No.

W-08/0003/2017-DPE 0NC)
Government of India .
Ministry of Heavy Industries & Public Enterprises
Department of Public Enterprises

Public enterprises Bhawan

Block No. 14, CGO Complex, Lodhi Road,
New Delhi, Dated: 14th August, 2017
(t:.

Cabinet decision on implementation of the recommendations of 3rd

Pay Revision Committee (3rd PRC) on pay revision of Executive~ and
Non-Unionized Supervisors of Central Public Sector Enterprises
(CPSEs)

The undersigned is directed to inform that the Cabinet has approved the
proposal of Pay Revision of Executive (Board level executives, below Board level
executives) and Non-Unionized Supervisors of Central Public Sector Enterprises
(CPSEs) w.eJ. 1.1.2017 in its meeting held on 19.07.2017. Accordingly, two OMs
I, . dated 3rd August and 4th August, 2017 have been issued by this Department. In this
regard, it is requested to give wide publicity of the decision taken by the Government
\ as per the 'brief enclosed (in English & Hindi).

~~
(Samsul Haque)
I Under Secretary
I Phone-011-24360823
.1 Encl: As above

1. The Press Information Bureau for publicity on Television and National/

Regional! Local Newspapers, Bulletin on AIR News/AIR FM/Private FM Radio
Stations (small write-up for electronic media also enclosed)
2. To all Administrative Ministries concerned with CPSEs for disseminating
through their respective social media accounts (Facebook & Twitter)
3. All the Ministries/ Departments of the Government of India and CPSEs for
circulation of the 'brief
4. N1Cfor uploading on the website of Department of Public Enterprises
 The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved
the pay revision of Executives and Non-Unionised Supervisors of Central Public Sector
rd
Enterprises (CPSEs)based on the recommendations of 3 Pay Revision Committee. The pay
revision will come into effect from 1.1.2017.

nd
2. As against 23 months wait at the time of implementation of 2 PRC
rd
recommendations, the 3 PRC recommendations are being implemented within about 7
months from the due date.

3. The 3rd PRC was headed by Justice Satish Chandra (Retd.) and its other members
were Shri Jugal Mohapatra, Ex-IAS officer, Prof. Manoj Panda, Director, Institute of
Economic Growth Delhi, Shri Shailendra Pal Singh, Ex-Director (HR), NTPC Ltd. and Secretary,
Department of Public Enterprises (OPE).

4. On the basis of decisions taken by the Cabinet two OMs dated 3.8.2017 and 4.8.2017
have been issued by OPE for implementation of pay revision of Executives and Non-
Unionised Supervisors of Central Public Sector Enterprises which inter-alia include the
folloWing:

i) There is focus on affordability of a CPSEto implement the pay revision without its
impact being detrimental to its financial sustainability. The additional financial
impact in the year of implementing the revised pay package ina CPSEshould not
be more than 20% of the average Profit Before Tax (PBT) of the last 3 financial
years preceding the year of implementation.

ii) A uniform fitment benefit of 15% of Basic Pay (BP) plus Dearness Allowance (DA)
in case the additional financial impact of the pay revision is within 20% of the
average PBT of the last 3 financial years has been approved. .Besides, part
fitments of 10% & 5% for those CPSEsin which the additional financial impact of
pay revision on the average PBT of last three financial years is likely to be more
than 20%, has also been approved. Subsequent to the implementation,
profitability of a CPSEwould be reviewed after every 3 years.

Hi) A uniform rate of 3% of BP will be applicable for both annual increment as well as
promotion increment.

iv) The Board of Directors of CPSEs are empowered to decide on the perks and
allowance admissible to the different categories of the executives, under the
concept of 'Cafeteria Approach', subject to a ceiling of -~~'Yc>~f._B.~.

v) The house rent allowance to the employees of CPSEswill be 24%, 16% and 8% for
X-class CitYJ V-class City and Z-c1ass city respectively. The rates of HRA will be
revised to 27% 18% & 9% for X, V and Z class cities respectively w_ben IDA crosses
_259~and further revised to 30% 20% and 10% when IDA crosses 50%.
<:" ---' ',-"-
vi} The payment of work based hardship duty allowance upto 12% of Basic Pay shall
be admissible for the period the executives / non-unionized supervisors has
actually performed one of the following hardship duty:-

a} For performing duty in Underground mines, and

b) For performing duty at Offshore exploration site

vii} Regarding Performance Related Pay, the overall ceiling of 5% of the year's profit.
from core business activities has been continued. The ratio of relevant year's
profit to incremental profit for working out PRP has been however, revised to
65:35 as against 60:40 earlier. Besides, CPSfs and individual performance,
weightage will also be given to team's performance while determining the PRP
payable to an executive.

viii} The 3rd PRe's recommendation for discontinuation of "Bell curve" to the extent
that the forced rating of 10% as below par /poor performer should not be made
mandatory, has been accepted.

ix) The existing provisions regarding superannuation benefits have been retained and
as per which CPSEscan contribute upto 30% of BP plus DA towards Provident
Fund (PF),Gratuity) Post-Superannuation Medical Benefits (PRMB)and Pension of
their employees. The ceiling of gratuity of the executives and non-unionised
supervisors of the CPSEswould be raised from Rs 10 lakhs to Rs 20 lakhs with
effect from 01.01.2017 and the funding for the entire amount of Gratuity would
be met from within the ceiling of 30% of BP plus DA. Beside, ceiling of gratuity
shall increase by 25% whenever IDA rises by 50%. Further, the existing
requirement of superannuation and of minimum of 15 years of service by a CPSE
employee will not be mandatory for the pension, whereas Post-Retirement
Medical Benefits will continue to be linked to requirement of superannuation and
minimum of 15 years of continuous service (except for Board level Executivesr

x) The corpus for post -retirement medical benefits and other emergency needs for
the employees of CPSEswho have retired prior to 01.01.2007 would be created by
contributing the existing ceiling of 1.5% of PBT. The formulation of suitable
scheme in this regard by CPSEshas to be ensured by the administrative
Ministries/Departments.

xi) The revision of scalesof pay for Non·unionized Supervisory staff would be decided
by the respective Board of Directors.

xii) An Anomalies Committee consisting of Secretaries of Department of Public

Enterprises (DPE), Department of Expenditure and Department of Personnel &
Training has been constituted for a period of two years. to look into further
specific issues/problems that may arise in implementation of the Government's
decision on 3rd pay revision Committee's recommendations.

Xiii} The expenditure on account of pay revision is to be entirely borne by the CPSEs
out of their earnings and no budgetary support will be provided.
1. The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved
the pay revision of Executives and Non-Unionised Supervisors of Central Public
Sector Enterprises based on, the recommendations of 3rd Pay Revision Committee.
The pay revision will come into effect from 01.01.2017. As against 23 months wait at
the time of implementation of 2nd PRC recommendations in 2008, the 3rd PRC
recommendations are being implemented within about 7 months from the due date
Le. 01.01.2017.

2. Affordability of a CPSEto implement the pay reVISion without its impact being
detrimental to its financial sustainability will be an important criterion to effect the
pay revision. A uniform fitment benefit of 15% of Basic Pay(BP) plus Dearness
Allowance (DA) in case the additional financial impact of the pay revision is within
·20% of the average PBTof the last 3 financial years has been approved.

3. Besides, part fitments of 10% & 5% for those CPSEsin which the additional financial
impact of pay revision is likely to be more than 20% of average PBT of last three
financial years has also been approved. Subsequent to the implementation,
profitability of a CPSEwould be. reviewed after every 3 years. Other benefits like
Perks & Allowances based on {{cafeteria approach" upto 35% of BP and
Superannuation Benefits upto 30% of BP+DAhave been approved.

4. The house rent allowance to the employees of CPSEswill be 24%, 16% and 8% for X-
class City, Y-c1assCity and Z-c1asscity respectively. The rates of HRA will be revised to
27% 18% & 9% for X, Y and Z class cities respectively when IDA crosses 25% and
further revised to 30% 20% and 10% when IDA crosses 50%.
 ~-~~
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