Wednesday, June 08, 2011

Govt plans to raise salary, retirement age of sick PSU head

Government is mulling increase in retirement age of head of a sick PSU to 60 years and bring his pay package at par with his peers in profit-making state firms, secretary in the Department of Public Enterprises Bhaskar Chatterjee has said.

At present, the retirement age of Chairman and Managing Director (CMD) of a sick public sector undertaking (PSU) is 58 and he gets salary as per the 1992 scale, whereas his counterparts in a healthy government-owned firm get pay and allowances revised in 2007 and retirement age of 60 years.

Salary of a CMD of a sick PSU is equivalent to that of a senior private secretary in the Central Government, sources said.

"Right now, we are perpetuating sickness... sickness all around," the DPE Secretary said, adding that for a turnaround strategy a lot depends on the CMD. "CMD is the only ray of hope, but he is also injected with sickness," Chatterjee said. The government is taking some positive steps, he said.

However,the new pay packets would be linked with the results. "It can't be that (heads of) sick units get better pay scales and then (they) do not come out of sickness," he said.

The initiatives are as per recommendations of the Board for Reconstruction of Public Sector Enterprises (BRPSE) which suggested that either the government or a parent company should bear the additional burden of salary, in case the sick PSU is not able to bear it.

Besides, the BRPSE recommended "an automatic and quick extension of incentives to the board level incumbent responsible for the turnaround, such as extension of tenure up to 65 years and lump sum amount up to Rs 10 lakh out of profits of the the revived PSU".

Of 249 sick PSUs, 45 were sick as on March, 2010, including Air India, Mahanagar Telephone Nigam , Bharat Sanchar Nigam and Fertilizer Corporation of India.