The workers and officers of India’s Central Public Sector Undertakings (PSUs) are facing all-sided attacks from the Manmohan Singh government.  The context is the 7th round of wage negotiations. The government is trying to extend the implementation of the recommendations of the 2nd Pay Revision Committee for Executives in CPSUs (popularly known as the Justice Rao Committee) to all workmen in central government owned industries.

Highlights of Justice Rao Committee Report

Categorisation of CPSUs: One of the key features of the Justice Rao Committee Recommendations is the division of the CPSUs into five categories: A+ [11 CPSUs], A [45], B [51], C [52] and D [57].  According to the Committee, “classification based on income level, size of manpower and geographical spread of companies operations is, therefore, proposed to be used in determining fixed component of compensation….”

This classification is completely anti worker. The worker must be paid according to the value of labour power of a particular skill level or in simple terms, according to what is needed for reproducing such a worker in working condition every day. Where is the question of the size of the company, size of manpower, or geographical spread of the company in determining wages? Why should wages be linked to profitability? When you go to the market to buy something, you pay the same price as others for the same commodity; you do not pay according to the profitability of the seller or the depth of your pocket.  The dual aims of this move are (i) to divide the workers and their organization, and (ii) to restrict wage increases so as to step up the degree of exploitation.

CPSUs in the same industrial sector enjoying the same set of pay scales are proposed to be divided into different categories with different pay scales. For example, in the power sector, NTPC, NHPC and POWERGRID have the same pay scales. But under the proposed new categorization, NTPC is in ‘A+’ while the other two are in ‘A’ category and hence will now have lower pay scales. In the oil sector, Oil India Limited, Bongaigaon Refinery & Petrochemicals, Numaligarh Refinery and Chennai Petroleum Corporation have been placed in a lower category with lower set of pay scales.  Other companies facing lowering of standards include Hindustan Aeronautics Limited, Air India, NALCO, BEL, BEML, Coal India and its subsidiaries, namely SECL, WCL, NCL, CCL, ECL, MCL and BCCL.

Annual Increment: “The Committee recommended that in keeping with the practice followed in private sector, concept of fixed annual increment may be given up and replaced by a flexible increment of 2% to 4% of basic pay, depending upon company’s ability to pay and performance of the individual” Further benefit of promotional increments are also to be decided by the management of individual companies. Within a company the management will be able to use this flexibility to divide the workers, and between CPSUs the Central Government will use the issue of profitability to divide workers.

Flexible pay: Till now, the practice of negotiations of wage settlements in CPSUs has been that once an agreement is reached, it is implemented till the next round of pay revisions.  In opposition to this, the Rao Committee has said, “There is also need to provide enough flexibility in compensation structure so that management can make upward or downward revision depending upon market situation” In other words, the management should have the right or option to reduce the wages of workers citing market conditions. End of centralised wage negotiations. The Committee has asserted in the preface of the Report, “we are the last such committee for deliberating on the remuneration structure in the public sector as a whole and hereafter no such committee will be necessary. Revision can be considered by the Board of Directors and the concerned ministry on both the economic situation and nature of the concerned industry.”  This recommendation is aimed at fragmenting the CPSUs to enable privatization when necessary, as well as smash the whole concept of a common wage settlement for all workmen of CPSUs.

Discarding the present practice of category-wise grade based pay, the Committee has proposed to switch over to individual compensation package to be decided by management. “Board of Directors of CPSUs should decide compensation for different individuals keeping in view affordability of the company and performance of the individual.”

Coopting workers through stock options: In the name of Long term incentive to employees, the Committee has recommended, “the Government should encourage companies to get listed on the Stock Exchange and 10% to 25% of the PRP should be paid as Employee Stock Option Plan.”  A hidden aim behind listing PSUs on the stock market is to prepare conditions for privatisation in one form or another.

Compulsory Retirement: The Rao committee has recommended that VRS should be converted into CRS (Compulsory Retirement Scheme).

The workers of the CPSUs understand that the bourgeoisie and its government are targeting the workers’ unity and fighting capacity. They want to break the back of the trade unions in public sector industries and increase the exploitation of industrial workers, in both public and private enterprises. This is part of the offensive of the capitalist government aimed at lowering the standard of the working class, so as to make India a haven of super-profits for capitalists of the world.

It is a positive development that the workers unions in public sector industry are fighting against these attacks.  It is especially positive that they have resolved that any new wage agreement will include settlement of the demands of casual and contract workers, who today constitute more than half the workforce in the CPSUs.