DPE 3rd PRC order for the Pay Revision in CPSEs from 01.01.2017

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 Central Public Sector Employees are waiting for the 3rd PRC report for the same is already out and Committee of Secretary & Cabinet had already approved the 3rd PRC recommendation with some modifications.

After these developments, Department of Public Enterprises which is nodal department for issuing guidelines for the PSU has released the 3rd PRC order No. W-02/0028/2017-DPE(WC)-GL-XIII/17 dated 03-08-2017 which will be applicable from 01 January 2017. Here are list the final decision taken by the Cabinet/Government of India.



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 number of pay bands, however, the revised range will be as follows

GradeExisting Pay ScaleRecommended Pay ScaleApplicable Schedule of CPSE
E012600-3250030000-120000A, B, C, D
E116400-4050040000-140000A, B, C, D
E220600-4650050000-160000A, B, C, D
E324900-5050060000-180000A, B, C, D
E429100-5450070000-200000A, B, C, D
E532900-5800080000-220000A, B, C, D
E636600-6200090000-240000A, B, C, D
E743200-66000100000-260000A, B, C
E851300-73000120000-280000A, B,
E962000-80000150000-300000A
Director75000-100000180000-340000A
CMD80000-125000200000-370000A
Director65000-75000160000-290000B
CMD75000-90000180000-320000B
Director51300-73000120000-280000C
CMD65000-75000160000-290000C
Director43200-66000100000-260000D
CMD51300-73000120000-280000D



DPE 3rd PRC order download pdf

Affordability Criteria

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 tabl:

Additional financial impact of the full revised pay
package as a % of average PBT of last 3 FYs
Fitment
benefit
(% of BP+DA)
Financial impact will be within 20% of average PBT of last 3 years15%
More than 20% but upto 30% of average PBT of last 3 FYs10%
More than 30% but upto 40% of average PBT of last 3 FYs5%
More than 40% of average PBT of last 3 FYsNil

The Government has extended relaxation in affordability criteria for the CPSEs who are formed to perform the regulatory functions. The implementation of Pay revision benefit shall be subject to the approval of Administrative Ministry or Department.

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.

The profitability of the CPSE will be reviewed after every 3 years, if the impact goes beyond 20% of PBT, it has to mitigate the Performance Related Pay and other allowances to reduce to financial impact.

Formula to Calculate the revised basic pay

You can use the below formula to get your revised basic pay from 01.01207.

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/-.

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)

=30000+30000X1.195+(30000+30000X1.195)X0.15

=65850+9877.5

=75727.5 OR 30000X2.52425

=75730

Hence your new basic pay will be 2.52425 times of basic pay on 31.12.2017.

10% Fitment Benefit

=30000+30000X1.195+(30000+30000X1.195)X0.10

=30000X2.4145

=72435

=72440 (On Rounding Off)

Hence in this case multiplication factor will be 2.4145 of pre-revised basic pay.

5% Fitment Benefit

=30000+30000X1.195+(30000+30000X1.195)X0.05

=30000X2.30475

=69142.5

=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 revised pay scale, In such cases, the basic pay will be fixed at the minimum of revised pay scale.


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

The decision on HRA, Location based Compensatory allowances, Work based hardship duty allowance not yet taken by the government so same may to notified later on. In the mean time, same will be paid as per existing rates on pre-revised basic pay.

Perks & Allowances

The allowances will be paid as per 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%.

Superannuation Benefits

The ceiling of superannuation benefit will remain (30% of Basic pay plus DA) same as decided by 2nd PRC. The amount will be deposited in 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 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. You can get the same in the 3rd pay revision order copy. The ceiling for the PRP (% of basic pay) is shown in the following table.

Executive GradeCurrent ceiling (% of Basic Pay)Proposed ceiling (% of Basic Pay)
E0 to E34040
E4 to E55050
E66060
E76070
E87080
E97090
Director (C&D)100100
Director (A&B)150125
CMD / MD (C&D)150125
CMD / MD (C&D)200150



DPE 3rd PRC order download pdf

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 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.

Final Comment

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.

Please share/submit your views in comment section.

19 Comments

  1. Sir, I came to know form a BSNL union website that HRA has been decreased from 30 to 24, 20 to 18 and 10 to 8 percentages. Is it even applicable for PSUs that can not implement 3rd PRC?

  2. Sir,i am working in fci,when implemented wage revision? if implemented how much fitment will come? My basic is 11130/- ,how much new basic will come after wage revision? It is eligible or not cafeteria benefits for non unionzed supervisor. Kindly do the needful above questions

    Thank u

    1. Cafeteria allowances depend on the profitability of Company. So check the profit of FCI. Your revised basic pay will be 28000 from 01.01.2017.

  3. What will be new revise pay for ioc employee grade A with basic pay 24900 does fitment factor of 15% is suitable as it is highest profit making psu…

  4. Sir what will be cafeteria allowance under 3rd prc..
    In committee report it is said that it will be maximum ceiling of 35% but revise when ida crosses 50% but there is nothing said about this increment

  5. Sir, what shall be the revised net salary of an employee in the existing pay scale of 24900-50500 considering he will be joining the company in September 2017.

    1. The revised pay band will be 60000-180000. So you will get minimum 60k plus DA, perks, performance related pay, HRA etc which may vary from a company to company.

  6. Sir for affordability which three year will be considered? .Impact due to workers salary will also be accumulated?…how will calculate current year impact due to revise pay?

      1. Sir
        Currently there is news regarding bsnl that it dont have money to pay salary of employees, and it will be closed in 3 months if 3rd prc is not applied.
        So is it wise to join bsnl for newly selected jto throgh GATE-2017 or should we find some another option for future.

        1. It won’t be closed this is all rumors. However, the 3rd PRC is not possible for at least next 3 years. So it would be better to get the job in a profit making PSU through GATE exam.

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