Good news! Cabinet clears 15% hike in salaries for CPSE employees

In a major news for the CPSE employees, the Cabinet on Wednesday evening cleared 15% hike in their salaries. The decision to hike the salaries of public sector employees was taken during a Cabinet meeting headed by Prime Minister Narendra Modi.

The Cabinet approved implementation of the recommendations of the 3rd Pay Commission for central public sector enterprises’ (CPSE) employees, an official said. The 15% hike was proposed by the commission earlier, is the lowest increase so far and will be effective from January 1, 2017. The previous commission had given a 37.2% rise in 2007 and the first commission had given between 24% and 30% increase.

Apart from this, the Cabinet also permitted the group of ministers on disinvestment, headed by Finance Minister Arun Jaitley, to decide on the pricing of CPSE ETFs and their composition, like the inclusion of shares of listed financial institutions. The Cabinet Committee also authorised an alternative mechanism to decide on the inclusion of stocks of listed insurance companies and banks, as per the official statement released.

Under the ‘alternative mechanism’ for disinvestment, the group that includes the Finance Minister, Road Transport Minister Nitin Gadkari and the concerned administrative minister, so far decided on the quantum of minority stake sale in PSUs. The CCEA also permitted the ‘alternative mechanism’ to take decision for divestment of listed CPSEs through Exchange Traded Funds (ETFs), subject to government retaining 51% in these CPSEs.

Another major decision taken at the meeting was regarding the sale of stake in HPCL. The CCEA agreed to sell 51.11% government stake in Hindustan Petroleum Corp Ltd (HPCL) to India’s largest oil producer ONGC. So far in the current fiscal, the government has already raised about Rs 7,000 crore through share sale in four companies. Of this, Rs 1,207 crore have come from initial public offering of Hudco in May and Rs 1,192 crore through Nalco OFS in April and Rs 203 crore through RCF OFS in June.