Last year Government has approved the pay revision for all central government employees which was applicable from 01.01.2016. However, the PSU pay revision implements after one year of central pay commission. The Executive, Non-Executive and Board level cadre of the Central Public Sector expecting the decent pay hike due to the 3rd PRC implementation from the 01.01.2017.
The Central Government authorized department, the DPE, has issued an official order no. W-02/0028/2017-DPE(WC)-GL-XIII/17 dated 03-08-2017 for the fitment benefits, revised pay scales for board-level & below board level executives, cafeteria allowance, House rent allowance, superannuation benefits, and performance-related pay etc after receiving the Committee of Secretaries decision on the 3rd PRC recommendations.
Revised Pay Scales From 01.01.2017
As there were 10 pay scales for the executives working in CPSEs. There will be no change in the number of pay bands, however, the revised range will be as follows
|3rd PRC Pay Scales for the PSUs Applicable from 01.01.2017|
|Grade||Existing Pay Scale||Recommended Pay Scale||Applicable Schedule of CPSE|
|E0||12,600-32,500||30,000-1,20,000||A, B, C, D|
|E7||43,200-66,000||1,00,000-2,60,000||A, B, C|
As all of the employees were thinking about the relaxation in the affordability criteria recommended by the 3rd Pay Revision Committee but going against the expectation it was decided to go with the Committee report. Means, it will be hard to get the benefit of Pay Revision for the employees of loss-making PSUs. The criteria are shown in the below table:
|3rd PRC Affordability Criteria for Pay revision implementation in PSUs|
|Additional financial impact of the full revised pay package as a % of average PBT of last 3 FYs||Fitment|
(% of BP+DA)
|Financial impact will be within 20% of average PBT of last 3 years||15%|
|More than 20% but upto 30% of average PBT of last 3 FYs||10%|
|More than 30% but upto 40% of average PBT of last 3 FYs||5%|
|More than 40% of average PBT of last 3 FYs||Nill|
The Central Public Sector Companies which were formed to execute any special policy of the government of India for the betterment of the people, such CPSEs have been given relaxations in the affordability criteria. The implementation of Pay revision benefit shall be subject to the approval of the respective Administrative Ministry or Department of the Public sector enterprise.
Also, there are many CPSEs which have not started the commercial activity, such CPSEs may get the benefit of 3rd PRC depending on the approval from the concerned ministry.
The Coal India & its subsidiaries will be considered as a single entity for determining the affordability.
Formula to Calculate the revised basic pay
You can use the below formula to get your revised basic pay from 01.01.2017.
|Basic Pay +|
(Personal Pay /
Special Pay not
to be included)
Allowance (IDA) as
applicable on 1.1.2017
|A + B + 15% of|
to the next
Say for an example X employee has the basic pay of 30000 as on 31.12.2016. So his revised basic pay from 01.01.2017 will be
Full Fitment (15)
=75727.5 OR 30000X2.52425
Hence your new basic pay will be 2.52425 times of basic pay on 31.12.2017.
10% Fitment Benefit
=72440 (On Rounding Off)
Hence in this case multiplication factor will be 2.4145 of pre-revised basic pay.
5% Fitment Benefit
=69150 (On Rounding Off)
In the case of 5% fitment, the multiplication factor will be 2.30475.
There may be a case when the revised basic pay, after the fitment, is less than the minimum of the revised pay scale, In such cases, the basic pay will be fixed at the minimum of the revised pay scale.
The Rate of Annual Increments
There is no change in the rate of annual & on promotion increments, both are kept at 3% of basic pay.
Dearness Allowances: The whole DA will be merged for the calculation of fitment benefit. The Dearness allowance rate will be set to Zero on 01.01.2017 and same will be revised on the quarterly basis.
House Rent Allowances
|3rd PRC HRA Rates from date of Presidential order of respective CPSE|
|City Class||House Rent Allowance Rate|
|X – Class||24% of Basic Pay|
|Y – Class||16% of Basic Pay|
|Z – Class||8% of Basic Pay|
As the Committee of secretaries had not taken any final decision on the Location-based hardship allowance, hence same may be notified by the Department of Public Enterprises after approval from the Government of India. In the meantime, same will be paid as per existing rates on pre-revised basic pay.
Perks & Allowances
The allowances will be paid as per the cafeteria approach and the ceiling for the same is 35%. The other infrastructure facilities like Hospital, School, College would be kept outside the ceiling of 35%.
There is no altercation with the superannuation benefit ceiling and the same will remain 30% of Basic pay & Dearness Allowances of the individual employee. The amount will be deposited in the Provident Fund (PF), Gratuity, Post Retirement Medical Benefit and Pension for Employees. The ceiling for the gratuity has been raised from 10lakhs to 20 lakhs and the same will be funded through superannuation benefits amount.
Performance Related Pay
There is a separate criterion for the individual as well as company performance for the calculation of Performance related pay. I am not going into the details. As the Committee of sectreteries had not taken any final decision on the Location based hardship allowance, hence same may be notified by the Department of Public Enterprises after approval from the Government of India..
|Performance Related Pay Criteria|
|Executive Grade||Current ceiling (% of Basic Pay)||New ceiling (% of Basic Pay)|
|E0 to E3||40||40|
|E4 to E5||50||50|
|CMD / MD (C&D)||150||125|
|CMD / MD (A&B)||200||150|
Final Pay revision order for Individual PSU
The Board of director of Individual CPSE will submit the proposal (based on the affordability criteria) to concerned department/ministry. The proposal will be reviewed by the finance wing of the ministry and thereafter pay revision or presidential directive will be issued for the PSU. Similarly, presidential directives would be issued by administrative department/ministry concerned based on the result of the review which is to be done after every 3 years subsequent to the implementation.
Like 2nd PRC, this time also Department of Public Enterprises has not clarified that if a CPSE provides 5% or 10% fitment to their executives, then the same PSU will go with revised pay scales or continue with the pre-revised scale.
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