The Government has approved the Ministry of Heavy Industry’s recommendation for
pay revision of the executives of the Central Public Enterprises. The Minister of Heavy
Industry and Public Enterprises, Shri Santosh Mohan Dev highlighted a few important aspects
of this pay revision at a press conference in New Delhi .
He said, “this was the best ever package given by any Central Government to the executives of CPSE. The entire exercise was based on the premise that the existing disparity between the salary of private sector and the salary of the public sector executives should be minimized as far as practicable. This will certainly lower the feeling of deprivation amongst the Central PSU executives and also arrest the attrition of employees who are migrating to private sectors.”
The Minister said this package has been finalized in the fastest possible mode. The 2nd
Pay Revision Committee was constituted in November, 2006 with Justice Rao as the
Chairman and Dr. Nitish Sen Gupta, Dr. Parakh and Shri Bhaskarudo as Members. The
Committee submitted its report on 30th May, 2008.
Shri Santosh Mohan Dev said that in this package, the ministry has taken care of not
only the salary structure but also the future growth, so that the executives are encouraged to
The salient feature of the decisions of the Government which have been taken today for pay revision of CPSE executives are as follows:-
There would be a single set of pay scales for below Board level executives with an
elongated span, which includes the Risk Pay at the minimum and maximum level
instead of 5 sets of scales of pay. The revised pay scales are being circulated to you
The Government has decided to give uniform fitment @ 30% of Basic Pay + DA as on
01.01.2007 to all executives, instead of graded fitment of 3% to 42%.
Government has decided to give running pay scales for Directors and CMDs
depending upon the schedule of the CPSE, by including Risk Pay at the maximum
instead of Fixed Pay, which was suggested by the Committee.
The existing categorization of CPSEs into 4 schedules will continue.
The Government has accepted the recommendations of the 2nd Pay Revision
Committee with regard to Dearness Allowance, House Rent Allowance, Leased
Accommodation, City Compensatory Allowance, other allowances/ perks, Variable
Pay/ Performance Related Pay, Performance Management System, Remuneration
Committee, Long Term Incentives, Cost to the Company, retirement age and
The benefit of one additional increment for every two increments would be provided to
mitigate the problem of junior and senior executive getting the same pay.
A uniform rate of annual increment as well as stagnation increment @ 3% of Basic
Pay in all CPSEs will be adopted.
The Government has even provided pay increase to the marginally profit making
CPSEs at the fitment of 10% or 20% of their existing pay + DA, depending upon the
affordability of concerned CPSE.
A big demand by CPSEs employees regarding raising the limit of gratuity has been
accepted by the Government and the ceiling of gratuity for the executives would now
stand increased to Rs. 10 lakhs. So far the said ceiling was Rs. 3.5 lakhs.
Appropriate compensation package in respect of non unionized supervisors would be
decided by the respective Board of Directors of CPSEs.
Expenditure on account of pay revision would be borne by the CPSEs, out of their
Even if there is any specific issue/problem of CPSEs employees, government has also
constituted Anomalies Committee to look into such issues.
The effective date of pay revision will be 01.01.2007.
REVISED SCALES OF PAY AT BOARD AND BELOW BOARD LEVELS IN CPSEs
*E7 only in CPSEs of Schedule A, B & C.
* E7 only in CPSEs of Schedule A,B & C.
*E8 only in CPSEs of Schedule A & B.
*E9 only in CPSEs of Schedule A.
REVISED PAY SCALES