PRESENTATION ON PAY REVISION FOR CPSUs EXECUTIVES w.e.f. 01-01-2007 BEFORE 2nd PAY REVISION COMMITTEE BY SANCHAR NIG

1. 1 PRESENTATIONONPAY REVISION FOR CPSUs EXECUTIVES�(w.e.f. 01-01-2007)BEFORE2nd PAY REVISION COMMITTEEBYSANCHAR NIGAM EXECUTIVES� ASSOCIATION(INDIA)

2. 2 S N E A (INDIA)WELCOMES Justice M. J. RAO : Chairman Dr. NITISH SENGUPTA : Member Shri. R. S. S. L. N. BHASKARUDU : Member Shri. P. C. PARAKH : Member Dr. R. C. PANDA : Member Shri. K.D.TRIPATHI : Secretary Of 2nd PAY REVISION COMMITTEE

3. 3 SNEA(INDIA) Sanchar Nigam Executives� Association (India) represents about 30,000 executives belonging to Telecom Engineering, Accounts and finance, Civil, Electrical, Architecture, Telecom factories and Administrative wing of Bharat Sanchar Nigam Limited(BSNL). The Association is having its Central Headquarters at New Delhi. The Association is having organizational set up at Taluka, District and State level and is having membership at all metro and major cities and towns, including rural areas. SNEA(INIDA) plays a major role to ensure �continued financial viability� of BSNL by way of continuous interaction with the Management, suggesting strategies and plan of action, from time to time, and also actively involving its members in development, expansion, installation, operation and maintenance of Telecom Network. The Association also plays vital role in ensuring �customer satisfaction�.

4. 4 ABOUT BSNL Bharat Sanchar Nigam limited was formed on 1st October 2000 by corporatising Department of Telecom Services and Department of Telecom Operations. BSNL is fully owned by Government of India and operates throughout the country, except Delhi and Mumbai. BSNL board comprises of Chairman and Managing Director, seven board of Directors, with two nominated from Ministry of Communications, and a Company Secretary.

5. 5 Vision, mission and objectives. Vision. To become the largest Telecom Service provider in South East Asia. Mission. To provide world class state-of-the-art technology, Telecom Services on demand at affordable price. To provide world class Telecom infrastructure to develop the country�s economy.

6. 6 Objectives. To be a lead telecom service provider. Build customer confidence through quality and reliable service. Provide band width on demand. To meet all emerging communication needs of individual and small enterprise and corporate houses. Contribute towards : National plan target of 250 million subscriber base for the country by December 2007 in mobile sector. Broad band customer base of 20 million in the country by 2010 as per broad band policy 2004. Telephone in all villages. Implementation of triple play as regular commercial proposition.

7. 7 STATUS OF THE BSNL BSNL is given MINIRATNA-I Status in spite of the fact that it is fully eligible to get NAVARATNA Status.

8. 8 SOURCES OF DATAData presented in charts and graphs is obtained from DoT and BSNL annual reports.

9. 9 PHYSICAL STRUCTURE OF BSNL The BSNL physical structure comprises of various segments, each having definite tasks to be performed. A brief picture of the same is given here. Telecom Circles/Metro Districts: There are 24 Telecom Circles and two Metro Districts. They are responsible for installation, operation, maintenance and providing various telecom services coming under basic services, cellular services and data services within their jurisdiction.

10. 10 PHYSICAL STRUCTURE OF BSNL Transmission Maintenance Regions: There are 4 transmission maintenance regions, one each for Northern zone, Southern zone, Eastern zone and Western zone. They are to install, operate and maintain transmission systems connected through optical fiber cable, satellite stations, microwave systems. They maintain optical fiber cable used as media for interconnecting transmission systems. They also operate and maintain large Trunk Automatic Exchanges.

11. 11 PHYSICAL STRUCTURE OF BSNL Telecom Project Circles: There are 4 telecom project circles, one each for Northern, Southern, Eastern and Western zones. They are to install large transmission and switching systems, lay optical fiber cables and erect transmission towers. North-East task force circle is exclusively meant for installation of transmission systems, erection of towers, laying of optical fiber cable, in the north eastern states and Assam. I.T. Project Circle: IT Circle Pune takes care of all software related requirements like HR Package, Billing etc.

12. 12 PHYSICAL STRUCTURE OF BSNL Telecom Quality Assurance and Testing and Development Circles: Telecom quality assurance circle is having its operational units in all cities/towns where factories for manufacturing and supplying of telecom equipment and its accessories, meters, OFC cables,drop wire etc are situated. The TQA circle tests quality not only of the finished equipment but also of the components used for the same before giving its approval for use in the field. T &D circle mainly conducts tests of all the installed equipments before making over to the field units for operations. They also test cables meant for local and long distance networks.

13. 13 PHYSICAL STRUCTURE OF BSNL DATA Network Circle: All DATA services right from packet switching public data network(PSPDN), Internet over dial up and lease line, multi-protocol label switching (MPLS-VPN) , broad band and other value added services, E-mail service, web hosting, co-location of web server, Maintaining Network Operation Center(NOC) of NIB2, Disaster recovery NOC at Pune, broad band project-I , MPLS narrow band project-3, Wi-Fi and Wi-Max services are maintained by DNW circle.

14. 14 PHYSICAL STRUCTURE OF BSNL Telecom Factories: There are 3 telecom factories which mainly manufacture certain accessories required for field units. The main items of manufacture are towers, cable jointing kits, coin box pay phone, telephone instruments, SIM cards etc.

15. 15 PHYSICAL STRUCTURE OF BSNL Training Centers: There are 3 main training centers, ALTTC Ghaziabad, BRBRAIT at Jabalpur and NATFM at Hyderabad. These training centers are to impart pre-appointment training for Group �A� and Gr. �B� level officers and, in addition, provide refresher/in service trainings to both group �A� and �B� officers. In addition, there are 11 Regional Telecom Training Centers(RTTCs) and one circle telecom training center in each telecom circle. They also provide pre-appointment training for group �B� officers and refresher/in-service training for all the staff. The data below indicates the total number of employees trained on year to year basis.

16. 16 SERVICES OFFERED BY BSNL Basic Telephone Services Internet Services Data one Leased Circuits Wireless Services Rural Telecom Services

17. 17 Basic Telephone Services Different kinds of services offered are :- B-Fone: fixed line telephone connection with different rental /free call plans. Under �Sulabh� scheme a fixed monthly rental of Rs. 120 is charged without free calls. For rural customers, the rental varies from Rs.50/- to Rs.150/-, based on the exchange capacity. Number of free calls is 75. One India Plan: A fixed monthly rental of Rs.180/- with 50 free calls. The call charges are Re.1/- per 60 seconds to any place in India beyond 50 kms and Re.1/- per 180 seconds to any place within 50 kms. Integrated Services Digital Network(ISDN): The ISDN connections are given under two categories, namely, primary rate access (PRI) 30B+D and basic rate Access (BRI) 2B+D . Both these categories have different rental /free call plans.

18. 18 Basic Telephone Services Centrex: Customers having more than one connection in the same city /town can use this facility to have intercommunications . This facility is having different plan charges depending upon the number of telephones. The calls within Centrex numbers are free of charge. Intelligent Network Services (IN Services): India Telephone Cards, Toll free phone services, Tele voting, universal access number service, premium rate services, revenue share graded basis service, account calling card, virtual private network of land line and Mobile are the recently launched services under IN platform. Public Telephone(PT): PTs are provided to physically challenged people for earning their livelihood through commission paid by BSNL . PTs provide telephone facility for general public for making local/STD /ISD calls.

19. 19 Internet Services Internet under Dialup Access( Sanchar net): This facility has different plans, ranging from 25 to 1000 hours, with different validity periods. The Sanchar net service is prepaid. The service is offered through Sancharnet Card and customer can register on line. ISDN Dialup Access: This facility also has different plans, ranging from 100 to 1000 hours, with 2 years validity. This is also a prepaid service. Internet Leased Line Access: This service is having different plans wherein a customer has to pay fixed annual charges, depending on the Bandwidth and whether it is a non ISP(1:1), Non ISP (1:4) or ISP. Educational Institutions owned / recognized by Central/State Govts. get concession up to 25% on port charges. Net One: It is an instant internet service . It is an account free internet dial up access, based on CLI. In this service, customer will have to pay 10 paise per minute for use of internet, in addition to telephone dial up charges. It is a post paid dial up Internet service. Internet Dhabas: These are provided to facilitate general public to have access to internet services in rural areas.

20. 20 DATA ONE This is a Broad Band data network . It provides 2 types of plans. Home plan and business plan. Both home and business plans have different monthly/annual charges, depending upon bandwidth and amount of data usage. Depending upon the plan opted, customer gets min. 256 Kbps to from max 2Mbps speed. In each case, there is limit to download/upload of data and separate tariff for additional usage. In certain plans, modems are given free of cost by BSNL. Customers have an option to purchase the modem from outside or have it from BSNL on fixed monthly rental.

21. 21 Wireless Services Tarang-WLL-M: This is a mobile telephone with limited mobility within SDCA. The tariff plan is similar to that of b-fone telephone services. The pulse rate for local calls and tariff for STD calls within territorial circle and outside it are different compared to that of landline telephones. The WLL-M is also having ONE INDIA scheme and tariff is Re.1/- per minute to any place in the country. The customer is free to use his own CDMA handset as per specifications. However BSNL provides handset under different schemes. CELL ONE and Excel: This is cellular mobile service having mobility across the country. The service is having both prepaid(Excel) and postpaid(Cell One) facility with different plans, on the basis of which the tariffs for local, STD and ISD calls vary. This service provides SMS facility of 160 characters. It is also having International roaming which is chargeable.

22. 22 Leased Circuits MLLN: Managed Leased Line Network is a leased circuit which is monitored 24 hours on all 365 days centrally at the district level and has different plans, with different annual rental depending on the distance between the two ends and the bandwidth. MPLS-VPN/IP-VPN Services: The two services have different plans, whereas the charges are determined based on the bandwidth. If 5 or more ports are used then VPN ports get discount depending upon the total number of ports. This service is particularly meant for small enterprises and big corporate houses, having their offices / branches located across the country.

23. 23 Rural Telecom Services In addition to provision of telephone connections under b-Fone, WLL-M and cellular schemes, efforts are continued to be made for providing telecom facilities under different schemes for all rural places. BSNL of its own has provided 5.35 Lakhs village Panchayat telephones for the use of public living in rural places. In addition, BSNL, by various agreements with DOT under Universal Service Obligation Fund (USO fund), has provided telephone facilities, both with wire and wireless. As on 31.3.06 nearly 1.5 Crore telephone connections are working in rural areas of the country. Based on agreement with DOT under USO fund, BSNL, as on 31.3.2006, has developed rural telecom network as mentioned below. Village Public Telephone(VPT): As per agreement signed in Nov. 2004, 66,822 villages having a population of more than 100 as per 1991 census have to be provided with village public telephones. This includes 14183 villages to be covered by digital satellite phone terminals since these are remote and far �flung and cannot be covered by any other means of communications. As on 31-3-2006, 24,687 villages out of 66822 villages are provided.

24. 24 Rural Telecom Services Rural Community Phones: As per agreement signed in Sep.2004 24,794 villages having a population of more than 2000 as per 1991 census having no public telephone are to be provided with rural community phones. As on 31-3-2006 , 16398 villages are provided out of 24794 villages. Replacement of MARR Village Panchayat Telephones.: As per agreement signed in September 2003 1,41,233 MARR VPTs as on 1-7-2003 are to be replaced by a land line/WLL telephones. As on 31-3-2006, 104066 MARR VPTs have been replaced by land line/ WLL connection. Rural Household DELs: As per the agreement signed on 15-3-2005 rural household DELs are to be provided in 1267 SDCAs. As on 31-3-2006, 3,43,235 rural DELs have been provided in these specified SDCAs.

25. 25 Role of Executives in BSNL BSNL, a telecom service provider throughout the country, has about 59,421 officers, as on 31-3-07, of which 25,830 are entry level executives, 31,666 middle level executives and 1925 top level executives, comprising of Deputy General Managers, General Managers and Chief General Managers. Total number of 57,496 executives have got permanently absorbed in BSNL. In top level executives, officers belonging to finance, civil, electrical etc. wing have got by and large absorbed, whereas an insignificant number of officers belonging to ITS got absorbed. Majority of ITS officers are yet to get absorbed. The total number of non-executive staff of BSNL as on 31-3-2007 is 2,60,676.

26. 26 Role of Executives in BSNL The executives belonging to the telecom engineering are responsible for complete development/expansion, installation, operation and maintenance of entire telecom network relating to all areas like Switching, Transmission, RF network, Ip network, Out-door network, OFC network, etc. in the country. They have been identified as the� BACKBONE� for the growth of telecom services and are the main �REVENUE EARNERS� of the BSNL. They work across entire length and breadth of the country, including not only metro/major cities/towns, but also in rural, under developed and highly inaccessible areas like North east, Andaman Nicobar islands, J&K, Jharkhand, Assam where insurgency is a challenge always to face.

27. 27 Role of Executives in BSNL The executives of the telecom engineering exhibit extraordinary courage and commitment in restoring and maintaining telecom services during natural calamities like earth quake at Gujarat, Srinagar valley and Sunami affected Andaman and Nicobar islands.

28. 28 Role of Executives in BSNL The telecom engineering executives perform round the clock duties in almost all telephone exchanges, co-axial, microwave, GSM, satellite earth stations and trunk automatic exchanges. They lay and maintain the entire underground local cable network and optical fiber cable which forms major trunk junction network. They work at factory premises for testing and ensuring the quality of the equipment and later, after installation, they do acceptance testing of all the equipments. They work in training centers to impart not only pre-appointment training but also in-service and refresher courses of training. They are also involved in planning and estimation.

29. 29 Role of Executives in BSNL The executives of architecture ensure that the building plans are drawn according to the modern needs relating to technical / administrative purposes. The executives of civil wing ensure that the materials used and the construction work is done as per the specifications agreed upon in the tender documents. The civil executives main job is to maintain the company owned buildings. The executives of electrical wing carryout electrical installations in all newly built company buildings and maintain existing electrical installations.

30. 30 Role of Executives in BSNL The executives of financial wing are mainly involved in budgeting and in assisting the auditing of company accounts, including that by CAG. Their main job is to ensure proper utilization of company funds. They are also responsible in drawing pay and allowances and settlement of monetary claims of all employees. The administrative executives mainly work in corporate office . Their main responsibility is to ensure smooth functioning of corporate office in matters related to creation of posts, recruitments, promotions, transfers and postings, issue of clarifications on administrative and financial matters and holding of internal exams etc.

31. 31 Role of Executives in BSNL The executives working in telecom factories are responsible for production of certain telecom components needed for the maintenance of field units. They also manufacture coin collecting public telephones, tower materials, SIM cards and telephone instruments.

32. 32 Please Note: Even with tough and stiff competition from other operators, BSNL Assets grew by 7614 crores, that is, by 13.6% by the year 2005-06.

33. 33 Chart showing size of Network and Working connections in different area of services

34. 34 YEAR WISE CELLULAR WORKING CONNECTIONS (in Thousands) & REVENUE(in crores)

35. 35 Please Note: Cellular service was launched in Oct.2002. A steady growth in telephone network resulted in a steady growth of working connections After launching cellular services (CellOne) the number of Cellular connections is almost double year after year. In spite of disconnections of Telephones in Basic Services, yet as a whole there is a growth of 8 Million connections as on 2005-06. The Net effect of increase in Telephone Network and working connections is an increase in Income from services.

36. 36 Mobile (Cellular & WLL-M) Services subscriber base ( in Lakhs)

37. 37 Tele density of BSNL per 100 population as on 31st Dec 2006 Urban Tele density : 17.71 Rural Tele density : 2.00 Overall Tele density : 6.04

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39. 39 INCOME Please note: In spite of stiff competition from other operators, the income of BSNL grew, year after year, and by the year 2005-2006, the income grew by 63% over the income for the year 2001-2002, mainly because of: Digitalization of both switching & transmission equipments. Usage of optical fiber cable for trunk & local junctions. Introduction of WLL, cellular, broadband and many other new services. Large scale development and expansion of telecom networks. Elimination of over head wires by under ground cables. Large scale development of rural networks in the form of VPTs, rural community phones, replacement of MARR VPTs, use of WLL systems for wireless communication, revival of household DELs. In-service / refresher trainings for executives for updating their technical knowledge and behavioral and attitudinal training for non-executives. Staff adopting �customer friendly� approach and attitude.

40. 40 Expenditure (in Crores )

41. 41  Expenditure Please note: The expenditure of the company grew year after year and reached 50% more for the year 2005-06 as compared to 2001-02 on account of Steady growth in �operating expenditure� on year to year basis which became 250 % greater in the year 2005-06 as compared to 2001-02. Payment of pay and allowance in IDA scales with effect from 1st October 2000 consequent to permanent absorption of Group�B�, �C�, & �D� staff. Adhoc payment of Rs. 2750/- per month for all ITS group �A� officers working on deputation with effect from 1.10.2000. Payment of pay & allowance in IDA scales with effect from 1st October 2000 consequent to permanent absorption of Group�A� officers of finance, civil, electrical , architechture wing and certain ITS officers.

42. 42 PROFIT (in Crores)

43. 43 Profit Please note: The profit for the year 2002-03 has gone down by Rs. 5000/- crores as compared to 2001-02 on account of , Increase in staff remuneration by Rs. 2500/- crores on account of payment of IDA scales with effect from 1st October 2000 consequent to permanent absorption of group �C�, & �D� staff and payment of adhoc amount of Rs. 2000/- per month with effect from 1st October 2000 for all group �B� staff. Increase in operating expenditure by Rs. 1500/- crores. Increase in expenditure towards depreciation by Rs. 800/- crores.

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46. 46 PAY AND ALLOWENCES OF ALL EMPLOYEES w.r.to TOTAL EXPENDITURE (IN CRORES)

47. 47 EXPENDITURE ON SALARY AND OTHER BENEFITS OF ALL EMPLOYEES AS PERCENTAGE OF TOTAL EXPENDITURE

48. 48 DISPARITY OF PAY SCALES INMTNL AND BSNL Mahanagar Telephone Nigam Limited (MTNL) was formed on 1-4-1984 by coporatising two metro telecom districts, Delhi & Mumbai. Bharat Sanchar Nigam Limited (BSNL) was formed on 1-10-2000 by corporatising the Department of Telecom Services and Department of Telecom Operations. BSNL provides telecom services in the entire country, except the two metro cities Delhi and Mumbai.

49. 49 DISPARITY OF PAY SCALES INMTNL AND BSNL The option for permanent absorption of Group �B� officers in BSNL and MTNL was called simultaneously in October 2003. The Group �B� officers comprise of Junior Telecom Officers(JTOs) an entry level cadre recruited on telecom circles/metro district basis having transfer liability within telecom circles /metro district recruited for. The Sub Divisional Engineers(SDEs) cadre is first promotional grade of JTOs and sr.SDEs is a time bound promotional grade of SDEs. SDEs are all India transferable category. SDEs / Sr.SDEs have been promoted on Adhoc basis to STS scale.

50. 50 DISPARITY OF PAY SCALES INMTNL AND BSNL All officers working in BSNL and MTNL were on deputation on �as is where is basis� till their permanent absorption. The date of absorption was 1-10-2000 for both the PSUs. In the process of absorption, the cadre of Adhoc STS and SDEs were given the choice to opt for BSNL or MTNL. However JTOs had no such choice and as such have to opt to the same PSU in which they were working on deputation. The duties and responsibilities of JTOs, SDEs and Adhoc STS is one and the same in BSNL and MTNL as were in DoT. The conditions of recruitment for the cadre of JTOs is also same.

51. 51 The CDA pay scales of JTOs , SDEs, Sr.SDEs and STS working on deputation in BSNL and MTNL prior to absorption were:-

52. 52 The pay scales of all the officers while working in DoT and later in BSNL , MTNL on deputation were one and the same. All promotions issued by DoT prior to 1-10-2000 were based on combined seniority lists.

53. 53 At the time of absorption, different set of pay scales were given for BSNL and MTNL optees and the same are:-

54. 54 The entry qualification of JTOs remaining the same. The recruitment and training process remaining the same. The rules for vertical promotions remaining same. The duties and responsibilities being one and the same. Yet, the disparity in pay scales prevails, which is causing not only financial loss but also considerable demoralization and demotivation. We request the Respected Chairman and Members of the Pay Revision Committee to kindly decide to end the disparity and accordingly recommend to the Govt. the pay scales of MTNL for BSNL Executives.

55. 55 PROPOSED PAY SCALES, ALLOWANCES & PERKS W.E.F. 01-01-2007. Preamble: With the decision of the Govt. to allow private operators with tie ups with MNCs to enter in telecom sector and its subsequent decision to corporatise the DTS and DTO, BSNL, the newly born PSU, has had to face tough challenges and overcome the cut throat competition to survive and sustain by a steady growth, both in voice and data communication. BSNL having huge highly trained and qualified personnel always has been vulnerable vis-�-vis private sector because of its limitations in terms of providing pay scales compatible with the private sector. Hence attraction and retention of talented executives is an unending challenge till BSNL offers comparatively compatible if not competitive pay packages. We hope that this respected 2nd pay revision committee would accomplish this important task to strengthen the PSU.

56. 56 Role of the Government: The Pay Revision Committee is to recommend revision of pay scales for executives and non-unionized supervisors of CPSUs. The wage revision of non-executives is settled through negotiations at enterprise level. This dual approach will ultimately nullify recommendations of the Pay Revision Committee and create anomalies. Our considered submission in this regard is that the Govt. should only issue broad guidelines, based on the recommendations of the Pay Revision Committee, to each of the CPSU, with instructions to decide pay scales, within these broad guidelines, through negotiations with the respective officers Associations, so as to reach a negotiated settlement.

57. 57 The Govt. should not issue any �Presidential directives� to the Managements of CPSUs in the matter of pay revision of executives since it ultimately affects the interests of the executives and thus de motivates them. The Boards of consistently profit making CPSUs, irrespective of the status of the CPSU, should have autonomy for deciding the pay packages for their executives, depending on their paying capacity, through a negotiated settlement with the respective officers� Association. Role of the Government:

58. 58 Pay Scales, Allowances and Perks: In all realities, liberalisation and globalization has acquired a very strong foot hold in the telecom sector. The latest trend in this direction is permission for allowing 74% foreign direct investment. Naturally, BSNL, a CPSU in the telecom sector, has to face formidable challenges for its continued growth and profitability. BSNL should not be compared with other CPSUs as the degree of competition prevailing in the telecom sector with the private sector, including MNCs, is not only unprecedented but not prevailing in any other industry.

59. 59 BSNL, having proved its �mettle� by sustained growth and profitability, despite continuing severe handicaps and shortcomings, in terms of taking critical policy decisions, relating to its growth, demands a special and exclusive consideration. Its Board should thus be given autonomy to decide its own set of pay scales, perks and allowances. In the existing set of closed end pay scales, all executives in BSNL will continue to stagnate throughout their remaining service on reaching Rs.18,700 in the scale of Rs.14,500-350-18,700. Hence the pay scales should be open ended to prevent stagnation. Pay Scales, Allowances and Perks:

60. 60 The stagnation over a long period of service results in huge financial loss, which in turn causes demotivation, thus inflicting irreparable damage on the productivity and profitability of the CPSU. The ratio of basic pay between the lowest and highest paid employee should be at least 1:10. Justice Mohan Committee also recommended the same ratio. The Pay Revision Committee should recommend pay scales which would match those prevailing in the private telecom companies, operated by Indian/foreign MNCs. Pay Scales, Allowances and Perks:

61. 61 The Pay Revision Committee should consider, while recommending the pay scales, not merely the productivity and profitability of a CPSU, but should decide taking into consideration the severe constraints and conditions under which such profitability and productivity has been achieved. In this aspect, BSNL, telecom CPSU, will definitely stand first. The status of a CPSU like Navaratna or mini Ratna should not have any bearing for determining the pay scales. Pay Scales, Allowances and Perks:

62. 62 i. BSNL, a service provider in telecom sector, provides telecom services in every nook and corner of the country. Consequently, the network is huge and wide spread and the staff to operate and maintain is also large. However, the cost towards manpower is 20% of the total income of BSNL. The ceiling on payment of perks and allowances should be done away with. BSNL Board should be given autonomy to decide the quantum of perks and allowances, based on its operational and functional needs. The date of effect of payment of perks and allowances also should be the same as the date of revision of pay scales, that is, 1st Jan 2007. Pay Scales, Allowances and Perks:

63. 63 Attraction and Retention of Talented People: Fresh engineering graduates coming from reputed engineering colleges and getting selected based on an all India competitive examination conducted by IITs at the behest of BSNL ultimately decline the offer of appointment as Junior Telecom Officers(JTOs), the entry level executives cadre of BSNL. Consequently, BSNL is unable to get the required number of talented entry level executives. The only reason is poor pay package, not only with respect to private telecom companies, but even with respect to MTNL, another telecom PSU. This is adversely affecting the whole recruitment and training plans and also future development plans in BSNL.

64. 64 The only way to bring out BSNL from this precarious condition is to primarily end the disparity in pay packages prevailing between BSNL and MTNL by giving BSNL the same pay packages which are available in MTNL. Secondly, the Pay Revision Committee should recommend pay packages matching those offered by the Private Telecom Companies. The data given below shows the number of entry level executives(JTOs) who did not accept the offer after selection.

65. 65 For retention of the existing executives, the Pay Revision Committee should Recommend open ended pay scales to totally end the stagnation. Recommend to remove ceilings on perks and allowances. Recommend to give autonomy to the Board to negotiate with the respective officers� Associations and decide the pay scales, perks and allowances. Attraction and Retention of Talented People:

66. 66 Relativity The ratio of basic pay between the highest and the lowest paid employee should be at least 10:1. Justice Mohan committee had also recommended similar ratio . The ratio of basic pay between the topmost level and the entry level in the executive category should be 4:1. To attract and retain comparable talents the pay packages of CPSUs should be compatible to those of private companies in the relevant sector.

67. 67 Existing Pay Scales in BSNL

68. 68 Basic pay as on 1-1-2007 The pay scales, which will come into effect from 1st January 2007, have been derived based on the following considerations. The IDA pay scale of 1-1-1997 of Rs.10750-300-16750 (E-2) has been taken as a pay scale for entry-level executive, Junior Telecom officer (JTO) in our case. The multiplying factor for each IDA scale from E-2 to E-9 has been derived by taking the corresponding IDA pay scales prevailing as on 1-1-1987, 1-1-1992 and 1-1-1997 since the periodicity will be 10 years.

69. 69 Basic pay as on 1-1-2007 The multiplying factor, derived from IDA pay scales, in existence as on 1-1-1987 and 1-1-1992, is added to the multiplying factor, derived from the IDA pay scale in existence as on 1-1-1992 and 1-1-1997, and the same is applied for each IDA pay scale for determining the new IDA pay scales to come into effect from 1st January 2007.

70. 70 Basic pay as on 1-1-2007 Example: A) The multiplying factor of 4800 with respect to 3000 is 1.6. B) The multiplying factor for 10750 with respect to 4800 is 2.24. Sum total of A) and B) is 3.84. The above methodology is adopted since IDA scale of Rs.3000 as on 1st January 1987 has underwent revision twice in the year 1992 and 1997 and thus became 10750 in the year 1997.

71. 71 Basic pay as on 1-1-2007

72. 72 Rate of Increment The rate of increment should be on percentage basis so as to ensure that it takes care of the benefits of pay revision from erosion. The rate of increment should be at least 5%. The pay scales should be open ended for preventing stagnation.

73. 73 Pay Fixation The pay fixation in the new pay scales should be on point to point basis to ensure that the senior personnel are not placed in a disadvantageous position as compared to their juniors. This will also help in preventing post revision pay anomalies.

74. 74 Performance related payments The Justice Mohan Committee recommended a limit of 5 % of distributable profits as performance related payments. Though this recommendation should have been extended only to executives, but it was generalised and extended to non-executives also. To make matters straight, this Pay Revision Committee should exclusively and specifically recommend a reasonable percentage of distributable profits as performance related payments for executives.

75. 75 50% DA Merger w.e.f. 01-01-2005 Justice Mohan committee, while recommending pay revision once in 10 years for CPSUs with central D.A., unfortunately, did not recommend merger of D.A. when it crosses 50%. 5th central pay commission has made such a recommendation for central government employees. Consequently, both central government employees and industrial employees following CDA pay scales got 50% of D.A. merged with basic, giving them additional benefits.

76. 76 50% DA Merger w.e.f. 01-01-2005 The justice Mohan committee recommendation for adopting CDA pattern for grant of IDA to all CPSU employees in reality did not bring IDA at par with central govt. employees, but took away the advantage of pay revision once in every 5 years. Even the 50% D.A. merger is denied. Thus the entire lot of industrial employees are put at a most disadvantageous position. Keeping in view the full justification for 50% IDA merger, the Pay Revision Committee should immediately decide to recommend 50% IDA merger with effect from 01-01-2005.

77. 77 Periodicity of Pay Revision Till the last pay revision, which was effective from 01-01-1997, the periodicity of pay revision was 5 years. Justice Mohan committee recommended future pay revision once in 10 years on the ground that in future industrial D.A. will be granted on CDA pattern. The Govt. accepted the recommendation to implement future pay revision once in 10 years for CPSUs. However, granting of IDA on CDA pattern was not fully extended since base for CDA and IDA still remains separate. Because of this, executives in IDA pay scales are put to loss.

78. 78 Periodicity of Pay Revision For example, an executive, whose basic pay is Rs.10750/- as on 1-1-2002 in the IDA pay scale of Rs.10,750-16,750, would have got Rs.14,534/-. On the contrary, his pay in January 2002 would be Rs. 24,100/-, in the event of revision of pay scales having taken place after 5 years, by applying the same proportion as that of 1997. Thus, an executive at the basic of Rs 10750/- in the scale of Rs.10,750-16,750 is faced with a recurring loss of Rs.9466/- in the basic pay throughout his service. Similarly, executives in other pay scales too have to incur loss in the basic pay.

79. 79 Periodicity of Pay Revision Further, if pay revision is once in 10 years, the differences in pay scales appear huge and pay revision committees would find it difficult to justify the same. The net effect of this would be lower pay scales than are actually justified. With the entry of private companies, including MNCs, the competition has become very tough. The executives of better talent in CPSUs, totally dissatisfied on account of lower pay packages, become easy prey to flight of talent, resulting in their exodus to private companies which offer them better and attractive pay packages.

80. 80 Periodicity of Pay Revision 10 years is a long period and, in the context of rapidly changing market environment, CPSUs find it very hard to attract qualified and better talented people, thus endangering their productivity. Hence, there is no justification, from any aspect, for pay revision once in 10 years. As such the Pay Revision Committee should treat this as a priority issue and recommend pay revision once in every 5 years in the larger interest of CPSUs and its employees.

81. 81 Social Security Issues With very high escalations in the cost of living, in the cost of plot/flat, in the cost of education and other social bindings, life is becoming tougher and tougher and it will be highly frightening to imagine life after superannuation, without any social security. Living on meagre interest on savings made in service is next to impossible. It is high time for the Govt. to decide and act, and, as a step forward, the Pay Revision Committee should consider making suitable recommendations on the following issues.

82. 82 Pension On the formation of BSNL, the company is recruiting fresh engineering graduates at entry level of executives. These executives after serving 35 to 40 years find on superannuation that living is very hard without any social security like pension. The pay revision committee should make suitable recommendation for extending pensionary benefits to the executives recruited by BSNL.

83. 83 Gratuity The present maximum limit of Rs. 3.5 Lakhs for payment of gratuity should be removed and in future there should not be any ceiling on gratuity payment. At present, gratuity is paid at the rate of 15 days salary for every completed year of service, subject to a maximum of 33 years of service. This condition is unfair and as such gratuity at the rate of 15 days salary should be paid for all the years of service rendered by an employee.

84. 84 Payment of Interim Relief Since no pay revision has taken place for the past 10 years, executives are facing financial hardships due to loss in their pay packages. To make good the losses, the Pay Revision Committee should consider for granting interim relief. An interim relief of 30% of basic pay may be recommended with effect from 1st Jan 2007.

85. 85 FUNCTIONAL AUTONOMY Pandit Jawahar Lal Nehru, loved and respected first Prime Minister of our country, with clear vision of overall development of the nation, set up CPSUs in different parts of the country for full utilisation of locally available raw material and also to provide employment to local people for economical growth of the country and the growth of socio-economic conditions of the local inhabitants. With change of times, many CPSUs became sick for various reasons. The political thinking also changed from �investment� to �dis-investment�, causing lot of anxiety in the hearts and minds of the employees with regard to their bread and butter. In the name of liberalisation and globalisation, Government allowed private companies, including MNCs, to invest and do business in almost all sectors, including telecom sector. In the bargain, BSNL was formed as a telecom CPSU.

86. 86 The private companies by virtue of their ownership monopoly can take decisions independently and quickly in matters like technology, vendors, employees pay scales etc. The industrialists have access to meet concerned ministers and even prime minister for finding to resolve their problems. On the contrary, the CEO/CMD of CPSUs have to follow preset guidelines in taking decisions on all matters related to technology, vendors, employees pay scales etc. At the maximum they can air their difficulties to the concerned ministers only. In all, there is no level playing ground between private and public sector. The private companies in a particular sector has always an edge over their counterpart CPSU. For all acts of omission and commission, the CPSUs are answerable to other nodal agencies. CPSUs are also answerable to the parliament.

87. 87 In such an environment, where �if done-why done and if not done-why not done� is the attitude, it becomes very much tough for CPSUs to sustain and survive in the world of competition. To begin with, for providing certain flexibility, at least, in the matter related to Human Resource Development, CPSUs should have powers to decide the pay scales, allowances, perks and other benefits of its employees so as to ensure not only the retention of the existing personnel, but also to attract new talent into the industry. Hence the Pay Revision Committee should make suitable recommendation in this regard, enabling the CPSUs to look ahead at least in the matters related to Human Resources.

88. 88 We request the PAY REVISION COMMITTEE to consider and recommend favorably our following major issues. Ending disparity in pay scales with MTNL. IDA pay scales w.e.f 1-1-2007 based on the criterion of multiplying IDA pay scales as on 1-1-1997 by factor ranging from 3.45 to 3.86. Merger of 50 % IDA with Basic Pay w.e.f. 1-1-2005.

89. 89 Autonomy to BSNL Board for deciding pay packages based on guidelines issued by Government. Periodicity of pay revision should be once in 5 years. The ratio of B.P. between the highest and the lowest paid employee should be 10:1. To make IDA and CDA base same. Interim relief @ 30 % of salary w.e.f 1-1-2007. Removal of ceiling on Gratuity and providing proper social security scheme.

90. 90 THANK YOU