Oil PSUs deny govt claim on execs' pay

Kalpana Pathak / Mumbai January 28, 2009, 0:19 IST

http://www.business-standard.com/india/news/oil-psus-deny-govt-claimexecs-pay/02/00/347309/347309

Contrary to the government’s claim that entry-level officers of the state-owned oil
companies earn as much as Rs 1 lakh a month on the basis of the revised pay package,
details provided by the oil-marketing companies to Business Standard show that the
entry-level salaries are much lower.

At present, the annual cost-to-company (CTC) of an entry-level officer in an oil-

marketing company stands at Rs 6.3 lakh per annum, including the annual performance
bonus and various allowances, perks and retirement benefit that these officers are
entitled to.

“The hike is not more than 30 per cent. If we take that into account, total entry-level
salary will be a little over Rs 8 lakh annually. It will never be Rs 1 lakh per month,” said
a senior HR official of an oil company who did not want to be quoted.

This goes against the claims of the parent ministry of these companies — petroleum
ministry — which in an advertisement in some national dailies dated January 7, had
said: “As per the revised pay package, the total emoluments of entry-level officers at
oil PSUs is more than Rs 1 lakh per month and that of chairman of oil PSUs is around Rs
3 lakh per month.”

This advert was issued on the day when over 50,000 white-collared employees from the
oil companies went on a controversial strike under the umbrella of the Oil Sector
Officers’ Association (OSOA), demanding higher wages.

After adopting a rather soft approach on the first two days of the strike, which saw fuel
pumps across the country running dry, the government decided to take a tough stance
which led to arrests and suspension of many of the striking officers.

This evaporation of sympathy was largely prompted by the eye-catching salary figure of
“a lakh a month”.

Questioned on the actual salary numbers, Petroleum Secretary RS Pandey said that he
had been given to understand that it was “a-lakh-a-month”.

There were also other “untruths” that were being circulated, according to the oil
officers.

“It is being said that the government hiked our pay around 300 per cent whereas the
actual hike — which has come after a period of 10 years — is only 30 per cent,” said an
official from an oil company, who is also a member of the OSOA.
Looking at the upstream sector, the annual CTC for an entry-level officer is Rs 7.4 lakh,
which would go up to a little less than Rs 10 lakh with the revision.

They also claim that the risk pay proposed by Justice Rao has been denied and Fitment
benefit has been lowered from 42 per cent to 30 per cent at the highest level.

The OSOA says that it followed all the canons of good negotiations over the last two
years and was encouraged by written assurances from the government conceding that
their demands are genuine.

However, since the actual action on their demands was not visible, they gave calls for
strike thrice, but withdrew it each time on assurances from the government.

It was only the fourth time that the officers decided to go ahead with the call for
strike.

“The officers are demoralised. Despite written assurances from the government that
our demands are genuine, we have been let down. How does the management expect
us to work and perform in such conditions?” asked an official from one of the oil PSUs
on condition of anonymity.

The OSOA had earlier submitted a 13-point charter of demands — none of them met so
far — that included categorising all oil sector PSUs in the highest (A+) category, thereby
entitling workers to the best remuneration available for a public sector company. It
also sought a wage revision every five years.

The association says ONGC alone will have to shell out only Rs 1,200 crore per annum if
it implements the increase in salaries. That is not much of a cost for the navratna giant
with its annual revenues of over Rs 60,000 crore.

A Group of Ministers headed by Home Minister P Chidambaram is currently looking into

the demands of the oil officers.

According to human resource consultants, the difference between the pay scales of
private and public sector is as much as 40 per cent in most industries.