The increase, which could be as high as 100%, would be performance-linked, based on parameters such as asset monetisation, speed of project execution, profit and other benchmarks. as per the proposal being examined by the Department of Public Enterprises, they said. “The compensation drawn by CPSEs’ top executives is very low compared to the private sector and this is making retaining talent difficult,” a senior official told ET, adding that it has been proposed that the compensation be doubled.
The proposal could be sent for consideration of the Cabinet Committee of Economic Affairs ahead of the presentation of the budget in the latter half of this month, the official said. The performance-linked incentives can be different for CPSEs, depending on the target set by the administrative ministry and their respective boards, according to the official. The proposal entails allowing PSU boards to take such a decision, the official said.
The Public Enterprises Selection Board had also suggested increasing compensation as it was finding it difficult to get candidates for leadership positions. “There is consistent feedback from the PSEB that packages must be lucrative enough to attract the right kind of candidate,” said the official.
The current proposal does not entail a blanket increase in salaries of the CPSE staff, which is a long process that needs wider debate and detailed study, according to the official. The move is part of the government’s broader vision to make the strategic public sector undertakings (PSUs) more competitive, efficient and technology friendly. The NITI Aayog is working separately on increasing the competitiveness of the PSUs.”There will be a multi-ministerial approach to make our CPSEs more competitive,” said another official.