PSU Pay Revision in India - Public Sector Undertakings more Lucrative employment options
Upward pay revisions in the times of Global meltdown and with the top two economies of the world in Recession? Sounds too good to be true but that is what has happened in India.
.37 million executives of Public Sector Undertakings (PSUs) like SAIL, ONGC etc. have been raised in the run up to the National General Elections in India. Apart form these perks the most important factor that makes employment in these PSUs is the job security and perks like health benefits. Department of Public Enterprises (www.dep.nic.in) that provides overall guidance to PSUs and formulates policies pertaining to the role of PSUs in the Indian Economy. A wealth of infrmation can be had on the site about Indian Public Sector Enterprises.
In this era of downsizing the workforce even students form the Premier Management Institutes like IIMs also are looking at PSU as lucrative employment options to ride the rough times and have peaceful stable life for a while.
In effect government is just implement the recommendations of Jagannadha Rao committee's pay revision recommendations, but in these times it has made PSU a very lucrative career option.
Executives of central public sector units have been given pay hikes of 25 to 45 per cent in the middle of Assembly elections. The raise benefiting over 3.7 lakh executives will be implemented with retrospective effect from January 1, 2007.
Heads of central enterprises like SAIL and ONGC will see their basic salary go up from Rs 31,500 to Rs 1.25 lakh a month. The new package also offers employees’ stock options (Esops), variable pay and risk rewards.
The implementation will be linked to the performance of each PSU.
“This is the best-ever package given by any central government to the executives. The entire exercise was based on the premise that the existing disparity between the salaries in the private sector and the PSUs should be minimised as far as practicable,” said Santosh Mohan Dev, the Union minister for public enterprises.
Although the basic salary has gone up by an average 67 per cent, the increase in average gross emoluments ranges between 25 and 45 per cent because of adjustments with existing allowances. The gross pay increase is comparable with the package offered to central government employees earlier this year.
The PSU executives’ salary is being revised after a gap of 10 years. The wages of workers are revised by each PSU separately through negotiations with labour organisations.
Analysts said compared with blue-chip private sector salaries, the PSU pay was not much to write home about. “The difference in pay scale is higher at the top level, compared to the private sector, than at the lower level,” Sushma Errevelles of Talisman Management Services said.
However, given that several private companies are planning to tighten belts to cope with a feared downturn, the “safer” PSU jobs are now considered lucrative enough.
PSUs are expected to lineup at IIMs for summer placements this year and with the hike it may seem like a lucrative and stable option at least for the time being.
Nov. 17--AHMEDABAD, India -- After several days of strain and anxiety, first year students at IIMA have now taken a breather. The summer placements for the batch is still midway, yet most of the 230 students have already been placed.
This year, unlike earlier, a lot of public sector undertaking firms are expected to throng the campus for summer placements. As many as 15-20 PSU firms are expected to visit the campus for picking students for summer placements.
Indian PSUs : An initiation
Indian PSUs took root when Indian was still struggling with its socialist beginings and government believed that almost all the businesses had to be run by itself and it should offer the citizens of the country employment. It was also believed that public enterprise would be exploitative and hence was not liked and or promoted. To do business in India in the 1970's and 1980's very restrictive/ difficult and each private business would have to deal with various form of government control in the form of Licenses. It was also called the License Raj.
Post 1991 Indian Economy Opened up and private enterprise was encouraged and red tape in the form of licenses was cut down. This was done out of compulsion as an IMF fund of US$ 1.8 billion was exhausted and Indian Federal Government headed by Late Mr. P V Narsimha Rao (His Finance Minister was Dr. Manmohan Singh _ Current Indian PM) was served a notice: Open up or no more funding. What happened after most of the Public Enterprises were opened up and the red tap was cut is History.
Some of the PSUs were retained and cutting forward to 2006 and referring to the Times of India Report seventeen or 51% of the 33 Indian companies that figured in the Forbes list of 2000 corporate titans were PSUs. This says a lot about the constitution of Indian Corporate sector where the Government is still in business and does not still believe in the Dictum “ There is no business of the Government to be in Business”. Government owned enterprise are still performing and contributing to the rise of India as an economic superpower. The pros and cons of this can be discussed but that is a different arena.
NEW DELHI: Here's the global might of India's state-owned enterprises. Seventeen -- or over 51% -- of the 33 Indian companies that figured in
the Forbes 2000 list of Corporate Titans released on Friday, are government-owned firms.
India's largest integrated oil and gas
company ONGC led the Corporate India pack, followed by Reliance Industries and State Bank of India. However, in the global ranking, ONGC figured only in the 256th position while Reliance was placed 298th.
Ranked on four metrics of sales, profits, assets and market value
, CitiCorp was ranked the global leader, with General Electric, Bank of America, American International Group (AIG) and HSBC Group making the rest of Top Five Global Titans.
Among the Indian firms on the list, 36% of the firms -- or 12 out of 33 -- are from the banking sector, while five firms belonged to the oil and gas industry and three to the IT and software sector.