CPSEs) The undersigned is directed to inform that the Cabinet has approved the proposal of Pay Revision of Executive (Board level executives, below Board level executives) and Non-Unionized Supervisors of Central Public Sector Enterprises (CPSEs) w.e.f. 1.1.2017 in its meeting held on 19.07.2017. Accordingly, two OMs dated 3 August and 4" August, 2017 have been issued by this Department. In this regard, it is requested to give wide publicity of the decision taken by the Government as per the ‘brief enclosed (in English & Hindi). (Samsul Haque) Under Secretary Phone- 011-24360823 Encl: As above To 1. The Press Information Bureau for publicity on Television and National/ Regional/ Local Newspapers, Bulletin on AIR News/AIR FM/Private FM Radio Stations (small write-up for electronic media also enclosed) 2. To all Administrative Ministries concerned with CPSEs for disseminating through their respective social media accounts (Facebook & Twitter) 3. All the Ministries/ Departments of the Government of India and CPSEs for circulation of the ‘brie? 4. NIC for uploading on the website of Department of Public Enterprisesrief The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the pay revision of Executives and Non-Unionised Supervisors of Central Public Sector Enterprises (CPSEs) based on the recommendations of 3 Pay Revision Committee. The pay revision will come into effect from 1.1.2017, 2, AS against 23 months wait at the time of implementation of 2™ PRC recommendations, the 3" PRC recommendations are being implemented within about 7 months from the due date. 3. The 3rd PRC was headed by Justice Satish Chandra (Retd.) and its other members were Shri Jugal Mohapatra, Ex-lAS officer, Prof. Mano] Panda, Director, Institute of Economic Growth Delhi, Shri Shailendra Pal Singh, Ex-Director (HR), NTPC Ltd. and Secretary, Department of Public Enterprises (DPE). 4, Onthe basis of decisions taken by the Cabinet two OMs dated 3.8.2017 and 4.8.2017 have been issued by DPE for implementation of pay revision of Executives and Non- Unionised Supervisors of Central Public Sector Enterprises which inter-alia include the following: |) There is focus on affordability of a CPSE to implement the pay revision without its impact being detrimental to its financial sustainability. The additional financial impact in the year of implementing the revised pay package in a CPSE should not be more than 20% of the average Profit Before Tax (PBT) of the last 3 financial years preceding the year of implementation, ii) A uniform fitment benefit of 15% of Basic Pay (BP) plus Dearness Allowance (DA) in case the additional financial impact of the pay revision is within 20% of the average PBT of the last 3 financial years has been approved. Besides, part fitments of 10% & 5% for those CPSEs in which the additional financial impact of pay revision on the average PBT of last three financial years is likely to be more than 20%, has also been approved. Subsequent to the implementation, profitability of a CPSE would be reviewed after every 3 years. A uniform rate of 3% of BP will be applicable for both annual increment as well as promotion increment. Wv) The Board of Directors of CPSEs are empowered to decide on the perks and allowance admissible to the different categories of the executives, under the concept of ‘Cafeteria Approach’, subject to a ceiling of 35% of BP. v) The house rent allowance to the employees of CPSEs will be 24%, 16% and 8% for X-class City, Y-class City and Z-class city respectively. The rates of HRA will be revised to 27% 18% & 9% for X, Y and Z class cities respectively when IDA crosses 25% and further revised to 30% 20% and 10% when IDA crosses 50%.vi) vii) viii) ix) xi) xii) xii) —U The payment of work based hardship duty allowance upto 12% of Basic Pay shall be admissible for the period the executives / non-unionized supervisors has actually performed one of the following hardship duty:- a) For performing duty in Underground mines, and b) For performing duty at Offshore exploration site Regarding Performance Related Pay, the overall ceiling of 5% of the year’s profit from core business activities has been continued. The ratio of relevant year's profit to incremental profit for working out PRP has been however, revised to 65:35 as against 60:40 earlier. Besides, CPSE’s and individual performance, weightage will also be given to team’s performance while determining the PRP payable to an executive. The 3rd PRC's recommendation for discontinuation of “Bell curve” to the extent that the forced rating of 10% as below par /poor performer should not be made mandatory, has been accepted. The existing provisions regarding superannuation benefits have been retained and ‘as per which CPSEs can contribute upto 30% of BP plus DA towards Provident Fund (PF), Gratuity, Post-Superannuation Medical Benefits (PRMB) and Pension of their employees. The ceiling of gratuity of the executives and non-unionised supervisors of the CPSEs would be raised from Rs 10 lakhs to Rs 20 lakhs with effect from 01.01.2017 and the funding for the entire amount of Gratuity would be met from within the ceiling of 30% of BP plus DA. Beside, ceiling of gratuity shall increase by 25% whenever IDA rises by 50%. Further, the existing requirement of superannuation and of minimum of 15 years of service by a CPSE employee will not be mandatory for the pension, whereas Post-Retirement Medical Benefits will continue to be linked to requirement of superannuation and minimum of 15 years of continuous service (except for Board level Executives) The corpus for post-retirement medical benefits and other emergency needs for ‘the employees of CPSEs who have retired prior to 01.01.2007 would be created by contributing the existing celling of 1.5% of PBT, The formulation of suitable scheme in this regard by CPSEs has to be ensured by the administrative Ministries/Departments. The revision of scales of pay for Non-unionized Supervisory staff would be decided by the respective Board of Directors. ‘An Anomalies Committee consisting of Secretaries of Department of Public Enterprises (DPE), Department of Expenditure and Department of Personnel & Training has been constituted for a period of two years to look into further specific issues/problems that may arise in implementation of the Government's decision on 3" pay revision Committee's recommendations. The expenditure on account of pay revision is to be entirely borne by the CPSEs out of their earnings and no budgetary support will be provided. eneee‘Small write-up for electronic media The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the pay revision of Executives and Non-Unionised Supervisors of Central Public Sector Enterprises based on the recommendations of 3 Pay Revision Committee. The pay revision will come into effect from 01.01.2017. As against 23 months wait at the time of implementation of 2° PRC recommendations in 2008, the 3° PRC recommendations are being implemented within about 7 months from the due date i.e, 01.01.2017. . Affordability of a CPSE to implement the pay revision without its impact being detrimental to its financial sustainability will be an important criterion to effect the pay revision. A uniform fitment benefit of 15% of Basic Pay(BP) plus Dearness Allowance (DA) in case the additional financial impact of the pay revision is within 20% of the average PBT of the last 3 financial years has been approved. . Besides, part fitments of 10% & 5% for those CPSEs in which the additional financial impact of pay revision is likely to be more than 20% of average PBT of last three financial years has also been approved. Subsequent to the implementation, profitability of a CPSE would be reviewed after every 3 years. Other benefits like Perks & Allowances based on “cafeteria approach” upto 35% of BP and Superannuation Benefits upto 30% of BP+DA have been approved. The house rent allowance to the employees of CPSEs will be 24%, 16% and 8% for X- Class City, Y-class City and Z-class city respectively. 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