Ministry seeks review of ‘affordability clause’

ROURKELA: Denied pay revision due to ‘affordability clause,’ there is a ray of hope for the executives of SAIL’s plants, including Rourkela Steel Plant (RSP), with the Ministry of Steel urging the Department of Public Enterprise (DPE) to review the clause.

The DPE, under the Ministry of Heavy Industries, in August 2017 had issued guidelines with the ‘affordability clause’ for Central Public Sector Enterprises (CPSEs). Under it, any Central PSU facing losses for three years is barred from executives’ pay revision. Due to it, executives of SAIL and Rashtriya Ispat Nigam Ltd (RINL) under the MoS are affected.

However, the Steel Ministry on September 18, through an Office Memorandum, has urged the DPE to review the ‘affordability clause’ and suggested to take into account the average PBT (Profit Before Tax) of best three years of the last five years.

The Steel Ministry reasoned that the steel sector is traditionally a cyclic industry, adding that steel business is influenced by both domestic and international market volatilities and global trade policies.

RSP Executives’ Association (RSPEA) president Bimal Bisi and Steel Executives’ Federation of India (SEFI) chairman N K Banchchhor were instrumental in influencing the Steel Ministry after approaching the Prime Minister’s Office, various ministries and a host of MPs.

The RSPEA and the SEFI insisted that since the pay revision is done every 10 years, the financial results of 10 years of SAIL should be considered and not the immediate last three years, as prescribed in the ‘affordability clause’.

The Steel Ministry also sought to know from the DPE if the modification of ‘affordability clause’ is under consideration by it and if the administrative Ministry has any power to relax the ‘affordability clause’ and if the steel sector PSUs can be treated as special case in view of cyclic nature of the steel industry.

The Steel Ministry’s intervention ahead of the RSPEA election on September 30 holds much significance, but it remains to be seen whether the DPE relents or not.

Bisi said SAIL has been showing signs of turnaround and hoped for early pay revision of SAIL executives.
RSPEA sources said if the ‘affordability clause’ is lifted, then about 14,000 SAIL executives, including 1,450 of RSP and those of RINL, would get full pay benefits, including 15 per cent Minimum Guaranteed Benefit on basic and Dearness Allowance and 36 per cent perks.