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This association has prepared the answer for the question raised by the members. All members are requested to go through it and know about the CPSEs in India and yourself in BSNL.

Q : What is CPSE?

A : CPSE term is used to refer to companies in which the Union Government has majority (51 percent or more) of the company equity. CPSE’s primary role is not to earn profit but to play a vital role in economic development of the country. BSNL is a CPSE with 100% equity of Union Government. It’s primary role is to make available telecom Services in every part of the country at affordable price.

Q : How many CPSE s are there in India?

A : 216 in Operation.

Q : What is the classification of CPSEs? What is purpose of different classification?

A : Currently, there are different systems of classification for CPSEs. Important among these are:

  1. Cognate group-wise classification: based on the generic nature of work carried out by PSEs and comes closest to the sectoral classification of industries in the private sector.

  2. Category wise classification: Grouping of CPSEs into 4 Schedules, namely A,B,C & D, for purposes of determining the pay scales of Board level executives and determining its organizational structure at the top level. This classification is also used to determine the compensation package of executives.

  3. Classification of CPSEs into Navratna, Miniratna I, Miniratna II, etc. for the purpose of delegation of powers. However, the status of Navratna or Miniratna of a CPSE has no direct bearing on the compensation structures

Q : How the CPSEs are classified in to the category A, B, C & D?

A : Categorization of PSUs is done by DPE on the basis of proposals received from the administrative Ministry/Department concerned, and in consultation with the Public Enterprises Selection Board.

For the purpose of initial categorization of PSUs, the DPE had developed certain broad criteria/parameters. The parameters to be adopted for this purpose are quantitative factors like investment (paid capital + long term loans), capital employed (net block + working capital), net sales, profit, number of employees, number of units, etc. and qualitative factors like national importance, complexities of problems, level of technology, prospects for expansion and diversification of activities and competition from other sectors. In addition, the critical importance of the corporation will also be taken into account. Wherever actual figures of quantitative factors are not available, figures projected in the Cabinet Note relating to the setting up of the Company are to be used.

Q : What is the initial and current Category of BSNL?

A : Initial category of BSNL is Schedule-A and current category is still schedule-A. MTNL is also Schedule-A Category but BSNL is at higher ranking.

Q : How the CPSEs are classified into Navratna, Miniratna I, Miniratna II, etc?

A : The criteria for classifying a CPSE as Navratna are (i) The CPSE should be a Miniratna I and Schedule A company, (ii) The CPSE should have obtained ‘excellent’ or ‘very good’ rating in three of the last five MOUs and (iii) The CPSE should have obtained a Composite score of 60 or more, calculated with reference to seven specified parameters / ratios. Similarly, enterprises that have been making profits continuously during the preceding three years and fulfilling a few other conditions like positive net worth, non-dependence on budgetary support, not defaulting in repayments of loans and interest on loans etc. are categorized as Miniratna. In case the pre-tax profit is Rs. 30 crore or more in any one of the three years, the CPSE is classified as Miniratna I. Otherwise it is Miniratna II.

Q : What is the status of BSNL in respect of Navratna, Miniratna I, Miniratna II, etc?

A : BSNL is Miniratna I.

Q : How the employees of CPSEs are classified?

A : Employees of CPSEs are broadly classified into three category (1) non-executives (2) executives (3) Board of Directors.

Q : What is the compensation package of CPSE’s employees?

A : Compensation package of all category of CPSE’s employees are broadly classified into four component.

  1. Basic or serving Benefits (Basic + IDA + HRA);

  2. Retiral Benefits (EPF + Gratuity + Post superannuation Medical + Pension)

  3. Perks & Allowances

  4. Variable pay/Performance related pay.

Q : Who is the authority to decide the compensation package of the CPSE’s employees?

A : Based on the recommendations of the pay revision committee constituted by Government of India, Department of Public Enterprises (DPE) is the authority to decide the compensation package of Board of Director and executives and CPSE board is the authority to negotiate the compensation package of the non-executives in adherence to the guidelines laid down by DPE. Compensation package for CPSE executives get revised in every 10 years from 1997 onwards and for non-executives it get revised after either every 5 or 10 years.

Q : How the compensation package is decided for CPSE’s executives?

A : Compensation package of CPSE executives are decided by pay revision committee and finally approved by DPE. Fist three components (serving benefit, retiral benefit, perks& allowances) are fixed benefits which are based on affordability, paying capacity and sustainability of the CPSEs and no relation with profit /loss of the CPSEs. Fourth component (PRP) is variable pay which is totally based on profit and loss of the CPSE.

Q : If government department converted into CPSE how the CDA pay scales get mapped into IDA pay scale. How BSNL had converted CDA pay scale into IDA pay scale for it’s employees?

A : Government Departments follows seven layer hierarchy and CPSEs follows 10 layer hierarchy (E0 to E9), hence there is no direct formula to map CDA pay scale into IDA pay scale. Initial IDA pay scale must be finalized with negotiation of existing employees associations and unions keeping in view their compensation on CDA pay scale, position in hierarchy on CDA pay scale, parity with similar category of existing CPSEs etc.

BSNL is formed from government department DOT in Oct-2000. BSNL had been awarded Schedule-A category CPSE which was at 2nd rank from the top and much higher rank than MTNL. BSNL could not give lower pay scale than other CPSEs having lower rank in schedule category for direct recruit’s graduate engineers. Position in hierarchy, Qualification and functional responsibilities of JTO/JAO are same in both BSNL and MTNL hence there was no reason to finalized lower pay scale than MTNL for BSNL executives.
MTNL has given E2 (10750) pay scale to JTO/JAO but BSNL has given E1A (9850). Lower pay scale of E1A in BSNL is a compromised pay scale to extend the pension facility to it’s executives which MTNL was not extending. Special amendment is made in CCS pension rule for BSNL executives which says that absorbed employees will continue to get government pension for the period of service rendered in BSNL subjected BSNL will pay the pension contribution to the government and BSNL direct recruits will get pension for which BSNL had to devise it’s own pension fund.

BSNL is contributing towards government pension for absorbed employees but BSNL has not devised any pension fund for direct recruits hence compromised pay scale of E1A is not applicable for direct recruits. Initial pay scale of direct recruits JTO/JAO is E2 only. BSNL has to re-fix the pay scale and has to pay arrears for the past period also.

During Oct-2000 to year 2009 BSNL had been top profit making CPSE but paid much lower parks and allowances than many CPSEs having lower profit just because existing associations and unions failed to negotiate the same.

Q : What is Management Trainee (MT) in CPSEs?

A : Followed by recommendations of first PRC in 1999 DPE has suggested that every CPSEs has to make direct recruit of professionally qualified candidates (BE/ B Tech, ME/M Tech, MBA etc. as per the need of the company) through open all India competition or some candidates through campus interview at lower rung of executives and groom them for management succession plan. These professionally qualified executives are called MT.

Q : Who is MT in BSNL?

A : BSNL has already made recruitment of professionally qualified candidates in the name of GE-JTO/JAO at lower rung of executives through open All India Competition hence these directly recruited GE-JTO/JAO are MT in the field of operation and finance hence they need to be groomed for management succession plan in operation and finance. To fulfill the need of professionally qualified executives in some specific field like sales marketing, HR etc management may recruit MBA candidates at the same level of GE-JTO/JAO and groom them accordingly.

Q : Why BSNL is not grooming us to become a succession plan of management?

A : Almost whole BSNL management (ITS) has been working on deputation since formation of BSNL. Maximum period of deputation is 5 years except some exceptional cases. If BSNL would have groomed us for management succession plan by this time we had been in the position to take over the post of DGM and hence deputation/deployment of ITS officers are not justified. BSNL management has made recruitment rule and promotion policy in such a way that under-qualified have Better Avenue than qualified candidates. By promoting under qualified candidates to the managerial level at the age of retirement by superseding qualified candidates and moreover having no competency to take over the managerial post, most of them are forced to refuse the promotions. By doing this BSNL management is in the position to justify the court of law and administrative ministry that if ITS officers would be send back there is no succession plan for Sr. managerial post in BSNL hence anarchy will prevail in BSNL. In this planed way they have created exceptional case in BSNL to justify deputation/deployment of ITS officers in BSNL beyond five years. Some of the executives associations are also in confidence and supporting the vested interest of BSNL management.

Q : Why BSNL is downgrading the JTO cadre by lowering the educational qualification and pay scale?

A : By downgrading the JTO cadre by lowering the educational qualification and pay scale BSNL management is trying to justify that Direct recruits GE-JTO are not at par with MT as recommended by DPE. They are trying to create space for another direct recruitment in the name of MT to hide their vested interest committed in past. Some of the executives associations are also in confidence and supporting this vested interest of BSNL management.

Q : Why BSNL has made DGM recruitment? Why internal executives are not made eligible over private candidates?

A : Deputation of ITS officers was over in 2005 itself but some extension was taken on special ground by the cabinet up to Dec-2008. There was no formal extension beyond Dec-2008 and ITS officers were working illegally in BSNL after that in the name of proposal sent to cabinet for further extension. Illegal deputation of ITS officers had been challenged by various individuals and associations including AIGETOA. Management has submitted to the court of law that there is no replacement of the ITS officers as on date. Court has directed BSNL management to make arrangement of replacement either by promoting suitable candidates from among BSNL or by external recruitment if suitable candidates are not available within BSNL. As BSNL management had already submitted before different authority that there are no suitable candidates within BSNL hence decided to go for external recruitment at the level of DGM. They have made DGM recruitment rule in such a way that no internal candidate was made eligible as this justified their contention that there are no internal talent available to take over the role of higher management. Making internal executives eligible would have exposed them before different authorities. BSNL management was not at all interested to make any such recruitment or promotion which can replace ITS officers working on deputation. DGM recruitment was just an eye wash and to submit before the court of law that they are trying to recruit from external candidates but they are also not interested to join BSNL. BSNL management was also in fear that if they will make eligible to internal candidates they will pass any toughest examination and number of candidates will become available to join as DGM but private candidates will either not pass the examination or not prefer to join BSNL due to less salary. In this way once again BSNL management will be able to justify before the court of law that there is still no replacement of ITS officers from external as well internal candidates. Based on the same submission, ITS officers are deployed in BSNL even after court of law has ended their illegal deputation.

Q : What is pay revision of CPSE executives?

A : Pay revision of CPSE executives takes place in every 10 years to consider the changes that have taken place in the structure of emoluments of public sector executives over the years. Government constitutes a Pay revision committee w.r.t. certain terms of reference to be looked into and this committee interact with board of CPSEs, associations, unions, private companies, MNCs etc and after extensive study over a period of times submits it’s recommendations. The basic motto of the pay revision committee is to decide the compensation package of the CPSE’s board and below board level executives on account of economic and social development and the global economic scenario and competitive environment. India is developing country where social and leaving standard of every citizen is increasing day by day hence total compensation package of CPSE executives always increased after every pay revision.

Q : What are the recommendations of 2nd pay revision in respect of compensation package of executives in CPSE?

A : First pay revision was made effective from 01.01.1997 hence 2nd pay revision was due on 01.01.2007. Government of India constitutes 2nd Pay revision committee in Nov-2006 under the chairmanship of Mr. Justice M.J. Rao (Retired Judge, Supreme Court of India) . After an extensive study of around 18 months, committee have submitted its recommendations to government of India. GOI has after due consideration of recommendations with certain modifications have issued final order in Nov-2008 and some more modification has been done afterwards. Some key points of final order issued by DPE in respect of executive’s compensation are as under:

  1. Basic or serving Benefits (Basic + IDA + HRA)- uniform 30% fitment benefit on 78.2% IDA merger with basic as on 01.01.2007

  2. Retiral Benefits (EPF + Gratuity + Post superannuation Medical + Pension): 30% of Basic plus IDA.

  3. Perks & Allowances: 50% of Basic.

  4. Variable pay/Performance related pay. 40 to 200% of the basic

First three components are known as fixed benefit and dependent on affordability, paying capacity and sustainability of the CPSE and have no relationship with profit/loss of the company.

Fourth component PRP is variable benefit and having direct relationship with profit and loss.

Q : What is the meaning of affordability, paying capacity and sustainability of the CPSE to implement the first three component of 2nd pay revision?

A : DPE has clearly defined the affordability of CPSEs to implement 2nd pay revision. As per the para-3 of DPE OM dated 26/11/2008 CPSEs shall implement all these benefits subjected to the condition that additional outgo by such revision for a period of 12 months should not result in more than 20% dip in profit before tax for the financial year 2007-2008 in respect of executives as well as non-unionised supervisory staff taken together. CPSE that cannot afford to pay full package can implement with either part PRP or no PRP. Once CPSE is in profit in year 2007-08 there is no question of paying capacity and sustainability in other words even if CPSE is in loss during financial year 2007-2008 it can have paying capacity and sustainable.

Q : Whether BSNL fulfill the condition of affordability, paying capacity and sustainability of the CPSE to implement the first three component of 2nd pay revision in totality? If yes, why BSNL has not implemented?

A : PBT (profit before tax) of BSNL during the financial year 2007-2008 was about 4,500 Cr and additional outgo on implementation of full package of pay revision in respect of executives for a period of 12 months is much less than 20% of PBT. BSNL must implement all the 4 benefits in totality including perks & Allowance and even PRP up to year 2008-09, till BSNL was in profit.

30% superannuation benefit is applicable to only direct recruits in BSNL as other section of executives have chosen government superannuation scheme which is already implemented. Authority responsible to process the implementations are working on deputation hence they will not be benefitted by perks& allowances also. This is the exact reason to not implement the 2nd and 3rd component in totality. Moreover our own direct recruits are not aware about their own benefits and not ready to fight for their right. AIGETOA is only association which is fighting against such injustice but some of our own direct recruits who are beneficiary are acting against the fight of this association. The day, we all direct recruit will start fighting together all the three components will be implemented in totality.

Q : Is it not the fact that BSNL is running into the loss since last four financial years? If BSNL is running into loss how it will pay the compensation recommended by 2nd PRC?

A : Yes, it is the fact that BSNL is running into the operational loss since last four financial years. DPE has already clarified that first three components are based on affordability, paying capacity and sustainability not based on profit and loss. BSNL is having real asset value of about 400000 thousand Cror and commutative operational loss so for is around 24000 Cror. Moreover BSNL is 100% government owned company and there is no constraint of money for the government. BSNL will pay from the same source from where BSNL is already paying other parts of the compensation. This pay revision is for next 10 years on the basis of financial position of the company for the year 2007-08. If BSNL is running into the loss, this will affect our next pay revision not this pay revision. Moreover we are already not getting PRP (40 to 200% of Basic) due to current loss which is substantial part of our total compensation.

Q : Whether direct recruit executives recruited after 01.01.2007 will get the 30% fitment benefit? What should be their initial pay?

A : Yes, BSNL board has every right to extend 30% fitment to executives recruited after 01.01.2007 but before the date of presidential order. Executives recruited after issuing of presidential order cannot get 30% fitment. the basic motto of PRC is to increase leaving standard of the CPSE executives considering the economic and social development in the country, board of directors have every power to fix the initial pay of the direct recruits executives over and above the standard pay scale to maintain the pay parity and to give the benefit of social and economic development of the country. In fact this is the responsibility of the board of directors. Minimum of 10 pay scales (E0 TO E9) recommended by DPE followed by 2nd PRC is not for recruitment already exists in CPSE but these scales for new recruitment at the level where recruitment does not exist. i.e. in BSNL recruitment of JTO already exist hence they cannot be given minimum of the pay scale but initial pay scale must be finalized in parity with 30% fitment. If BSNL management is planning new recruitment supposes at E3 which does not exist in BSNL then BSNL shall give them minimum of the E3. All the CPSEs have already considered this fact and upgraded the pay scale of direct recruits to the next higher level. In fact many CPSEs have fixed the initial pay scale of direct recruits higher than the 30% fitment to attract the new talent.

Q : Why BSNL board is not fixing the initial pay scale of executives recruited after 01.01.2007 at higher level so that benefit of pay revision can be given? Even further degraded from E1A to E1 and forcing them to face a pay loss over pre-revised scale.

A : This is not the mistake of the board of directors. Middle and senior management responsible to process the file are very much conservative and have narrow thinking. They always feel pain with other’s happiness. Things are not being put up in true sprit before the board of director. Moreover most of the sufferers himself are very much selfish and fully dependent on others. They are not ready to sacrifice anything in the fight for right. They are just blackmailing associations but not ready to support it for their own cause. Whenever they will give up their selfishness and fear they and will start supporting association unconditionally, management will automatically start thinking positively and issue will be resolved.

Q : What will be the future effects, if upgradation and pay parity issue are not resolved in respect of executives recruited after 01.01.2007?

A : Disparity of pay and compensation among JTO recruited before and after 01.01.2007 will increase drastically with coming time bound upgradation and pay revisions. This disparity of pay and compensation will badly affect the moral of the young executives in turn will affect the performance towards company. It is also possible that young executives will start fighting among the executives working in the same cadre and complete anarchy will prevail in the company.

Q : What is superannuation benefit in CPSE? Why this is necessary for CPSE employees? What should the amount of superannuation benefit?

A : 30% superannuation benefit of CPSE employees as recommended by 2nd PRC includes EPF, Gratuity, post retire medical benefit and pension. EPF and gratuity is statuary provision of government of India which must be implemented in any private company and CPSE. Post retirement medical benefit and pension is optional for private companies but after 2nd PRC it is mandatory for CPSEs executives. Contribution for post retirement medical benefit and pension is subjected to affordability of the company with ceiling of 30%. Unlike private companies there is fixed retirement age of CPSE employees. After retirement CPSE executives have no source of income for their old aged survival hence CPSE must ensure the post retirement survival of their own executives who have given their precious years to the company. EPF and gratuity is for emergency need like children education, marriage etc during the service life. Post retirement medical benefit and pension is for the post retirement survival.

The amount of superannuation benefit is directly linked with the serving benefit of the executives at the time of their retirement. CPSE must contribute for pension of CPSE employees in such a way that executives must get minimum 50% of their total emoluments as pension so that they can maintain their minimum social status after retirement. BSNL has already given 30% fitment; means upgraded our current social status hence BSNL must pay at least 12% towards pension contribution and 3% towards post retirement medical benefit so that executives can maintain same social status after their retirement.

Q : What should be career of professionally qualified direct recruit and how it can be achieved?

A : Professionally qualified executives recruited in BSNL must be treated as MT and they must be groomed for the management succession plan. We have to stop another direct recruitment at higher level than us in BSNL at any cost. We must force hard BSNL management to formulate CPSE cadre hierarchy in such a way that professionally qualified direct recruits shall get better promotional avenue.

Q : What are the main issues for which AIGETOA is fighting for and what support this association expects from us?

A : This association is fighting for prestige and dignity of professionally qualified direct recruit executives having basically three issues Standard and at par pay scale, career progression at par with leading CPSEs and superannuation benefit as ordered by DPE. Professionally qualified executives recruited in BSNL must not get less pay than similarly located CPSE; career of professionally qualified executives must be at par with top leading CPSEs. All the CPSEs have already given separate and better career enhancement to professionally qualified executives. Even government department after sixth pay commission have given separate and higher status to professionally qualified executives. BSNL is only company in India which gives lower status to it’s professionally qualified executives. Non-professionally qualified executives have better career in BSNL.

Direct recruit professionally qualified executives are around 12000 in BSNL. This association appeal to all of them to come forward and give their hands in ongoing fight. We are less in quantity but our quality is much more than others. If we all start raising our voice together definitely it will get all the things for which we deserve.


Disclaimer : Informations furnished above are solely for the knowledge enhancement of the members of this association which is based on study of several rules, guidelines etc. content of the information are not 100% guaranteed hence members are advised to verify the fact.