NMDC OFFICERS

ASSOCIATION
PRESENTATION
BEFORE
THE 3RD PAY
REVISION
 OUR MISSION

TO EMERGE AS A GLOBAL
MINING ORGANISATION
WITH INTERNATIONAL
STANDARDS OF
EXCELLENCE RENDERING
OPTIMUM SATISFACTION TO
ALL ITS STAKE HOLDERS
 NMDC OFFICERS ASSOCIATION

WELCOMES 3rd PRC

HONBLE JUSTICE SATISH CHANDRA

(RETD.) CHAIRMAN
SHRI JUGAL MOHAPATRA, IAS, EX.
SECRETARY (MOF)
MEMBER
PROF. MANOJ PANDA, DIRECTOR,
INSTITUTE FOR
ECONOMIC GROWTH, DELHI MEMBER
SHRI SHAILENDRA PAL SINGH, EX.
DIRECTOR(HR), NTPC
LIMITED MEMBER
SECRETARY, DPE, GOVT. OF INDIA EX-
OFFICIO MEMBER
NMDC Officers Association
representing all Executives of
NMDC extends special thanks
to Esteemed 3rd Pay Revision
Committee for giving us a
chance to represent our views
& suggestions. We are highly
anxious to get an adequate &
attractive pay package with
resolving the long pending
issues related to pay Package
Existing Scales of Pay in NMDC(W.E.F.
01.01.2007)

GRADE SCALE OF PAY

E-0 16400 3% - 40500
E-1 20600 3% - 46500
E-2 24900 3% - 50500
E-3 32900 3% - 58000
E-4 36600 3% - 62000
E-5 43200 3% - 66000
E-6 & 7 NOT YET FINALISED
E-8 51300 3% - 73000
E-9 62000 3% - 80000
Composition of Pay
Package
The existing composition
consisting of
Basic Pay,
Dearness Allowance,
Perks & Allowances,
Performance Related
Payments,
HRA,
 CPSE PAY SCALES AT PAR WITH MNCs
The pay scales of CPSEs Executives
including Board
level executives should be redesigned and
be made
comparable to their counterparts in the
leading
MNCs/Private Companies in the related
industry.
BASIC PAY RATIO TO BE MADE 1:4
The present ratio of Basic Pay between the
lowest
and highest level executives is 1:6. The
proposed
ratio is 1:4
POINT TO POINT FIXATION IN BASIC
PAY

To ensure that senior personnel are not

placed at a disadvantage vis--vis their
juniors, there should be Point to point
fixation in basic pay. This will also avoid
post revision pay anomalies.

Entry level scale in all CPSEs to be kept

at par to avoid frequent migration of
Executives from one CPSE to other
BASIC PAY
FITMENT BENEFIT TO BE 50%
Fitment Benefit amount should at least be
50% of
Basic Pay plus DA at the entry level.

OPEN ENDED PAY SCALE

The Pay Scales should be open ended or
alternatively the span of pay scales
should be long enough to avoid
stagnation as most of the executives are
not getting increments for the last more
than 5 years.
BASIC PAY
5% RATE OF INCREMENT
During Pay Revision w.e.f. 01.01.1997, the
rate of annual increment was 4% but
during last pay revision it was reduced to
3%. Taking into consideration the trend of
rising inflation in last five years
particularly the increase in DA on
quarterly basis is not sufficient

TWO INCREMENTS @ 5% ON
PROMOTION.
At least two increments on promotion to
be introduced to motivate the Executives
PROPOSED SCALE
ENTRY LEVEL SCALE AFTER
GRADE SCALE AT PRESENT REVISION

E0 16400 3% 40500 42968 5% 106110

E1 20600 3% 46500 53972 5% 121830
E2 24900 3% 50500 65238 5% 132310
E3 32900 3% 58000 86198 5% 151960
E4 36600 3% 62000 95892 5% 162440
E5 43200 3% 66000 113184 5% 172920
E6 & E7 NOT DEFINED
E8 51300 3% 73000 134406 5% 191260
E9 62000 3% 80000 162440 5% 209600

40% OF FITMENT FACTOR TO BE APPLIED TO ALL SCALES

FOR THE EMPLOYEES WHO ARE ON ROLLS ON 31-12-2016
 CALCULATION SHEET
Justification for Multiplication
Factor
As proposed by VIIth pay commission the scale
of entry level executives is 2.62 x in pay matrix.
Considering 2.25 x (Basic +DA) + 14.3% hike,
which comes to 2.62 x as proposed.

50% fitment factor should be considered for

executives. As the revision for non-executives
implemented on 01-01-2012 @ 23% in NMDC ltd
and if the same hike is expected during their next
revision due on 01-01-2017, the total hike given
to non-executives over a period of 10 years
become 46%.
 DEARNESS ALLOWANCE
100% NEUTRALIZATION
100% neutralization of rise in consumer price
index
for DA calculation should continue and the
reference
date / Index (WPI) for calculating IDA should be
same as applicable to Central DA.
MERGER OF DA AT 50%
Merger of DA equal to 50% of B.P. with Basic Pay
should be done for the executives of CPSEs as
this will help in taking care of pay disparity wrt
CPSEs where wage revision for non-executive is
taken after every 5 years(Due on 01.01.2022).
PERKS & ALLOWANCES
CONTINUATION & EFFECTIVE DATE
Perks and allowances should continue and
the effective date for perks & allowances
should be the same as the date of Pay
Revision i.e. 01.01.2017.

CAFETERIA APPROACH OF 50%

The present system of Cafeteria Approach
of choosing from a set of perks and
allowances within the overall ceiling of 50%
of Basic Pay is satisfactory.
PERKS & ALLOWANCES
ALLOWANCES TO BE KEPT OUTSIDE 50% CEILING
LTC should compulsorily be kept out of the ceiling on perks as it is
linked to fulfilling social needs. Foreign LTC also should be
allowed with monetary ceiling.
FIELD ALLOWANCE(For all executives working in field area
irrespective of discipline.
North east Allowance
Non-practicing Allowance
Officiating Allowance for holding higher post.
Remote area Allowance-
Remote area allowance can be classified
as :

A B
10% in locations less than 15% in
locations more than
400kms from 400kms
from
 PERKS & ALLOWANCES
REMOVAL OF ADDITIONAL INCOME TAX
ON HRR:
For the purpose of levying Income Tax on HRR,
the employees of CPSEs staying in company
provided accommodation should be considered
at par with Government employees staying in
Government accommodation.

The additional Income Tax burden on the

employees of CPSEs comes in the range of 5
15% of Basic Pay. This needs to be taken into
account while deciding pay package for CPSEs
executives.
PERKS & ALLOWANCES
NO MONETIZATION OF
INFRASTRUCTURE FACILITIES
CPSEs create infrastructure such as
hospitals, schools, clubs etc. just to meet the
basic necessities of their employees & their
family members who are compelled to reside
in companys townships in locations where
even basic infrastructural facilities are not
available. Further, these facilities are also
used by the people residing in the
surrounding areas. Therefore, monetization
of infrastructure facilities shouldnt be done
PERFORMANCE RELATED PAY
Present Grade factor of 40% to 200% to be enhanced to 60%
to 300%
Entire corpus amount of PRP should be distributed among all
executives
Total profit to be taken in to account for calculation of PRP
instead of a mix of PBT and incremental profit. Currently 60%
PBT and 40% incremental profit

As per this formula even after having registered profit in

particular financial year if incremental profit is not there, only
60% share of PBT is paid. Due to which PRP in grades E0 to E3
becomes invariably less than ex-gratia paid to non executives.
To cater with this disparity, we suggest:
Not considering incremental profit for PRP calculation
If at all it is considered, 80% of PBT and 20% of
incremental profit to be used.
PRP protection scheme to be introduced i.e., in any case
of eligible executive it should not be less than the ex-gratia
paid to the non-executives.
 PRODUCTIVITY LINKED
INCENTIVE

Should be reintroduced
Should be kept outside PRP
As it acts a motivating factor for employees
in field / project areas
Should be linked to be production only and
no other factor such as sales or profit as
these are beyond the control of employees
BELL CURVE
ABOLISH OF BELL CURVE APPROACH
Adoption of Bell Curve Approach for PRP is grossly
unfair as this is a forced ranking system of
employees which inter alia creates a situation
where a genuine performer is categorized as a
mediocre in order to normalize the distribution
curve. There should be strict distinction between
the performance of an executive for PRP payment
and for promotion.

Rather a two way evaluation system or a balance

score card system with an ultimate aim to motivate
performer and retain the talent should be
introduced.
GRATUITY
Currently paid from provision of
4.16% of 30% (Basic + DA)
guaranteed superannuation benefit.
It should be paid as per gratuity act
without any ceiling and with income
tax exemption
Current scheme of 30% (Basic + DA)
as superannuation benefit to be
increased to 40% of basic + DA with
CPF, pension & PRMB as component
of it.
ENCASHMENT OF
LEAVE
100% leave encashment(EL &
HPL) without any ceiling and it
should be 100% tax free because
accumulation of leaves is an
indication of extra working days
(working without taking leaves).
Further, for Govt. employees
leave encashment is 100% tax
free.
 VOLUNTARY RETIREMENT
SCHEME
CPSEs executives should be allowed
to take VRS without any restriction
particularly during last 5 years before
superannuation. As such, there should
be a provision of standing VRS in
CPSEs with attractive compensation
package. This would also help in
addressing the issue of
career stagnation particularly at
higher levels.
THANK YOU FOR YOUR
PATIENCE