Next pay panel to decide PSU staff sops

In what may be a blow to them, the Sixth Pay Commission is unlikely to consider performance-linked bonus and incentives for public sector employees.

"These demands may not be taken up in the forthcoming pay commission. This government will not take any decision on this issue. It will be left for the next pay commission for their point of view," a government official told Business Standard.

Though public sector units are governed by government pay structures, they have to compete with current private sector pay structures. This at times puts them at a loss when recruiting or retaining top talent, many analysts feel.

All public and private sector industries are governed by the Industrial Dispute Act, 1956. However, the dearness allowance is negotiable in the private sector, while it is non-negotiable in the public sector.

Leaving the matter to be decided by a later pay commission is expected to further fuel the divide between the competitiveness of the PSUs and the private companies operating in the same verticals.

"Due to a delay in the decision making process, the competitiveness of our PSUs may hit a road block," an official said.

The Arjun Sengupta Committee on public sector enterprises had mooted measures to improve the competitiveness of these units. These include greater autonomy to undertake investment decisions and promote competent officials.