Salary Adjustments for PSUs Post 7th Pay Commission: A Comprehensive Guide

The 7th Pay Commission, implemented in January 2016, significantly revised the salary structure for Public Sector Undertakings (PSUs) in India. This revision has had a substantial impact on the remuneration of government employees, providing a clearer framework for basic pay, allowances, and increments. In this article, we delve into the key features of the revised salary structure, focusing specifically on the basics, salary structures, and the overall impact on employees at different grades within PSUs.

Key Features of the Revised Salary Structure

The 7th Pay Commission introduced several key features to the current salary structure, which are essential for understanding the changes in remuneration for PSUs. These features include:

Basic Pay Increase

The basic pay for PSUs was increased by a factor of 2.57, as recommended by the 7th Pay Commission. This significant hike ensures that employees are better compensated for their services and skills. The new basic pay levels have laid the foundation for the revised salary structure and have positively impacted the overall compensation package.

Pay Matrix

A new pay matrix was introduced, providing a clearer structure for salary levels and increments. This system ensures transparency and consistency in salary adjustments, making it easier for both employees and employers to understand their right and responsibilities.

Dearness Allowance (DA)

The DA was revised and is now updated periodically based on inflation rates. This ensures that the basic pay is adjusted in line with the rising cost of living, maintaining the purchasing power of salaries.

Other Allowances

Vaious allowances, including House Rent Allowance (HRA), transport allowance, and others, were also revised to reflect current market conditions. These adjustments aim to provide better support and comfort to employees, especially those in need of additional financial assistance.

Increment

The annual increment was set at 3% of the basic pay. This policy ensures a steady increase in remuneration over time, allowing employees to enjoy progressive growth in their salaries.

Specific Figures for Entry-Level Positions in PSUs

The precise salary after the 7th Pay Commission varies based on the position grade and the specific PSU. Here are some examples to illustrate the impact of the revised salary structure:

Entry-Level Basic for PSUs after 7th PRC: Rs 60,000 (E1 Grade)

Salary Structure: Basic 35% of basic 32% of basic 12.5% of basic (DA) Company provided accommodation (Bungalow type) Unlimited medical expenses

Average Gross Salary: Approx. Rs 1,08,000 (Rs 85,000 in hand)

CTC (Cost to Company): Approx. Rs 13 lakh (excluding accommodation and medical expenses)

Provision for Housing: Additional Rs 2 lakh equivalent in the form of accommodation benefits

Provisions and Conditions for Different PSUs

It's important to note that not all PSUs are eligible for the 7th Pay Commission. Some PSUs, like CPSE (Central Public Sector Enterprises), follow their own Pay scales based on guidelines from the Department of Public Enterprise (DPE).

CPSE (Central Public Sector Enterprises)

CPSE adheres to IDA (Industrial Development Authority) pay scales, while the DPE (Department of Public Enterprise) guidelines apply. Key details of the DPE Pay scales from January 2017 are as follows:

E0: Rs 30,000 - Rs 120,000 E1: Rs 40,000 - Rs 140,000 E2: Rs 50,000 - Rs 160,000 E3: Rs 60,000 - Rs 180,000 E4: Rs 70,000 - Rs 200,000 E5: Rs 80,000 - Rs 220,000 E6: Rs 90,000 - Rs 240,000 E7: Rs 100,000 - Rs 260,000 E8: Rs 120,000 - Rs 280,000 E9: Rs 150,000 - Rs 300,000

These ranges reflect the salary progression within different grade levels and provide a clear framework for understanding the salaries at PSUs.

Conclusion

The 7th Pay Commission has brought about significant changes in the salary structure for PSUs in India. These changes not only reflect a commitment to fair compensation but also align with the evolving needs of both employees and organizations. By following the revised salary structure, PSUs can attract and retain top talent while ensuring that employees are adequately compensated for their contributions.