Friday, December 28, 2007

A 40% hike and retire at 62?

The government is considering an increase in the retirement age of government employees to 62 years from 60. The proposal, that would benefit a large number of central and state government employees, is being looked into by the Sixth Pay Commission.

Some senior bureaucrats have already given presentations to the commission, explaining how a hike in retirement age would help the government in postponing its pension liabilities by two years. If the proposal goes through, an announcement in this regard can be expected in the Budget, sources said.

A number of ministries had written to the department of personnel and training (DoPT) about increasing the retirement age for select categories. DoPT forwarded the proposals to the ministry of finance, which in turn asked the Sixth Pay Commission to look into it.

The commission asked top bureaucrats to make presentations. It is understood that some state governments are in support of increase in retirement age. If the Centre decides to go ahead with the proposal, various state governments will also have to follow suit.

The Sixth Pay Commission's recommendations are expected to result in a hike of about 40% in salaries of central government employees in various categories.

Sources said if the government decides to implement the Sixth Pay Commission's recommendations, the outgo on the pension would be substantially higher, putting pressure on the fiscal situation. Raising the age would, however, help the government in postponing this liability by two years.

The government had last raised the retirement age in 1998 to 60 from 58 years. In the current fiscal, the total outgo on account of pay and allowances for the government with an employee strength of over 3 lakh has been pegged at Rs 46,379 crore. - The Economic Times

Tuesday, December 25, 2007

CPM starts campaign : Asks Govt. to implement sixth pay commission

The CPM on Tuesday said it was closely watching the performance of the UPA government and will continue to guide the government to pursue policies keeping in mind the interest of common man.

The CPM has asked the government to implement sixth pay commission.

Speaking at a Jan Vikalp Rally organised by the state unit of CPM here on Tuesday, senior leader Sitaram Yechury said the party was forcing UPA government to adopt polices which are in the interest of the common people.

He said the CPM prevailed upon the Union government not to implement policies of retrenchment and privatisation.

Yechury claimed that UPA government can not function without the support of Left parties.

Criticising the BJP, Yechury described it as a communal party. He said BJP was dividing people on the basis of religion and caste for gaining political power.

Speaking on the occasion senior party leader Nilotapal Basu said farmers are facing great hardship because they are not getting remunerative prices of their produce.

He said majority of the farmers are under debt and hundreds of farmers had committed suicide. He said economic disparities have increased to a great extent due to the wrong economic policies of Congress and BJP government, adopted under pressure of World Trade Organisation.

Inderjeet Singh, State Secretary of CPM, said that the people of Haryana are facing heavy shortage of electricity.

Earlier workers of Ram Setu Raksha Manch opposed the rally of CPM. The police resorted to mild lathi charge in order to disperse them in which four workers received minor injuries.

The police took about 70 workers in custody and detained them at the local police station. Later they were released.

Sunday, December 23, 2007

Congress may be forced to announce sops

The Gujarat battle has come to an end with the congress in a pathetic condition. Everybody is looking forward towards the next lok sabha elections. Its quite obvious that the UPA - Left will not make a mistake by calling for an early election. The government is expected to announce more sops to satisfy the masses. And the sixth pay commission report may be one such medium. It can also be noted one of the agenda that the BJP fought on Gujarat is the development issue. If the congress also want to project its development achievements, the results of those has top be passed on to the sections on the society.

Logically thinking a beneficial report is expected from panel. There are talks that a pay hike of 40-45% can be expected. Also the government has indicated that it does want to retain efficient employees - of course through better packages. The report is expected to be out by March end.

Tuesday, December 18, 2007

BMS rally in Delhi for interim relief

More than 5,000, Bharatiya Mazdoor Sangh (BMS) workers representing railways, defence, postal, central secretariat, armed forces headquarters, IMD, audit and accounts, currency and coins, etc., under the banner of Government Employees National Federation (GENC) staged massive protest at the Parliament Street in New Delhi on December 11. They were demanding immediate interim relief and publication of the Sixth Pay Commission report with a grant of Rs 10,000 minimum wage per month, scrapping of new pension scheme, stopping of privatisation, lifting ban on recruitment, 100 per cent recruitment on compensate ground to the wards of affected government employees died in service and stopping of outsourcing. They said the recommendations of the Pay Commission should also equally be made applicable to the state government employees and the employees of autonomous bodies. The constitution of a new ministry was also demanded at the central level to look after the functioning and welfare of the employees.

Later, a delegation of the confederation led by the BMS president Shri Girish Awasthi submitted a memorandum to the Prime Minister Dr Manmohan Singh for grant of interim relief at 15 per cent of the basic pay plus DA subject to Rs 1,000 per month and early publication of the Pay Commission report with effect from January 1, 2006.

It was the sixth demonstration by the unions affiliated to the BMS since the beginning of this session of the Parliament. The first demonstration was staged on November 21 followed by subsequent demonstrations on November 27, 29, 30 and December 4. More than 8,000 workers attended the demonstration on December 4. The BMS general secretary Shri Udairao Patwardhan addressed most of these demonstrations and demanded scraping of the SEZ act and ban on the entry of big business giants in retail trade.

Addressing the demonstrators on December 11, Shri Girish Awasthi, set the deadline of April 2008 and said thereafter the BMS workers would gherao the Prime Minister and all the Ministers of the UPA government. He said despite lapse of more than one and a half years period neither the Pay Commission report has come nor the recommendations for grant of interim relief has been given by the Pay Commission.

The BMS national secretary, Shri Baijnath Rai strongly deplored the apathy of the UPA government towards the economically backward section of the society and the aam aadmi, who are facing difficult days due to unprecedented increase in prices of essential commodities. Shri D.M. Rao Dev, president of the GENC criticised the government for its anti-worker moves like investment of pension fund in private market and green signal to engagement of employees through outsourcing without any social security. The GENC general secretary, Shri P.S. Bisht warned the government that if it does not give up its anti-employees move, the confederation would launch a nationwide agitation.

The demonstrators were also addressed by the BPMS president, Shri Sanjay Safai; the BRMS general secretary, Shri Swayambhu Singh; BPEF general secretary, Shri Vidhyadhar Pathak; Currency and Coins Karmachari Mahasangh president, Shri B.K. Jaggi; the RRKS president, Shri Mahendra Jain and the BSKS general secretary, Shri Ramlubhaya Baba.

Monday, December 17, 2007

Gujarat over and now?

For the political parties, the show on the Gujarat battlefield is over and now it time to capture the hearts of the people before the parliment election which may happen in a short time. One of the main thing that the current government will lookforward is the sixth pay commission report which is going to effect 10 million central and state government employees, besides those in the defence services. And with early trend of the Gujarat going away from the congress, it is expected that the central government will leave no thought in providing better packages to the staff. This has been already told by Union Minister for Urban Development Ajay Maken. He told "The Sixth Pay Commission report will be good for the employees. We do not want efficient employees to leave government services to join the private sector,"

Sunday, December 16, 2007

Sixth Pay panel report will be good for employees: Union Minister Maken

The Centre on Sunday promised that the sixth pay commission report would be "good" for the employees as government is keen to provide comprehensive salary packages to attract quality human resource.

"The Sixth Pay Commission report will be good for the employees. We do not want efficient employees to leave government services to join the private sector," Union Minister for Urban Development (State) Ajay Maken said.

Maken said both Prime Minister Manmohan Singh and Finance Minister P Chidambaram want to provide "comprehensive and good salary packages" to employees as for good governance efficiency of the employees is paramount. He said the report would be ready by March 31 next year.

Friday, December 14, 2007

Sixth Pay Commission in Gujarat Election campaign

To exploit the dissatisfaction in a section of the government employees against the present administration, the Congress, in another advertisement, “reminded” them about the administration running as a “one-man show, treating the employees as slaves, misusing the government employees for useless programmes and functions for personal publicity, misappropriation of public funds,” and other “misbehaviour” of the Modi administration.

It promised “justice” and restoration of their “self-respect” and implementation of the recommendations of the Sixth Pay Commission at the earliest.

Friday, December 7, 2007

Now, working for a PSU means you can tell your boss off

Mumbai: Some days, Ashok Sinha spends up to four hours reviewing what employees think of him. In September, the chairman and managing director of Bharat Petroleum Corp. Ltd (BPCL) and senior managers took two weekends to review staff performance and decide on rewards and new roles.
Retaining talent: Executives of BPCL at a training session. Oil PSUs are trying to hold back employees with higher pay and promises of overseas travel, more training, growth opportunities and job rotations.
“If I don’t do this, I probably won’t have a team left,” says Sinha.
BPCL, the country’s second largest public sector refinery, has become proactive in applying new personnel management tools to engage employees. The firm is facing one of the highest attrition rates in the Indian oil industry, although officials declined to say how bad it’s gotten. “Let me just say it has doubled over the last two years,” says S.A. Narayanan, human resources director.
With the entire industry troubled by rising attrition rates among senior staff and specialists such as geo-scientists and refinery engineers, public sector oil companies are radically changing their human resources practices to retain people: increasing pay, adding new feedback mechanisms and enticing staff with the promise of overseas travel, more training and job rotations.
The oil public sector undertakings (PSUs) have been losing people not only to private sector exploration and refining companies such as Reliance Industries Ltd and Essar Oil Ltd, but also to foreign recruiters and global consulting firms. Narayanan, for example, pointed out that many of his non-technical staff have gone to consulting firms such as Ernst & Young.
A study by consulting firm Hewitt Associates, commissioned by PSU oil companies, found executives at PSUs typically earn 60-100% less than their private sector counterparts. For middle management, the average fixed pay of Rs9.44 lakh annually compared relatively favourably with the market median of Rs10.11 lakh. But for senior management, the average pay is Rs14.34 lakh, about 82% lower than that of the overall market. At the director level, the fixed pay is Rs17.87 lakh, 81% lower than the market rate, says the Hewitt study.
These numbers are despite revenue per employee at public sector oil companies rising significantly. Revenue per employee at the country’s largest oil exploration company, Oil and Natural Gas Corp. Ltd (ONGC), for instance, has gone up from Rs36.4 lakh in 1997-98 to Rs1.6 crore in 2005-06.
“Unless we hike salaries significantly from mid-management onwards, nothing will change and people will keep leaving us for better pay packs,” says A.K. Balyan, human resources director, ONGC.
ONGC is another company that has been hit by high levels of attrition. The company has lost more than 100 key personnel such as geo-scientists and technicians who work on oil rigs.
So, ONGC is revising its policy to recruit former employees. “We are taking back geo-scientists who left us or retired as consultants,” says Balyan. The re-recruitment process is expected to be complete by the end of the year. Around 60 former employees may rejoin the firm. Balyan says the pay packages are likely to be substantially higher as they will join as consultants.
Earlier this year, while making presentations to the Sixth Pay Commission, the body that reviews public sector salaries, state-owned oil companies made a strong case for not only higher pay but also incentives such as variable pay and stock options.
To improve efficiency and accountability of government employees, the Sixth Pay Commission has asked Indian Institute of Management, Ahmedabad, to conduct a study on performance-related pay in PSUs. The government is also said to be mulling a similar model for public sector banks, which may be asked to offer incentives in proportion to profits or revenue.
Besides pay, human resources managers say they are trying to promote growth opportunities at PSUs because of their size and scale.
“For instance, PSUs can offer exposure to the overseas markets where they operate, rotation across functions, management and leadership training, work-life balance with better work hours,” says Subash Masters, head of government services at Hewitt Associates.
The country’s biggest oil refiner, Indian Oil Corp. Ltd, says it isn’t too worried by attrition. Human resources director V.C. Aggrawal says the company lost 165 engineers and chartered accountants last year—about 1.5% of its staff.
“Many of these are people who leave in the first couple of years of employment, so there is no way to assess what they may have contributed to the company in any case,” he adds.
The key is to identify and nurture high performers, says Ajay Soni, business leader at Hewitt. “With the opening of the economy, private players would obviously look at competent people in PSUs.”
BPCL has embarked on what it calls a “360-degree” feedback from employees—feedback from supervisors, subordinates, peers, stakeholders—which empowers them to also evaluate seniors while hearing from the company what future possibilities might be. “The feedback gave an insight into what could be in store for me in the company,” says Raju Natekar, deputy general manager of finance at BPCL. “It also gave me tools which would help me move that direction.”

source : livemint`

Tuesday, December 4, 2007

The Finance Commission (FC) & the Sixth Pay Commission

Comparing the Finance Commission (FC) with the Pay Commission is a bit like comparing an accountant with a movie star. They’re just not in the same league. The Pay Commission hands out goodies by the bagful to a large and vocal section of the population. The Finance Commission, in contrast, does the more prosaic job of, among other things, picking up the pieces after the Pay Commission has done the damage!

Even so, when the appointment of the Thirteenth Finance Commission evokes so little interest, even among financial dailies, it can mean only two things. One, the mandate of the Commission, to determine the sharing of tax revenues between the Centre and the states and between states, is seen as a largely settled issue, now that we’ve had twelve FCs and the broad contours of the sharing process have been laid down.

Two, buoyant tax revenues, both at the Centre and the states have taken the edge off what has traditionally been a highly contentious issue. Add to this the preoccupation with other issues such as the possible fallout of the subprime crisis on capital flows, Nandigram, the nuclear deal and so on and it is no wonder esoteric fiscal issues involving ‘vertical’ equity (between Centre and states) and ‘horizontal equity’(between states) have been relegated to the backburner.

There is, of course, a third, admittedly facile, explanation. This is the Thirteenth Finance Commission and in one of those uncanny quirks of fate, was also notified on 13 November 2007; hence the silence! On a more serious vein, the Thirteenth Finance Commission has some notable firsts to its credit.

It is the first time in history that the chairman and all members, with the exception of B K Chaturvedi, a retired bureaucrat, are economists (though whether that is a plus is debatable). It is also the first time that we have a woman member, Indira Rajaraman, Professor Emeritus at the capital’s National Institute of Public Finance and Policy.

But if the Commission is not to go down as just another ‘formula tweaker’ it will have to do more. It will have to deliver on its ambitious terms of reference (TOR). Its task has been made more difficult by two developments that will inexorably shape the fisc during the five years commencing 2010 — one, the Sixth Pay Commission recommendations and two, the Goods and Services Tax (GST), slated to come into effect from April 2010.

The first, the Pay Commission report, is a ‘known unknown’, in the sense that though there is no doubt it will hit Centre and state finances hard, the precise impact is a little harder to work out. This is because its recommendations usually have a ripple effect and the full impact will be known only after a while. The second, GST, however, is an ‘unknown unknown’. It is far from clear if the country will be ready to implement GST from April 2010 (remember, it was almost two decades before VAT became a reality).

The impact of GST on central and state revenues is also unclear. Yes, we know now that GST will have a dual structure (where tax is levied by the Centre and the states) but the actual rates are yet to be decided; consensus is unlikely to be easy but the final model will need states’ approval.

Sunday, December 2, 2007

Antony reitrates persuance of better deal for defence personals

"The last Pay Commission has not done justice to the armed forces personnel. We are now trying to get a better deal from the Sixth Pay Commission," defence minister A.K. Antony who is visiting border areas of Sikkim told.

Asked about reports of alleged removal of a Buddha statute in the Tawang sector in Arunachal Pradesh, he said though such an incident indeed had taken place, there was no evidence that China had done it.

Friday, November 30, 2007

Heard on Street : Sixth pay commission report by Jan 1st week

        It is heard that the sixth pay commission will submit its report before January first week. The government wants to implement the recommendations before April. The recommendations of the commission is likely to be same as published here. There are also recommendations to retain professional talent. The government is also decided on increasing the retirement age. But this is not under the scope of the pay commission.

Sunday, November 25, 2007

Sixth pay commission should take into account inflation

Expressing the view that the present salaries of the Railway employees were not commensurate with inflation, the Southern Railway Mazdoor Union has sought interim relief.

In a release here, the Divisional secretary of the Union R.Kesavan said the Sixth Pay Commission should take into account inflation while formulating the recommendations.

"The railway employees should be paid on par with the other Public sector undertakings," he said.

The recommendations of the commission was likely to be released by April next, he said and demanded that they be implemented immediaetly,failing which they would be forced to resort to agitations, he said.

Saturday, November 24, 2007

Indian Railwaymen seeks four-fold increase in the emoluments

The National Federation of Indian Railwaymen (NFIR) will soon chalk out an action plan to achieve its primary demand of a four-fold increase in the emoluments of the estimated 14-lakh workforce by the proposed Sixth Pay Commission.

M. Raghavaiah, NFIR general secretary, was speaking to presspersons on Friday after addressing a meeting of employees in connection with the first-ever ‘secret ballot’ of recognised trade unions in the history of railways.

The elections will be held from November 26 to 28 in the 16 zones of the railways. Over 13.5 lakh employees will cast their votes. While the main contestants are NFIR and All-India Railwaymen Federation (AIFR), any union that gets 30 per cent of the votes will be declared as ‘recognised’.

Mr. Raghavaiah, who is also general secretary of SCR Employees’ Sangh, justified the demand saying a working day of a railway employee was uncomparable with any other job. “About 60 per cent of railway employees work in places that are far away from habitations and that do not have basic amenities, he said.

Friday, November 23, 2007

Retire at 62, counter pension liability

If implemented, the central government's proposal to hike the age of retirement of its employees from 60 to 62 will defer by two years its pension liabilities of around Rs 14,749 crore (Rs 147.49 billion), according to the Invest India Economic Foundation (IIEF).

At the same time, the salary burden on account of the 1,70,000 employees whose retirement will be deferred immediately by two years will be to the tune of Rs 9,784 crore (Rs 97.84 billion) for the two-year period.

This includes increments and indexation for future dearness allowance. The calculation, based on data from Invest India Market Solutions (the consulting practice of the IIEF), assumes an average monthly salary of Rs 21,800 under the forthcoming Sixth Pay Commission.

The central government had estimated 3,321,210 employees (excluding defence personnel) on its rolls in 2007, with the number projected to go up marginally to 3,329,682 in 2008.

According to the Budget estimate for the current fiscal, the total outgo on pay, allowances and travel expenses is Rs 46,379 crore (Rs 463.79 billion), around 11.60 per cent higher than in the last fiscal.

The hike in retirement age will be implemented for defence forces' personnel. State governments would also most likely follow suit.

Based on the Invest India Incomes and Savings Survey, 2007, it is estimated that around 5.3 per cent central government employees (170,000) are likely to retire over the next two years.

Kavim Bhatnagar, who is on deputation from the Madhya Pradesh government with the IIEF, says, "With the raising of the age by two years immediately and the increase in the level of salaries and pensions due to the forthcoming award of the Sixth Pay Commission, the central government will be able to defer the pension payout for this group and pay them enhanced salaries."

In making the calculations, he has assumed that the recommendations of the Sixth Pay Commission for central government employees will be implemented in fiscal 2007-08.

The savings for the central exchequer shall be on account of deferred gratuity, commutation, first pension and leave encashment on retirement for the 1,70,000 employees.

Since these payments are paid out of the Consolidated Fund of India, the burden shall be reflected in the Budget, while another payment for this category - General Provident Fund and Family Benefit Fund of the Group Insurance Scheme - is paid out of the Public Account.

The proposal to increase the retirement age is being given final touches in the Ministry of Personnel, prior to being brought to the Cabinet for approval.
Source : Rediff

Wednesday, November 21, 2007

Debate on for Unified Civil Service

There is no unanimity between different Group-A central services and associations representing the All India Service officers (IAS/IPS) on whether a Unified Civil Service will suit India better.

The Sixth Central Pay Commission had sought response from different services on the case for a unified civil service by merging all Central (both technical and non-technical) and All India Services and whether there should be two distinct streams, one embracing all technical services and another for non-technical services.

The Indian Revenue Service (Customs and Central Excise) and the Indian Information Service associations supported the idea of unified civil services.

The IRS (C&CE) in its memorandum submitted to the Sixth Pay Commission has said "The recommendations of the IRS (C&CE) is to request the Pay Commission to recommend to constitute a Unified Civil Services pool or an Integrated Management Pool, by empanelling officers from various participating Group 'A' services to fill up posts of Joint Secretaries and higher level posts in ministries/departments of the center. The Government could lay guidelines, uniform for all services and conduct a screening by the UPSC."

The Indian Information Service Group 'A' Officers' Association has responded saying "There is a case for unified civil service. All those who come through the common civil service examination conducted by UPSC, be merged to a single service. This is the first step to end disparity among services and render equal treatment to all the services."

The Indian Revenue Service (Income Tax) differs from the IRS (C&CE) on the issue.

The IRS (IT) Association has said "In the age of specialisation or super-specialisation, the case for a unified civil service would be difficult to support. In fact, it is more important to end the glaring inter-service disparity and monopoly of one service over senior positions irrespective of the suitability of officers of that service for the post."

The Indian Administrative and Civil Service (central) association has recommended saying "There cannot be a complete unified civil service system. in fact, such an attempt will blur the focus from the IAS."

Increasing retirement age to 62 : A thought on it

The move to increase the retirement age of government employees from 60 to 62 years, as reported in this newspaper yesterday, can be endorsed on many counts. The average Indian's life expectancy at birth has gone up to over 66 years for men and 71 years for women. The last decision to increase the retirement age of government employees, to 60 years, was taken in 1998, when life expectancy for the average Indian was 63 years. Another increase in the retirement age now, on grounds of improved life expectancy, is therefore quite logical. There is also a social reason for postponing the age of retirement: as youngsters study for more years, they are dependent on their parents for far longer than used to be the case. Many family budgets get strained today because the main breadwinner retires before the next generation is settled in life.
The global practice also argues in favour of an upward revision in the retirement age. Several developed and developing countries have raised the retirement age to between 62 and 65 years. While the reasons vary from country to country, one common theme is the experience factor, which needs no elaboration. There are financial advantages as well. An increase in the retirement age will reduce the impact of the annual pension pay-out liability for the government for at least the period by which the retirement age is raised. The benefit of the reduced impact will come as a big relief, as it did in 1998, because the government's decisions to increase the retirement age and implement a new pay package for employees will most likely be taken at the same time. In other words, if the retirement age is not increased and the Sixth Pay Commission's recommendations for a pay hike are implemented, the central exchequer will take a bigger hit. Politically, a decision to raise the retirement age may earn for the United Progressive Alliance (UPA) the goodwill of an estimated ten million employees in the central and state governments. The UPA's coalition partners are also likely to reap electoral dividends from this, as the country heads for general elections in 18 months.
While these are all valid arguments in support of an increase in the retirement age, the government needs to keep in mind the impact at the entry level, because if no one retires for two years, then new recruitment too is likely to take a hit. In other words, those already in harness benefit, while those hoping to start their working careers will face more frustration; so postponing retirement has costs as well. It could also make worse the career stagnation that is already a problem in many government departments and services —those on a time scale get their promotions but stay in the same job, thus taking away much of the value of a promotion. So while it is true that retaining those with experience can add value, problems get created down the line.
It could also be argued that making 62 the age of retirement is far from being the most urgent reform required in the government's personnel policies. There are far more urgent and important issues waiting for attention, like the introduction of variable pay based on performance, a system for weeding out the non-performers, improving the quality of new recruits, creating the right environment for lateral entry, and so on. Some of these have been tried out but scuttled in practice, others have not been addressed at all. Changing the retirement age, if done, should be introduced simultaneously with these other, more important changes.

Tuesday, November 20, 2007

Govt finalising proposal to raise the retirement age to 62

Ten million govt officials, besides defence personnel, to benefit.
In a move that will benefit over 10 million central and state government employees, besides those in the defence services, the ministry of personnel is finalising a proposal to raise the retirement age of central government officials from 60 to 62 years.
If approved by the Cabinet, this will be the second time in nine years that the retirement age will be raised.
"Those who support the proposal feel it should be implemented in order to retain the collective experience. But there are people who say more young people shuld be brought into government services. We are discussing the matter," minister of state for personnel Suresh Pachauri told Business Standard. He declined to specify when the proposal would come before the Cabinet.
In 1998, the retirement age was raised from 58 years to 60, principally as a means of easing pension payments caused by a hefty increase in government salaries on the lines of the Fifth Pay Commission recommendations.
The move is expected to be politically beneficial for the ruling United Progressive Alliance (UPA) since the government servants constitute a large vote bank.
General elections for India's Parliament are due in early 2009 but the critical state elections in Gujarat and Himachal Pradesh will be held in December.
The move also comes ahead of a significant increase in salaries expected with the recommendations of the Sixth Pay Commission earl y next year.
The official reason for raising the retirement age is India's increasing life expectancy, which has improved from 62.86 years in 2000 to 68.59 years in 2007. The retirement age of the government officials in most developed nations ranges between 62 and 65 years.
The move is likely to have a significant impact on government finances which are now tied to Parliamentary commitments on fiscal prudence.
According to the Budget estimate for the current fiscal year (2007-08), the outgo on pay, allowances and travel expenses, excluding defence services, is Rs 46,379 crore, around 11.60 per cent higher than in 2006-07.
The central government has 3,32,1210 employees (excluding defence personnel) on its rolls, the number projected to go up marginally to 3,32,9682 in 2008.
The current retirement benefit for a retiring officer at the secretary level is around Rs 25 lakh, which is paid in one go. In addition, the pension is equivalent to 50 per cent of the last basic pay.
The move is also likely to impact state finances since the state governments typically follow the Centre's lead on such personnel policies.
The state governments are estimated to have a total of around seven million employees.
A serving secretary in the union government, who supports the move, said a decision will ultimately depend on the fiscal impact. Another secretary was a little skeptical.
"Personally, I feel it would be a retrograde move as it will lead to stagnation in the government. I feel 60 is a good age to retire at," he said.
A defence services official pointed out that the key benefit would be that the government will be able to tide over the pension liabilities for two years, especially as they would go up due to the Sixth Pay Commission award.

Sunday, November 18, 2007

Top retired army man suggests pay hike

With the Sixth Pay Commission working on its recommendations, a top former army officer has made a strong case for a 'generous' pay hike to defence personnel saying their turbulent lifestyle, limited career prospects and possibility of loss of life or limb should be taken into account for the purpose.

Maintaining that the average number of army men killed annually in active operations was 415 'when no war is being waged', former Vice Chief of Army Staff Lt Gen Vijay Oberoi said almost 5,000 personnel were invalidated on medical grounds every year due to stringent physical standards.

Observing that Indian Army had heavy counter-insurgency and counter-terrorism commitments, he said the average length of service of soldiers in such operations amounted to 10.87 years, compared with those in Western nations where it is not more than one year.

"Even those who volunteer for additional duties in some western countries do so for a maximum of two to three years throughout their carrier," Oberoi said in an article in the forthcoming issue of premier journal 'Indian Defence Review'.

Opposing any comparison of army personnel with those from the police or administrative services as their service conditions were 'unique', he said this "resulted in equating a colonel having 18-20 years service with a Superintendent of Police or a Deputy Commissioner of a district".

Thursday, November 15, 2007

Scrap Fiscal Act Target to compensate revenue defict by Sixth Pay Commission implementation

The Planning Commission, in its 11th Plan (2007-12) draft, has urged
side-stepping the zero-revenue deficit aim by 2009 that is mandated by
the Fiscal Responsibility and Budget Management (FRBM) Act. The 11th
Plan draft document, which was recently approved by the full Planning
Commission, held that maintaining zero-revenue deficit will
substantially limit the government''s ability to fund flagship
schemes. Finance Minister P Chidambaram has made it clear that the
government is bound by the FRBM Act, 2003, which mandates it to cut
the revenue deficit by a minimum of 0.5 percentage points every year.
In 2006-07, the Centre''s revenue deficit stood at 2 per cent of the
gross domestic product. The government has to eliminate this by March
2009. A zero-revenue deficit can restrict expenditure on health and
education, which creates human capital.

Revenue deficit is the difference between revenue expenditure and
revenue receipts. The Prime Minister''s Economic Advisory Council, in
its economic outlook for 2007-08, has said the central government''s
revenue deficit is unlikely to be removed by 2008-09 because of the
forthcoming Sixth Pay Commission's report and other unforeseens.

Tuesday, November 13, 2007

Sixth Pay Commission will not recommend raising retirement age.

The Sixth Pay Commission for central government employees will not recommend raising the retirement age.

"No," finance minister P. Chidambaram said today when asked whether the age, now at 60 years, would be increased.

The minister, speaking at a conference of economic editors today, said the commission's report would be handed in by April. Former Supreme Court judge B.N. Srikrishna, who authored the report on the 1993 communal riots in Mumbai, is heading the pay commission.

The blow to hopes of a higher retirement age comes days after Planning Commission deputy chairman Montek Singh Ahluwalia argued against revision of salaries by the commission.

"There is no case for a pay increase now because erosion of income (because of inflation) is taken care of by indexation (dearness allowance)," Ahluwalia had said.

Earlier, the Eleventh Plan (2007-12) document had warned of problems for government finances if the pay hikes were not capped. "With the commission's impact looming, hard-won gains on the fiscal front could be jeopardised."
Source : The Telegraph

Monday, November 12, 2007

S&T and R&D to be liberalised ?

Planning Commission has admitted that India's investment in R&D remains far below the level required for a country aspiring to emerge as an economic and knowledge superpower.

The draft of 11th Plan,likely to be put for National Development Council's approval early next month, also stresses upon the promotion of basic research in science, engineering and medicine as a "critical input" for development.

"To promote basic science research in academic and research institutions, there is need of a well-defined focussed approach for building an infrastructure of equipment, facilities in colleges/universities/institutions," says the draft in its chapter 'Innovation and Technology'.

Mere investments, the plan panel asserts, would help only partially and there is also a need to increase the efficiency of the delivery system so that resources are made available to R&D groups much faster.

It has also called for a "mechanism" which would formulate and implement programmes and play a role in upgrading research infrastructure, besides attracting a new generation of students and faculty into the research system.

"Most of the institutions have aged collectively with a consequent decline of their research profile. Vigorous and attractive recruitment policies need to be introduced in the Indian science and technology (S&T) system," says the paper.

Post-liberalisation, the remuneration mismatch between state-supported R&D bodies and similar private or foreign institutions has made basic or applied research highly unattractive. For instance, as TOI reported on September 6, only one government agency, Isro (Indian Space Research Organisation), lost 392 scientists in last 36 months — an attrition rate of 11 per month.

The Plan document recognises the problem and calls for "flexibility in the salary support and start-up grant" as a means to attract good talent to basic research. The Sixth Pay Commission, expected to submit its report early next year, has also received petitions from various scientific bodies and ministries, calling for a substantial increase in the remuneration packages.

The panel has favoured a liberal opening up of the S&T and R&D systems that have mostly worked behind a wall of opaqueness since independence. "There is a need for improving inter-institutional linkages to quickly enhance scientific activities within the university system. Focus is also required on initiating programmes to promote establishment of technology-business incubators in universities, which support scientists to start commercial activities based on indigenous technologies developed at their institutions," says the paper.

According to the panel, such technology transfer can help in the implementation of ventures, especially those with low capital start-up. In support of the new partnerships, it has stressed the need for industries with active R&D divisions to recruit research students working in basic science areas related to new technology demands.

Friday, November 9, 2007

No reason to raise pay of govt employees: Panel

The Planning Commission sees no reason to increase the salary of government employees as it feels that wages are already linked to price rise.

"There is no case for pay increase (of government employees) because erosion of income is taken care of by indexation," panel's Deputy Chairman Montek Singh Ahluwalia told reporters after the end of the full plan panel meet.

"With the Sixth Pay Commission's impact looming large, hard-won gains (on fiscal front) could easily be jeopardised," according to the draft Eleventh Plan document approved by the the Commission.

Pointing out that the Pay Commissions were relevant earlier when a large portion of the salary was not indexed, Ahluwalia said the sixth pay panel would take into account the fiscal circumstances while making its recommendations, likely sometime in April next year.

The document further stressed it is imperative that utmost vigilance be maintained against any deterioration in the fiscal situation.

Tuesday, November 6, 2007

Retirement Age

There were rumors in same news papers the the retirement age to be increased to 62 as per the recommendations of the sixth pay  commission. This assumptions was made on the basis of extension of services of space and atomic energy chairmen. However it is learnt the commission does not wish to propose the change of retirement age from the existing 60. Also it is difficult to think that the the government will take a positive step von this ignoring the opposition from the left. However the retirement date will be unified to December 31st. That means an effective increment of of one year for those whose date of birth falls in January. Also the sixth pay commission is planning for an option of re-employment - to utilize the service of experienced professionals. But this will not be an detention of service, rather it will be like a contact.

Monday, November 5, 2007

Performance linked pay. What does it mean?

In his interview Hon'ble Justice Sri Krishna hinted about the performance linked incentives to the central government employees in the sixth pay commission recommendation. It is neither appropriate nor desirable to introduce such a thing. It will give chance to 'chamchagiri' and create a lot of heart burn. Earlier in one of the autonomous scientific organizations such a scheme called "Merit Promotion" was introduced but later withdrawn. Let us hope that the Commission will not provide any loopholes for the employers (superiors) to use more powers at their whims and fancies. The CRs itself is a waste and if we introduce another angle to it, it will create even more problems.

Saturday, November 3, 2007

Maharashtra to implement Sixth Pay Commission recommendations without much fuss and delay

It is good news for two million employees of the Maharashtra government as senior officials of the state government have indicated that the state will implement the recommendations of the Sixth Pay Commission without much fuss and delay. But, this means the state exchequer takes a hit of around Rs 4,000 crore to Rs 5,000 crore.
The confidence of senior state government officials arose from the booming economy and buoyancy in the tax revenues who had a horrid time while managing the state’s finances at the time of the implementation of the Fifth Pay Commission report.
Earlier this week by going on a one-day token strike, by both the Centre and state government employees, for implementation of the Sixth Pay Commission recommendations, unions have managed to bring the issue to the fore.
With the shadow of the mid-term poll looming large over the Centre, it is expected that the announcement of the acceptance of pay commission’s recommendations by the Centre will be done sooner than later.
However, the implementation of the Fifth pay commission broke the back literally of many state government’s finances and they had to divert funds from development projects for paying wages, salaries and pensions of government employees.
Speaking to Business Standard a senior official from chief minister’s office said, “After implementation of Fifth Pay Commission’s report, state finance had taken a massive hit as during the period between 1999 to 2003, we even had to cut our plan expenditure on various infrastructure and social sector projects.”
However, the state had to cut down on development projects to pay employees because revenues didn’t kept pace with the increase in expenditure on employees.
This primarily happened as economy was going through recession and tax collection was not showing any significant rise. However since 2003 economy has done the turn around and our tax revenues are soaring.
Revenues from stamp duty and registration alone have increased from around Rs.2,500 crore in 2003-04 to Rs 6,000 crore in 2006-07. This is despite reducing the stamp duty from average of 10 per cent to 5 per cent, he pointed out.
Besides, this we have also maintained tight leash on the expenditure side and reduced expenditure on non-planned heads from high of around 45 per cent in 2003-04 to around 38 per cent of the total budgetary outlay.
Maharashtra government did not have to do any off-budget borrowings since 2005-06.
So, we feel even if there is a burden of between Rs 4,000 crore to Rs 5,000 crore, the state will be able to absorb it provided the sixth pay commission recommendations are implemented from January 1, 2007 and not from January 1, 2006 as demanded by the employees union, he said.
It is always better that the state accepts the principle of implementing the pay commission’s recommendations to state government employees as well and follow it than face strikes, dharnas and morchas from each government department for an increase in the salaries and pensions and bring the administration to a grinding halt, he pointed out.

Thursday, November 1, 2007

Sixth Pay Commission : Does Govt have money for implementation?

The government of India is a big gainer from the surge in the Sensex. The gains are sufficiently large to take care of the potential impact on the exchequer of the recommendations of the Sixth Pay Commission. In conceptual, if not in practical terms, the government is sitting pretty.

The market capitalisation of 29 listed PSUs has soared from Rs 2,34,000 crore on June 1, 2004, shortly after the UPA government took over, to Rs 10,90,000 crore on October 24, 2007. The current value of the government’s shareholding in these PSUs works out to a colossal Rs 8,80,000 crore — enough to wipe out a quarter of the total public debt.

A mere 10% sale of its portfolio would fetch the government over Rs 88,000 crore. That is around 2% of GDP, more than adequate to cover the immediate impact of the Sixth Pay Commission on GDP, which is expected to be of the order of 1% of GDP. It is the impact of any wage award in the initial two or three years that is lethal. Over time, as nominal GDP rises at around 13%-14% annually, the impact declines progressively as a proportion of GDP.

The government has stakes in banks as well. The market capitalisation of public sector banks (PSBs) has shot up in the same period from Rs 69,000 crore to Rs 232,000 crore. Government shareholding in these PSBs is today worth Rs 145,000 crore. (Some of the PSBs have been listed post 2004, hence do not figure in the comparison in market capitalisation between 2004 and 2007).

The fiscal deficit of both the Centre and the states has been showing a downward trend. Total public debt too has begun to decline. These declines understate the extent of the improvement.

If the fiscal deficit is interpreted as a change in net worth of government, the rise in the value of government shareholding in public sector companies also implies a decline in the fiscal deficit. Take this into account and the Sixth Pay Commission loses much of its terrors.

Some will say that this is all notional. The Left will not allow disinvestment in PSUs to proceed. The government cannot, under the present statutes, sell its equity in PSBs. Maybe there is an improvement in conceptual terms but this will not be reflected in cash flows.

Tuesday, October 30, 2007

Opinion : Money for nothing?

The Sixth Pay Commission will raise government salaries. What about cutting the flab?

The Prime Minister was critical of the pay packages of corporate honchos some time ago and a debate on the subject was ignited.

Now there is news that the Sixth Pay Commission has something to say about pay structures in the government sector, with the thrust being unidirectional.

Quite naturally there is umbrage, given the mindset about the functioning of the public sector.

The main objective of a Pay Commission, broadly defined, is to revise the pay structure of government employees with every decade; and the justification, among other factors, is to establish some kind of parity with the private sector.

The impact of the past Pay Commissions has been manifold — they have reduced the incentive for the better candidates interested in joining the bureaucracy, made lower level government staff far better paid than their private sector counterparts, with no accountability, and put the central and state government finances in jeopardy.

The Fifth Pay Commission, which was implemented in 1997, recommended an increase in the total benefits for central government employees, which automatically translates into higher packages for state-level employees.

When salaries go up across the board, the first victim is the fiscal deficit, as expenditure goes up with no corresponding increase in revenue.

In the private sector, pay hikes are related to profit and performance, but when it comes to the government — since there are no profits and the performance system is cloudy — there is no way to quantify the net gain.

To reduce this burden, the Fifth Commission had sought to reduce the total size of the bureaucracy by 30 per cent over a ten-year period and to abolish all unfilled positions, numbering about 350,000, in 1996.

Monday, October 29, 2007

Pensioners dharna on negative attitude of the Sixth Pay Commission

All-India Organisation of Pensioners (Civil and Military) will organise a dharna and demonstration in front of the Central Government Health Services (CGHS) Office at Kesavadasapuram from 10.30 a.m. to 12.30 p.m. on October 30 in protest against the alleged negative attitude of the Sixth Pay Commission and the Central Government.

The demands of the organisation included sanction of an amount of Rs 1,000 as interim relief to the pensioners per month and steps to improve the functioning of the CGHS Office, the organisation said in a statement here on Saturday.

Thursday, October 25, 2007

Examining the Feasibility of Performance Related Pay (PRP) in Government

The studies made by Sixth Central Pay Commission.

Pay and allowances in the Government are linked to service-incremental salary scales and promotions under different service rules. Promotions have been used as a tool to provide incentive especially at senior management levels. Pay increases are based on annual increments and the salaries depend more on length of service and grades rather than the performance of an individual employee.

The aim of the study is to examine the feasibility of working out a model whereby a base salary is attached to each post based on the conventional criterion of skills and responsibility; simultaneously, a second component is introduced that is payable as a percentage of the salary on the basis of productivity and the performance of the employees, either individually or as a group.

Terms of reference: The study should examine the correct basis of pay increases and their relation, if any, to performance and productivity of the employees; and examine possibilities of evolving a direct correlation between PRP and delivery of services to citizens/organization/other departments, as the case may be.
The study should evolve measurable, quantifiable criteria for judging performance and productivity of different grades of employees in various government organizations* depending on the nature of their work and the relationship with their users/clients.

The study should, inter alia, examine international best practices in this regard.

The study should develop a model suited to Indian conditions which is transparent, measurable, fosters accountability and is linked to deliverables.

The study should devise means by which PRP can be introduced in the Government. Specifically it should consider the following:

Should PRP be applied to all jobs and all sectors, or higher managerial positions /percentage of jobs or sectors to begin with.

Should PRP be individual based or group based.

Should specific percentages be prescribed for restricting number of posts to which PRP is given.

Team Leader Contact Details:
Prof. Biju Varkkey
Indian Institute of Management Vastrapur, Ahmedabad, 380015
Tel. 079-26324874

The conceptual frame work includes the following:
Identification of metrics for five measures of performance viz.
(i) Competency/ skill
(ii) Effort /activity
(iii) Result/ output/ value added measures
(iv) Efficiency/ productivity, and
(v) Quality/ customer satisfaction.

Suggesting Modified Pay structure having flexibility to implement PRP viz. Pay structure having fixed and variable components with variable component linked to performance measures.

Suggest enabling conditions for PRP.

The Ministries/ cluster of Ministries selected are:
Cluster I
Ministry of Health & Family Welfare (D/o Health & Family Welfare)
Ministry of Urban Development (D/o UD & A)

Cluster II
Ministry of Corporate Affairs
Ministry of Finance (D/o Revenue, Central Board of Direct Taxes and Central Board of Excise and Customs)

Cluster III
Ministry of Science & Technology (D/o Science & Technology)
Ministry of Communication & Information Technology (D/O Telecommunications-Posts)

Ministry of Defence (D/O Defence and Ordnance Factories)

Ministry of Home Affairs (D/O Home Affairs)

Ministry of Railways

Tuesday, October 23, 2007

Sixth pay commission : The new rumors

Here are some talks hear on street on sixth pay commission. These are only rumors and not heard from any reliable sources.

  • The commission is to submit report by January 2008
  • Provision for extending service of professionals
  • Technical employees retirement age may increase to 65 from 60.
  • Deputation between Government and Private Sector can be possible.
  • Performance based incentives (not pay) to be introduced.

This topic is meant and open for discussion and you are welcome to post any such talks in the comments.

Monday, October 22, 2007

New Pay Scale Calculator as per sixth pay commission

Find the excel sheet for New Pay Scales / Arrears as per the sixth pay commission Here

Sunday, October 21, 2007

Election on the horizon. What does it mean?

With the stand off between the UPA and the Left continuing, the political parties have begun the preparations for the elections to the parliament. The question is how the situation help employees. In general the elections are not in national interest. It will cost a lot to the exchequer.

But the election mean a lot of hope to the government employees who are expecting the sixth pay commission report. In India, an impending election is nearly always a trigger for populist fiscal spending. And considering the huge size of employees - 3.3 million and their dependents, its not easy to ignore the demands made by them.

"Early elections could even prompt announcement of some recommendations ahead of schedule," JP Morgan economists wrote in a note last week on sixth pay commission.

Party sources have already said the government had instructed the Sixth Pay Commission to expedite the process of finalising increased salaries and allowances for the 3.3 million central government employees by December.The announcement was originally to be made by April next year. And it is expected the government will to woo the voters.

The center has already started rolling out the sops. The limits for the bonus eligibility has been raised. Those with salaries up to Rs 10,000 will be eligible for bonus, as will countless construction workers who do not have the right to such payouts. The cabinet on October 1 cleared amendments to the Payment of Bonus Act, 1965, to bring more workers into the bonus fold, extending the law to a part of the unorganised sector by including those involved in construction.

Thursday, October 18, 2007

Sixth Pay Commission Report in December?

Due to the prevailing political uncertainty the central government is poised to unveil a string of welfare measures which some Congress sources say may be a way of preparing for elections despite announcements to the contrary.

Party sources said the government had instructed the Sixth Pay Commission to expedite the process of finalising increased salaries and allowances for the 3.3 million central government employees by December.

The announcement was originally to be made by April next year.

Due to elections preparation, central government may give better rocommendations and want earlier report of sixth pay comission.

Employee may get increase of 100-150 % increase in their basic pay that may result in arround 35% increase in total salary.
And so that lowest Group - D , employee's salary crosses 10000 Rs. monthly
And highest beuracrate cabinet secratary's salary reaches rupees 100000 ( one lack) monthly.

Secrataries may get double salary.
Child education allowance may increase.
HRA may get increase from 30 to 45 %.
Pay scales may cut down to 19 from 38.
Retirement age may increase to 62 from 60.
Technical employees retirement age may increase to 65 from 60.
Deputation between Government and Private Sector can be possible.
Government holidays/leaves may cut down.
Working days can be 6 day a week from 5 day week job.

Central, state govt employees to strike work on Oct 30

Central and state government employees will go on a nation-wide strike on October 30 in support of their charter of demands.

The strike call has been given by the Confederation of Central and State Government Employees Associations and more than one crore employees would be on strike, organising secretary of the Confederation M Durai Pandian said.

The government should pay an interim relief of Rs 1,000 per month to each and every central government employee pending submission of the Sixth Pay Commission report, Pandian told reporters here today.

The relief should be available retrospectively from January 1, 2006, he added.

Staff and employees coming under the categories of 'B', 'C' and 'D' in both the Central and State administrations would observe the strike.

The strike is also aimed at persuading the Centre to raise the interest rate for the General Provident Fund and small savings and restoration of status quo ante without delay.

The trend of outsourcing government jobs involving contractual systems, downsizing departments and ban on creation of new posts were some of the 'disturbing features of the Centre's policy' and the strike would resist this.

Employees should be granted right to strike and trade union rights should be available as statutorily recognised privileges, Pandian said.

A prior notice of the strike had already been serviced on the government, he said adding, Central and state government pensioners had extended support to the call.

Wednesday, October 17, 2007

6th pay panel set to outdo 5th

An article that came in Business Standard
Some grades could be merged, likely pay figures after 6th Pay Commission are assumptions.
The Sixth Pay Commission is likely to significantly raise basic salaries for an estimated 4.5 million central government employees.
The recommendations are expected to be submitted in January, a few months ahead of schedule, and the award is likely to come into effect from January 2006.
If salaries are revised to this extent, a central government secretary could see his or her salary go up to around Rs 75,000 – exclusive of other allowances and perks, approximately 36 per cent of current total salary.

(GoI & equivalent 
5th Pay
2004 revision 
(50% hike) and 

DA at 41 % 
from 6th Pay
Secretary 26000 fixed 54990 75000
Addl secretary 22400-24500 47376-51817 64512-70500
Joint secretary 18400-22400 38916-47376 52992-64512
Super time scale 12000-18300 25380-38704 34560-52704
@ Employees also get City Compensatory Allowance, Transport Allowance, or transport. HRA is at 40 % of basic pay
@ Some grades could be merged, likely pay figures after 6th Pay Commission are assumptions
* This could be the fixation as on 1 Jan 2006, DA installments due after this date (twice a year) will be in addition and calculated as a % of this basic pay.

The Fifth Pay Commission had raised salaries by around 30 per cent from January 1996 in line with previous awards. However, this was not commensurate with private sector salary increases.
In 2004, the government raised the basic salary by 50 per cent, but the key pay scales remained unchanged.
An additional dearness allowance of 41 per cent is given on this revised basic pay.
Sources said the house rent allowance could also be increased. However, the Commission may cap the rent in grade A-plus cities – Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad.
Sources added that along with pay increases, certain designations at lower levels of the government hierarchy may also be changed to make them more market-oriented.
It is not yet known whether the January report would be the final award or an “interim relief”, which is one of the Commission’s terms of reference. A government official in the know said there would not be an interim report.
When contacted, a Commission official said, “We are not seeking an extension. We will submit it on schedule.”
The Sixth Pay Commission, headed by Justice B N Srikrishna, was constituted last October.
The official added a final decision had not yet been taken on making the award effective from January 2006.
The Sixth Pay Commission, headed by Justice B N Srikrishna, was constituted last October. It comprises Sushama Nath (member-secretary), Ravindra Dholakia and J S Mathur.
The Fifth Pay Commission, which submitted its report in January 1997, had resulted in the government’s salary and pension burden increasing from 1.6 per cent of GDP in 1996-97 to 2.3 per cent by 1999-2000. For states, employee compensation rose from 3.8 per cent to 4.7 per cent.

Tuesday, October 16, 2007

Unions play safe on new pay plan

Major unions such as the CPI(M)-affiliated CITU,  AITUC of the CPI, INTUC (Congress) and BMS (Sangh Pariwar) on Monday said they would react to the  Sixth Pay Commission’s recommendations only after getting “authentic” information.

There have been lot of report on media about the new pay scale

The BMS and CITU said they are not happy with the hike recommended for Class IV staff. CITU president and CPI(M) politburo member MK Pandhe  refused to comment before studying the recommendations, but said:  “If what media is saying is true, the Class IV staff has been given a raw deal.”

AITUC president Gurudas Dasgupta said: “Let there be a report from the panel. All the stories published in the newspapers are not correct.”

INTUC president Sanjiv Reddy denied that the recommendations have been finalised. He said the pay panel will announce the hike around December-January.

Monday, October 15, 2007

Nod from finance ministry key to pay scale reform

NEW DELHI:  The Sixth Pay Commission, chaired by former Supreme Court judge BN Srikrishna, who also carried out the inquiry into the 1993 Mumbai riots, was originally expected to submit its report in April next year. But sources indicate that the Commission is speeding up the work in the light of the uncertainties surrounding the longevity of the UPA government.

A crucial step in finalising the new pay structures for the central government employees, is the nod from the finance ministry for the proposals. The ministry has to study the proposals to see if they are financially viable, and come within a reasonable fiscal discipline for the government. And, most importantly, it has to assess if the further drain on the exchequer can be managed when similar revisions are carried out in states and public sector units.

This is particularly relevant in the context of the problems faced with the Fifth Pay Commission, whose recommendations were partially implemented in 1998. The commission had recommended the linking of government salary increases to reductions in the number of government employees. It had suggested a reduction in government strength by 30% in 10 years. Normally there is a 1.5% attrition annually because of retirement, deaths, etc.

Prof Suresh Tendulkar, member of the previous pay commission says, “We need to rationalise the departments. The Government needs to expand in some directions, while reduce in others.”

“We have to stop this “escalator promotions”. There is an overcrowding in IAS, especially at the joint secretary ranks,” says Tendulkar.

Sixth pay commission will have no bonanza for babus

An  article that came in Daily News and Analysis

NEW DELHI: For over four million government employees, including military personnel, the Sixth Pay Commission may not usher in a dramatic new era where salaries are more in tune with skyrocketing wages in the private sector.

DNA has procured details of the draft salary structure that is now under discussion between the commission and the finance ministry. These indicate that even at the top-most level — the Union cabinet secretary — the fixed salary will be just about Rs80,000 per month, up from Rs30,000 earlier.

As head of the Indian bureaucracy, the cabinet secretary notionally runs India’s largest corporation of almost 3.3 million people, excluding over a million men in military uniform. His proposed salary wouldn’t be a patch on CEO salaries in the corporate sector, where annual compensation packages run into crores of rupees for even medium-sized companies.

At the bottom of the totem pole, starting salaries for Class IV employees would rise from a basic of Rs2,550 to Rs6,500 — which is the new minimum pay for anybody working in government (see table of proposed pay structure, page 24). And the jump is not as high as it seems since the new basic salary would absorb the earlier dearness allowance (DA).

DNA has learnt that the commission, headed by retired Supreme Court judge BN Srikrishna, author of the report on the 1993 Mumbai communal riots, has been forced to water down its proposals after discussions with the finance ministry showed the financial burden may be too heavy for centre and states.

The last pay commission had called for increases in pay linked to a reduction in the size of the government. It had suggested a 30% cut in total government strength over 10 years, given an annual attrition rate of around 1.5%.  This has not happened.

“There has been no effort at downsizing the government. The recommendation that salary hikes be linked to a reduction in the number of employees was never accepted, and we are left with almost similar numbers,” says an official privy to the current pay commission’s proceedings.

Says Suresh Tendulkar, eminent economist and member of the last pay commission: “It is necessary to pay better salaries at higher levels. But to do that you have to reduce the number of posts in the higher ranks. Only then can you reduce the numbers below.”

Sunday, October 14, 2007

Sixth Pay Commission to recommend hire on contract

A report that came in Asian Age on 13th October 2007 on the 6th CPC

New Delhi, Oct.12: The Sixth Pay Commission headed by Justice B.N.Srikrishna (Retd) plans to recommend to the government that it hire bureaucrats in future on a contract basis in order to increase the efficiency of the administration.

The commission, whose recommendations are, however, not binding on the government, is expected to submit them formally by March or April next year.

Justice Srikrishna, when asked if he was advocating a "hire-and-fire" policy for senior government officials, said: "Why not? If you want to end the security of tenure, then such an alternative (contractual approach) needs to be examined. It is a logical corollary that needs to be looked at."

Justice Srikrishna said there was a "dire need" to develop "a sprit of competitiveness in governance in order to end the prevailing 'mai baap' attitude." In a no-holds-barred interview to this newspaper, he added: "We believe a bureaucrat's salary must be related to his performance. If he performs well, he must be rewarded; if not, he should be taken to task. As the Indian Navy says, 'Shape Up or Ship Out'. We are at present working out the parameters of how such a policy can be implemented."

The Pay Commission chairman said there was need for a complete overhaul of the entire administrative system. "We are studying the whole issue of the extent to which excessive security of tenure has affected government servants at all levels. The Administrative Reforms Commission has also looked into this at considerable length. When departmental action has to be taken against a bureaucrat, the matter will drag on interminably for years and years."

"The question to be asked is: why does a private company provide results, whereas this is not the case with the government? We keep talking about making India a superpower with growth rates exceeding nine percent. To bring this about, every aspect of the nation needs to gear up to achieve these results. We cannot have a BMW engine attached to a khattara gadi. I am an optimist. Yeh kyoon nahi ho sakta hai?" He said he was not suggesting that all government employees be hired on a contract basis: this was only for officials at a senior level. "I am not suggesting that all government jobs be made contractual. All I am emphasising is that jobs up to a certain level must remain contractual," Justice Srikrishna said. "This will help translate into more discipline, more conscientiousness and extreme accountability from government employees. The employee must be able to account for every rupee that the government spends. The public is fed up of government servants being paid more and more for non-performance," he said. Justice Srikrishna denied that government pay scales were going to be put at par with private sector salaries. He said: "Boys coming out of school are getting salaries of over Rs 1 lakh per month and more. We have to look into this whole issue to see how much parity we can achieve." He also denied that there were plans to give government secretaries annual pay packages of over Rs 1 crore and more. "I don't think too much credence should be given to rumours. All sections are demanding substantial increases in salaries." He said: "We have to keep in mind the financial implications of our recommendations. There is no point in our recommending an increase of Rs 50 when all that the finance ministry can afford is Rs 10."

Justice Srikrishna agreed that an increase in salaries at the Centre was bound to have a ripple effect on state governments as well. "The exact proportion (of the increase) would vary from state to state. But it must be remembered that our recommendations are not binding on the states, in fact they are not binding on the Central Government-it is within their discretion to accept or reject" he said.

If government employees have contract jobs, how will they be entitled to pension benefits? Justice Srikrishna said: "Persons on contract would be entitled to a higher compensation package and not pension for the contractual period. Those employes prior to 1.1.2004 would continue to get pensions, while those employes prior to 1.1.2004 would continue to get pensions, while those employes on or after 1.1.2004 would be governed by the New Pension Scheme".

Justice Srikrishna said he did not want the Sixth Pay Commission to become one more ritualistic exercise to dole out more money to government employees, particularly since a huge chunk of government revenues were being spent on salaries.

"It is regrettable that what is being spent is being inefficiently utilized. Leakages must be stopped at all cost. If the citizen gets every rupee's worth, then we are working towards having an ideal government," he said.

Saturday, October 13, 2007

Amar Ujala Report on sixth pay commission report

These days Newspaper across the country, publishing News item about Six Pay Commission and its recommendations. Speculative reports about how much increase in the pay of the Central Government Employees will be as well other allowances and other effects are being continuously published. After Deccan Herald and Malayala Manorama in Kerala, its now turn of the Hindi News Papers Amar Ujala and Rajasthan Patrika. Amar Ujala has published a special report yesterday and Rajathan Patrika has published article on the same line today. These News item in Hindi News Papers only confirm various information already in the circulation among employees. Some of the Fine prints of the reports are :
Retirement Age is going to be 62 years
Basic salary will be increased by 100-150%
Net effect will be 30-40% only
Lowest salary will be more than Rs.10000
Government has asked the commission to give its report early
Child Education allowance will be Rs.200-300
HRA increased by 15% i.e. 45%
Less Government Holidays
Six day week office working
Pay of Cabinet Secretary will be One Lac

Till final report comes, you will see more and more such News Items in various news paper.

Read Amar Ujala news article Amar ujala

Friday, October 12, 2007

Pay Commission Denies reports on "interim report"

The Pay Commission has denied the submission of any interim report to the Government on pay scales and other issues as has been reported by a section of the Press। The new pay scales has been posted on many of the regional News papers and transalted version posted in this blog ( The denial has come on 10th October, 2007. The denial has been posted in commission website.

Disclaimer : Reports have appeared in a section of the media that the Sixth Central Pay Commission has submitted interim reports and some newspapers have even published replacement scales supposedly recommended by the Commission. It is clarified that the Commission has not submitted any interim report or recommendations. It may be recalled that the Commission was notified on October 5, 2006 and is expected to give its report within the stipulated time of eighteen months.


Space, atomic energy department chiefs retirement age increased to 66

The union cabinet Thursday gave the go-ahead for a four-year extension in service to the chairman of the Space Commission, the Atomic Energy Commission, and the secretary, Department of Space and Atomic Energy, from the present age of 62 to 66.The cabinet would make the necessary amendment soon, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters.The extension is in the interest of the public and would ensure effective implementation of the plans and programmes of vital national importance in the field of space application and atomic energy, he said.The cabinet also approved rewarding scientists and engineers for excellence, enhancing their housing facilities, and giving them the necessary promotions as a means to encourage them.'The approved career attractions will benefit the Department of Space and Department of Atomic Energy to attract and thereafter retain scientists and engineers,' the cabinet said.

Thursday, October 11, 2007

Group ‘D’ staff to join nationwide strike

The Puducherry Government Group ‘D’ Employees (central) Association on Wednesday announced its decision to join the proposed nationwide strike called by the Central trade unions and the Confederation of Central Government Employees Union to highlight their demands.

Addressing reporters here, general secretary of the association G. Madhialagan said the association leaders would hand over the strike notice to the authorities on October 17 after staging a demonstration in front of the Chief Secretariat. The association demanded an interim relief of Rs. 1,000 pending recommendation of the Sixth Pay Commission, implementation of the earlier pension scheme and to stop appointment of private security guards in government departments. The association wanted the government to fill the posts of record keepers in various departments.

Babus want pvt sector salary with govt perks

An articlke that came in Business Standard

Officers of the elite Indian Administrative Service (IAS) want their pay scales to be determined on the basis of prevailing market rates, quite like what happens in the private sector.

However, they are not ready to give up the substantial perks they enjoy, like palatial bungalows in city centres, number of attendants, guards, drivers and other assorted facilities.

In its reply to a questionnaire from the Sixth Central Pay Commission, the Delhi-based Indian Administrative and Civil Service (Central) Association has said, “The basic pay of a Secretary to the Government of India should be such that he can afford to take at least one international private trip per year with his family and travel long distances within the country for social cause, without seeking any obligations or favours from any private or other agencies.”

The Commission is in the process of finalising its recommendations on pay hikes for central government employees. Its report is expected by March next year.

The association has held that higher salaries would keep the morale of IAS officers high and motivate them to perform their duty more diligently.

IAS officers are at the top of the government’s salary structure. Non-IAS officers take more time to reach similar levels of responsibility and are paid lesser in comparison.

However, babus are not ready for any cut in their perks or accept posts on a contract basis.

In response to the Commission question on whether it is possible to quantify other additional perks enjoyed by IAS officers, like security of tenure, promotional avenues, retirement packages and housing, the association said, “There is no need to compare the perks provided to a civil servant in view of the unique and complex nature of public service which is entirely different.”

Analysts, however, feel that IAS officers cannot have their cake and eat it too.

“Secretary-level officers get on a par or even more than a person with similar experience in the corporate sector, when one takes into account the additional perks they enjoy. At a prime location like Chanakyapuri in New Delhi, the rent of the bungalows they reside is not less than Rs 3-5 lakh per month,” said Amit Azad, head of operations and finances at HR consultancy Finesse PR.

However, Azad agreed that civil servants do not have the same savings (and investment) potential as compared to persons with equal experience in the private sector.

“Hence, they do not enjoy the same lifestyle when they retire,” he added.

The Sixth Pay Commission was constituted last year by the United Progressive Alliance government. It is chaired by Justice B N Srikrishna.

Tuesday, October 9, 2007

What kind of a pay raise can we expect out of the Sixth Pay Commission?

About 35 percent! The Deccan Herald report quotes "sources familiar with the draft recommendations," so this estimate is speculative. But it's also in line with our experience with the previous Pay Commission.

As per a draft recommendation prepared by the Pay Commission, gross salary increases which would be implemented with retrospective effect from January 1, 2006, would be in the range of 30 to 35 per cent of the existing salaries.

According to sources familiar with the draft recommendations already prepared by the Pay Commission, the basic salary of the Cabinet Secretary — the topmost civil servant of the Government of India — is proposed to be Rs 80,000 as against the existing basic pay of Rs 30,000.

Coming back to academic salaries, a fresh recruit at the Assistant Professor level can expect a gross salary (without house rent allowance) of about Rs. 35,000 from the current Rs. 25,000. Clearly, this sort of raise, while it does have its benefits (!), is nothing to write home about. Our premier institutions had better get cracking on some of the other things we talked about just a few days ago, if they want to remain (become ?) attractive destinations for top faculty talent.

Left opposes performance-linked salaries

Yet another idea mooted during the United Progressive Alliance government — to introduce performance-linked salaries for government employees — has raised the hackles of the Left-backed trade unions.
Reacting angrily, the unions said any move to this end would hurt the interests of employees at lower levels of the hierarchy.
“The proposal of performance-linked salary for a government employee is illegal, illegitimate and unconstitutional. Basic salary cannot be linked with performance. There can be a performance bonus, as prevalent in some industries, but that should not be a part of the salary,” said Gurudas Dasgupta, general secretary, All-India Trade Union Congress (AITUC), which is affiliated to the Communist Party of India (CPI).
However, even as the Left-supported trade unions expressed strong opposition, the Congress-linked Indian National Trade Union Congress (INTUC) supported the idea.
The Sixth Pay Commission is examining the feasibility of introducing performance-linked pay in the government.
The commission has constituted a study group headed by Indian Institute of Management-Ahmedabad Professor Biju Varkkey to develop a model that would link the pay package of central government employees to their performance. The commission’s award is expected by March next year.
The president of CPI(M) trade wing Centre of Indian Trade Unions, M K Pandhe, said the idea would not help government employees in the lower levels of the bureaucratic hierarchy.
“Performance-linked salary for government employees does not hold any meaning. This will be subject to high distortions, as the performance will be judged by the top officials who are always biased against lower grade employees. This is also against the minimum wage guaranteed by the Supreme Court. In the name of such a system, the government wants to give better pay packages to senior government officials. Salaries of government employees should be determined on the basis of the cost of minimum standard of living and capacity of the government to pay.”
However, G Sanjeeva Reddy of the Congress affiliated trade union, INTUC, cautiously welcomed the proposition.
“We support the proposal, provided that minimum wage is guaranteed for central government employees. However, this issue should be discussed with the central government employee associations and progress should be made on the basis of the consensus. Otherwise, it will lead to a lot of controversy because it has been proposed for the first time,” he said.
“This could be implemented for the middle- and top-level government employees,” Reddy added.
When asked whether senior government officials should be paid on a par with their counterparts in the private sector, Reddy said, “This is neither possible nor desirable as more than 26 per cent people in this country live below the poverty line. We cannot compare salaries of government employees with the private sector employees as the latter work only with profit motive whereas the government has to fulfil certain social obligations. However, nobody should be punished for working for the government. They should be paid proper salary with respect to their skill and responsibility.”

Monday, October 8, 2007

"Shape Up or Ship Out" - Will the Sixth Pay Commission have shocks for Indian 'Babus'?

From what the Chairman Justice B N Srikrishna has stated in an interview to Gfiles, the magazine, exclusively devoted to the 'Babus', it looks as if the Indian bureaucracy may have shocks when he submits the Sixth Pay Commission Report next April.

Justice B N Srikrishna, who is nationally known as the head of the Court of Inquiry of the Report on the 1992 Bombay riots, has told the Gfiles that his message to the Government of India civil servants is to "Shape Up or Ship Out". That would be his "Mantra" in preparing the Report.

He has the terms of reference to go by in preparing the Report: focus on 'good governance' which will seek to 'spruce up' to provide cutting edge administration. He hopes to rationalize existing pay structures and work out a pay package that will promote efficiency and productivity.

Please do not bank on automatic increase in scales. He is keen on "performance related incentives" that are over and above the pay. "All future growth should be attributable only to better end results with non performers being denied any growth. Shape up of ship out is our mantra".

Justice Srikrishna says that the government can "adopt a contractual approach for hiring of government employees for specific jobs at certain levels. He feels that the "spirit of competitiveness in the world of trade and commerce must be introduced in governance."

Will the Babus get the salaries that the private sector offers? He is keen to keep the financial implications of the recommendations in mind. He does not want to disturb the "comfort level" of the Finance Ministry, and says: "There is no point in recommending an increase of Rs 50 when all they can afford is Rs 10."

Justice Srikrishna also says that his job ends the day he submits his report. How the government puts the recommendations into action is "not any concern of mine", he says.

When asked about the kind of tactics used by his team, he said, "We believe performance should be incentivised."

"The approach of this commission is that most of the growth in emoluments should come in the form of performance-related incentives that are over and above the normal pay," he added.

"Any growth in the compensation should come on account of better productivity. All future growth should be attributable only to better end results with non-performers being denied any growth. We are at present working out the parameters on how such a policy can be implemented," he added.

When asked about is the Commission going to advocate a hire and fire policy for government employees, he said that the term of appointment of existing employee cannot be changed to their disadvantage, adding that "What the government can do is to adopt a contractual approach for specific jobs at certain levels."

The Commission, besides looking into the pay structure, allowances and other benefits of the Central staff, has also been directed to recommend new pay structures for personnel of the armed forces and officers and employees of regulatory bodies set up under Acts of Parliament.

When asked that most of exchequer money spent on paying salaries, he said, "The exact proportion varies from state to state. As per the information available with us, out of 20 states following the Central pay scales, 14 are in a comfortable fiscal position."Commenting on government pay scale vis-à-vis private sector salaries, Justice Srikrisna said that it would not be possible to match private-sector salaries.

"Boys are coming out of school are getting salaries of over Rs 1 lakh per month and more. We have to look into this whole issue to see how much parity we can achieve," he said.

When asked about if government employees have contractual jobs, then how will they receive pension benefits, he said that person on contract would be entitled to a higher compensation package and not to pension for the contractual periods.

"For employees appointed prior to January 1, 2004 will continue to get pension. Those recruited after this date is covered under the defined contributory pension scheme," said eminent jurist

Sunday, October 7, 2007

New Pay Scales recommended by Sixth Pay Commission

The new pay scales as provided in Malayala Manorama.
Please note that there may be some mistakes as the chart provided in the daily was not very clear


Old Scale

New Scale






Auxiliary Staff- Gr D










2750-70-3800-75-4400 (C)



Supporting Staff – C












5000-150-8000 C/B N/G



Supervisory Staff, B/NG


5500-175-9000 C/B N/G


6000-190-9800 C/B N/G




6500-200-9800 C/B N/G


6500-200-10500 C/B N/G


6500-200-10500 B GAZ




7450-225-11500 B G/NG & C








Asst. Officer B


9000 (Fixed)










































60000 (Fixed)





65000 (Fixed)





70000 (Fixed)

A Secy




25000 (Fixed)


75000 (Fixed)



30000 (Fixed)


80000 (Fixed)

C Secy