The coalition government of India is contemplating increasing the wages of top executives in the CPSEs by twofold. This is to ensure that their remunerations are in line with those of similar organizations in the private sector so as to encourage public enterprises to keep good human resources.
Aim for competitive salaries.
As reported by ET, the memorandum of the personnel and training department proposes an enhancement in the pay structure of the executives up to 100 percent in CPSEs.
At the moment, chiefs, especially in public sector organizations, earn less as compared to their counterparts in private sector organizations; thus, this causes brain drain in the country. This highlights a lacunae that the proposal seeks to fill in a bid to keep talented human capital in government enterprises.
Performance-Based Salary Hike
It has been proposed that the new salary structure will increase the pay scale of CPSEs with a turnover of more than one hundred crore rupees. The increase in salaries will be in line with the organizational performance and possible aspects that may include asset utilization, project cycle time, the deliverable’s profit margin, etc. This helps to guarantee that the increase in the salary scale corresponds to the company’s performance.
Public Enterprise Selection Board Recommendations
PESB has also suggested that to increase compensation for senior positions in central public sector enterprises, they require autonomy. The board noted that it had a challenge placing suitable candidates for leadership positions in public enterprises as the remunerations were not very attractive. Improving the remuneration is also viewed as a good measure towards ensuring that the organizations attract the right human capital to occupy these significant positions.
Future Actions Up to the Time of Budget Passage
The proposal shall be forwarded to the Cabinet Committee on Economic Affairs before the presentation of the budget. The committee will look into the proposal and weigh its options before arriving at a final decision about it.
The detailed budget for the financial year 2024–25 is also likely to be unveiled later this month after the interim budget was made in February by Finance Minister Nirmala Sitharaman.
