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
|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|
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:
|Additional financial impact of the full revised pay|
package as a % of average PBT of last 3 FYs
(% 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||Nil|
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 +|
(Personal Pay /
Special Pay not
to be included)
Allowance (IDA) as
applicable on 1.1.2017
[under the IDA pattern
linked to All India
Cumulative Price Index
(AICPI) 2001=100 series]
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 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%.
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 Grade||Current ceiling (% of Basic Pay)||Proposed ceiling (% of Basic Pay)|
|E0 to E3||40||40|
|E4 to E5||50||50|
|CMD / MD (C&D)||150||125|
|CMD / MD (C&D)||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 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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