PSU staff may get 10% extra for rural stint

Officials of state-owned companies could get a special allowance if they agree to serve in far-flung areas, helping companies expand operations and banks to reach their services to under-banked areas.

The special allowance will amount to 10% of the basic pay, according to a proposal worked out by the department of public enterprises, or DPE. The incentive scheme has been proposed after some ministries had written to the DPE, the nodal agency for public sector companies, pointing out that employees don’t feel incentivised when they are sent on deputation to distant areas.

The state-owned companies had complained that such posting had also led to attrition in the workforce. “As a state-owned company, our task is to locate resources and set up plants and offices in the region to tap that wealth. However, there is not much employee participation as the incentives are poor,” said a senior official with Bharat Heavy Electricals.

Under the new guidelines issued by DPE, a government employee will be eligible to get a maximum of 10% of the basic pay as special allowance depending on the location.

“The amount is calculated on the basis of the remoteness of the area and the least that an employee can get is 4% of the basic pay,” said a DPE official. Companies will have to finance the special allowance from their own resources and no budgetary support will be provided.

The incentive scheme will allow the government to also push through a mandatory stint for new employees in rural areas. “If the new workforce has a rural stint in the initial years, they would be better equipped in their future roles,” the official said.

In order to provide more autonomy, the government has also given the freedom to the state-owned companies to include any area, which as per their company policy is equivalent to a rural or far-flung posting.

“Companies were earlier bound by a list compiled by us, but with their expanding operations it was prudent to let them decide on their own,” the DPE official said. PSUs, however, will have to take this decision in consultation with their administrative ministry and financial advisors on their board.

As of now, there are 265 central public sector enterprises, with a workforce of over 15 lakh employees.