xlri compensation

A study of

Estimating Cost to Government

For a government employee

Study conducted by

XLRI

The XLRI Team consists of

Prof. Premrajan

Prof. EM Rao

Prof. Gurunathan L

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Estimating cost to government

Acknowledgements

The XLRI Team is thankful to the Sixth Pay commission for offering their support during

the entire length of the project. The XLRI team also thanks the representatives of all the

government sectors that offered their views and patiently answered the questions the team

asked them. We thank the numerous government employees who participated in the study

conducted by the team to elicit their views regarding the pay mix.

The team is especially thankful to Ms. Madhulika P. Shukul and Ms. Sheela Prasad for

their untiring efforts towards making this study what it is now. The team salutes their

dedication to their profession.

Prof. R. K. Premrajan

Prof. E. M Rao

Prof. Gurunathan L

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ACKNOWLEDGEMENTS..........................................................................................................................2

1 AN OVERVIEW OF THE STUDY..................................................................................................10

2 DELIVERABLES ..............................................................................................................................12

3 METHODOLOGY ............................................................................................................................13

4 COST TO COMPANY –A PRIMER ...............................................................................................16

4.1 PAY AND ITS COMPONENTS ........................................................................................................ 16 4.2 COST TO COMPANY- A WORKING DEFINITION ............................................................................. 18 4.3 PAY LEVELS, PAY DIFFERENTIALS IN THE GOVERNMENT ............................................................ 20 4.4 CONSTITUENTS OF CTC-A COMPARISON BETWEEN GOVERNMENT AND PRIVATE SECTOR .......... 23

4.4.1 CTC to CTG.......................................................................................................................... 28 4.4.2 Pitfalls of the CTC concept................................................................................................... 30

4.5 TOTAL REWARDS AS A GOVERNMENT EMPLOYEE....................................................................... 31

5 CTG-GENERAL CATEGORY........................................................................................................32

5.1 GROSS PAY OF A GOVERNMENT EMPLOYEE ................................................................................ 32

6 COSTING BENEFITS-GENERAL CATEGORY .........................................................................37

6.1 COST OF PENSION ....................................................................................................................... 38 6.2 COST OF GRATUITY .................................................................................................................... 42 6.3 COST OF ENCASHMENT OF 300 DAYS LEAVE .............................................................................. 42 6.4 LEAVE TRAVEL CONCESSION..................................................................................................... 43 6.5 HOUSE BUILDING ADVANCE ....................................................................................................... 44 6.6 VEHICLE AND COMPUTER ADVANCE........................................................................................... 46 6.7 MEDICAL BENEFITS .................................................................................................................... 47 6.8 MEDICAL BENEFITS POST RETIREMENT....................................................................................... 47 6.9 CTG OF GROUP INSURANCE BENEFIT ......................................................................................... 47 6.10 BENEFITS NOT ADDED TO THE CTG ........................................................................................... 50

6.10.1 Cost of leave the employee is eligible .............................................................................. 50 6.10.2 Canteen subsidy ............................................................................................................... 50 6.10.3 Computer at home for certain levels (not in the CTG) .................................................... 50 6.10.4 Car for S29 and above (not in CTG)................................................................................ 51 6.10.5 Ex-gratia (not in CTG)..................................................................................................... 51

6.11 TABLE OF BENEFITS FOR ALL LEVELS (GENERAL EMPLOYEES)................................................... 52 6.12 COST TO GOVERNMENT TABLE BY PAY LEVELS FOR GENERAL CATEGORY GOVERNMENT

EMPLOYEES .............................................................................................................................................. 54

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6.12.1 CTG general category (special functions/geographies) .................................................. 58

7 CTG FOR RAILWAY EMPLOYEES.............................................................................................60

7.1 CONSTITUENTS OF GROSS PAY FOR RAILWAY EMPLOYEES ......................................................... 60 7.1.1 List of allowances for railway employees............................................................................. 60

8 COST OF THE BENEFITS OF RLY. EMPLOYEES ...................................................................61

8.1 RAILWAY PASSES....................................................................................................................... 63 8.2 COST OF PASSES POST RETIREMENT............................................................................................ 64 8.3 RUNNING STAFF (RAILWAYS) ..................................................................................................... 66 8.4 BUNGALOW PEON (NOT IN CTG) ............................................................................................... 67 8.5 CTG OF REPRESENTATIVE LEVELS IN THE RAILWAYS................................................................. 68

9 CTG - ARMED FORCES .................................................................................................................70

9.1 CONSTITUENTS OF GROSS PAY FOR ARMED FORCES.................................................................... 70 9.2 PAY SCALES IN THE ARMED FORCES ........................................................................................... 71

9.2.1 List of allowances for armed forces...................................................................................... 73

10 COST OF BENEFITS FOR ARMED FORCES.............................................................................76

10.1 PENSION FOR ARMED FORCES..................................................................................................... 77 10.1.1 Calculation of Pension for Sepoy..................................................................................... 78

10.2 RATION ...................................................................................................................................... 79 10.3 CANTEEN ................................................................................................................................... 79 10.4 ELECTRICITY AND WATER .......................................................................................................... 80 10.5 CHILDREN CONVEYANCE............................................................................................................ 80 10.6 LTC ........................................................................................................................................... 80 10.7 REIMBURSEMENT FOR HIRING OF FURNITURE ............................................................................ 82 10.8 LEAVE........................................................................................................................................ 82 10.9 HOUSING LOAN .......................................................................................................................... 83 10.10 SAHAYAKS (NOT IN CTG).......................................................................................................... 83 10.11 GROUP INSURANCE BENEFIT (NOT IN CTG)................................................................................ 83 10.12 THE CTG OF ARMED FORCES ..................................................................................................... 84

10.12.1 Table of benefits for armed forces ................................................................................... 84 10.12.2 Table of benefits for PBOR (army) .................................................................................. 86

11 CTG-CPMF........................................................................................................................................92

11.1 CONSTITUENTS OF GROSS PAY FOR CPMF ................................................................................. 92 11.2 RATION ...................................................................................................................................... 94

12 CTG - POSTAL EMPLOYEES .......................................................................................................96

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13 EMPLOYMENT SECURITY & COST OF NO-EASY-EXIT......................................................97

14 EMPLOYEES’ PERCEPTIONS OF PAY ....................................................................................100

15 GOVERNMENT VS. PRIVATE SECTOR & PSUS....................................................................128

15.1 PAY MIX OF A REPRESENTATIVE PRIVATE SECTOR ORGANIZATIONS ......................................... 129 15.2 COMPARISON WITH THE PUBLIC SECTOR .................................................................................. 131

16 RECOMMENDATIONS ON PAY COMPONENTS ...................................................................134

16.1 ANALYSIS OF THE STRENGTH OF VARIOUS CTC COMPONENTS................................................. 135 16.2 EXISTENCE OF STANDARD ALLOWANCES ................................................................................. 140 16.3 PENSION................................................................................................................................... 141 16.4 ARMY CANTEENS ..................................................................................................................... 141 16.5 RAILWAY PASSES ..................................................................................................................... 142 16.6 GRATUITY ................................................................................................................................ 142 16.7 INTEREST SUBSIDIES................................................................................................................. 142 16.8 MEDICAL FACILITIES................................................................................................................ 143

17 LIMITATIONS OF THE STUDY..................................................................................................144

18 ANNEXURE.....................................................................................................................................145

18.1 PREMIUM RATES OF MEDICLAIM POLICIES .............................................................................. 145 18.2 AGE GROUP WISE EXPECTATION OF LIFE IN INDIA .................................................................... 146 18.3 HOUSEHOLD CONSUMPTION/CONSUMER EXPENDITURE............................................................ 149 18.4 PERCENTAGE DISTRIBUTION OF RESPONSES TO SURVEY........................................................... 151

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Index of Tables Table 4-1 : Pay Scales of General category (Civilian) ..................................................... 22

Table 4-2: Constituents of CTC........................................................................................ 23

Table 4-3 : Constituents of standard Pay Package............................................................ 29

Table 5-1: Gross pay Gen. Category Special geographies by cities, grade wise.............. 35

Table 6-1: Pension contribution calculation-an illustration.............................................. 40

Table 6-2: House building advance benefit per month by grade ...................................... 45

Table 6-3: CTG on insurance by amount paid.................................................................. 48

Table 6-4: Group insurance benefit per month ................................................................. 49

Table 6-5: Table of benefits for General category employees.......................................... 52

Table 6-6: CTG (General category) at beginning of pay scale......................................... 54

Table 6-7: CTG for Doctors.............................................................................................. 55

Table 6-8: CTG general category-special geographies..................................................... 58

Table 8-1: package details Railway employees ................................................................ 62

Table 8-2: CTG of Railway passes ................................................................................... 64

Table 8-3: CTG of Railway passes post retirement .......................................................... 65

Table 8-4: Running staff pay scale ................................................................................... 66

Table 8-5: CTG of representative levels in railways in different class of cities............... 68

Table 8-6: CTG of Running staff (railways)..................................................................... 69

Table 9-1: Pay scale of officers of the three forces .......................................................... 71

Table 9-2: Pay scale of PBOR(S) ..................................................................................... 72

Table 9-3: Package of pay, benefits and allowances for armed forces............................. 74

Table 10-1: calculation of pension for sepoy.................................................................... 78

Table 10-2: CTG per month due to ration and canteen .................................................... 79

Table 10-3: Leave travel concession(s) for armed forces................................................. 82

Table 10-4: Table of benefits (armed forces officers) ...................................................... 84

Table 10-5: Table of benefits for armed forces (PBOR) .................................................. 86

Table 10-6: Gross pay for Officers ................................................................................... 87

Table 10-7: CTG of armed forces (officers) ..................................................................... 88

Table 10-8: Gross pay (PBOR)......................................................................................... 89

Table 10-9: CTG PBOR(S)............................................................................................... 89

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Table 11-1: List of components of Pay, allowances and Benefits for CPMF................... 93

Table 11-2: Table of Gross pay by City for CPMF for different class of cities ............... 95

Table 11-3: Table of CTG for CPMF ............................................................................... 96

Table 16-1 CTG as a multiple of Basic: General Category ............................................ 135

Table 16-2 CTG as multiple of Basic pay: Railways ..................................................... 135

Table 16-3 Armed Forces (PBOR): CTG as a multiple of basic pay ............................. 136

Table 16-4 Armed forces (Officers): CTG as a multiple of Basic pay........................... 136

Table 16-5 CPMF: CTG as a multiple of Basic Pay....................................................... 136

Index of Figures Figure 6-1: S1 CTG Pie Chart .......................................................................................... 56

Figure 6-2: S15 CTG Pie chart ......................................................................................... 57

Figure 10-1: Sepoy CTG Pie Chart................................................................................... 90

Figure 10-2: CTG Pie Chart Major/Lt. Cdr/Sqdrn. Leader .............................................. 91

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Introduction A recommendation on pay for any organization requires complete information of present

pay in the organization and information of pay with respect to comparative organizations.

Liberalisation of the economy post -1991 has resulted in major changes in the market.

Consequently, the compensation package of employees in the private sector in India has

witnessed a significant increase. The over-all package offered in the private sector is

worked out on a cost to company basis, quantifying most of the benefits to the

employees. The government employees frequently compare their salaries with the

compensation package in the private sector and government salaries are found to be at

variance with the package offered in the private sector. These variations stem from the

fact that the total package of benefits available to government employees is not taken into

account while making such comparisons. In order to put the matter in perspective and to

enable an appreciation of the total package of benefits to government, a study was

commissioned by the Sixth Central Pay Commission for computing in monetary terms

all the tangible and intangible benefits of government employment. The Study titled

“Estimating the Compensation Package for Government Employees and the Cost to the

Government” has been assigned to XLRI Jamshedpur (here-in-after referred to as

“XLRI”).

2 Scope and Terms of Reference of the study The aim is to study the total cost incurred by the Government for Government employees

in various grades and sectors. The study is to take into account salary, various

allowances as well as the other benefits like housing/HRA, transport facilities/ transport

allowance, telephones, free passes/ LTC, bungalow peons/ orderlies, pensionary benefits,

free rations (where ever applicable), job security and any other benefits, whether tangible

or intangible, provided by the Government to their employees.

The scope of the study is limited to the terms of the reference of the study which are detailed below:-

• To work out the cost incurred by the Government in paying the pay, allowances

and all other benefits whether monetary/in kind (tangible/intangible) to their

employees and to compute cost per employee to the Government in each of the

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pay scales prevailing in the Government for employees who enjoy these benefits

as well as those who do not.

• To work out monetary terms the benefits, whether in form of allowances or in

kind, available to the employees in various sectors of the Government like Armed

Forces, Police, Railways, and Posts and to study the efficacy of these benefits in

meeting their objectives.

• To determine the feasibility of evolving a compensation package that would

compensate all the benefits presently available in various pay scales/ sectors in

purely monetary terms as a more efficient way of compensating the employees.

• To study the monetary value that can be attached to security of job and the

protection under Article 311 of the Constitution available to the Government

employees. Whether this can have any impact on the emoluments payable to the

Government employees given the fact that the extant rules also preclude an easy

exit from a Government job.

The 3-Member Consultancy Team of XLRI was headed by Dr. RK Premarajan,

Professor - OB & PMIR, with Dr. EM Rao, Professor – PMIR, and Dr. L Gurunathan,

Assistant Professor – PMIR, as members. After preliminary presentations by XLRI and

discussions with the Commission, a formal agreement was signed by the parties on

January 9, 2007. XLRI started the study in right earnest, which, in brief, involved the

following steps / stages:

• Preparation and mailing of questionnaire

• Discussions with officials to understand the components of the compensation

package

• Interaction with the Commission

• Study of the compensation systems prevailing in select PSUs and Private Sector

industries/organizations

• Data Analysis and compilation

• Presentation of Draft Report

• Submission of Final Report

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1 AN OVERVIEW OF THE STUDY The very title of the study assigned to XLRI is self-explanatory as to its contents. Even

so, it is considered expedient to give a brief outline of the factors involved. Perhaps, for

the first time in the history of Government of India, the concept of Cost to the Company

(CTC), which is in vogue in private sector is sought to be infused into the compensation

system. This is a welcome trend. CTC or, more appropriately, in the Governmental

context, Cost to Government (CTG) refers to, and includes, the total cost incurred by the

government vis-à-vis each employee in respect of salary, allowances, other

monetary/non-monetary benefits, and perquisites of every shade and hue, whether

tangible or intangible. Simply presented, CTG represents the total out-go per employee.

Even where a particular benefit does not come into the pocket of the employee as

monetary income because of its admitted intangibility, it is nevertheless a cost to the

government in monetary terms. At a time when the general tendency of employees is to

compare their emoluments with those obtaining in other comparable concerns in the same

sector or other sectors of economy, and draw, more often than not, adverse inferences

about their own, the CTG concept helps in a large measure to clear the employee

misconceptions about the perceived external inequity. Thus, the CTG concept is

essentially geared to give the accurate information about the gross expenditure incurred

by the employer relative to each employee and thus enhance his/her satisfaction level.

It is an acknowledged fact that fixation of salary structure is the most difficult task, be it

for an employer or for an adjudicator. Revision of the existing compensation structure in

a competitive and dynamic context is even more difficult. We have encountered serious

difficulties while attempting to reconcile the highly divergent compensation and benefit

systems prevailing in different services of the Government. The range and variety of

monetary allowances and non-monetary benefits in different services as, for instance,

Armed Forces and Railways is complex. The problem is further compounded by the fact

that the total number of allowances in vogue are on the higher side of two-digit figure in

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so far as they are not payable to all employees across-the-board in the respective services,

but are compartmentalized in terms of grade, job title, position and place of posting. It

follows that, in such a dispensation, the task of averaging is not an easy proposition. The

perceptions of employees towards these allowances and benefits are mixed in that the

different Teams belonging to different sectors, employee’ perceptions were highlighted

rather grudgingly by the participants. Pay is a relative concept and, as already stated

above, how well an organization is paying depends to a large extent on the angle of

vision of the employees and the selective comparisons they make. The first step in

comparison exercise is the availability of concrete data in a form that enables

comparison. This study attempts to arrive at such a format. The format of pay in the

government which has a multitude allowances and benefits needs to be re-arranged and

converted to numbers in terms of monetary values to arrive at the format. This format is

popularly called cost to company. The study awarded to XLRI focuses on calculating the

cost to government for employing the government employees. As a consequence to

costing, the study takes a hard look at the Pay mix, making recommendations on their

efficacy based on employee responses and data from private sector organizations. The

ultimate objective of the study is to facilitate the Commission to arrive at a meaningful

pay related recommendations. The major focus of this study is to calculate the cost to

government for every pay-scale of the government and the various sectors. Apart from

the main objective, this study also tries to get views regarding pay from the internal

customers’ perspective viz. the employees and the comparable private organizations

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2 DELIVERABLES

• To compute cost to government for the compensation given to government

employees focusing on the entire direct cash component they receive at each

level/pay grade

• To compute cost to government for all the benefits and allowances given to

government employees in the various sectors at each level/pay grade (focusing on

both the tangible and intangible)

• To study the efficacy of all the benefits and allowances given to the government

employees across the various sector and suggest alternatives

• To compute cost to government of all the benefits offered to sectors like Armed

forces, Police, Railways, and Posts and study their efficacy

• To determine the feasibility of evolving a compensation package that would give

all the above mentioned benefits at a more efficient way

• To suggest the feasibility and the advantage of monetizing the benefits (either

fully or partially) and giving government employees either a cash rich

compensation or an all cash compensation package

• To assess the monetary value that can be attached to the security of and the

protection under Article 311 of the constitution of India available to the

government employees and their impact on compensation

• To estimate the cost of “no-easy-exit” rule with respect to its impact on

compensation

The study should not however be misunderstood with respect to the end it promises to

serve. The study does not make any recommendations with regard to how much pay

should be increased. The study is not intended to facilitate the pay commission with

respect to what extent pay should be increased. However, we do share data from private

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organizations and also make recommendations with respect to continuance of a particular

allowance or benefit.

The study also does not intend to discuss cost of employing a government servant and the

benefits accruing of employing him/her. The study discusses only the cost of

employment. The objective of this “costing” is to get a true picture of pay, so that before

going for any modification, the commission knows the complete picture of pay with all

its details.

3 METHODOLOGY The study has the following objectives:

1. Estimating gross pay for each level

2. Estimating cost to government by pricing benefits, for each level

3. Estimating the feasibility of designing a compensation package that focuses more

on the cash part and less on the benefits aspects thus also focusing on the job

security angle and cost of no easy exit

4. Defining the term “cost to company” or CTG both inclusively and exclusively.

5. Determining what components comprise gross pay by drawing comparison with

the practices prevailing in private sector; and excluding from there the special

components of pay that are applicable to a few employees.

6. Computing gross pay for different levels in the hierarchy and various sectors, i.e.,

CPMF, Railways, Armed Forces, and so forth.

7. Adding the monetized value of all the benefits received by the government

employees.

Explanation – I:

The benefits offered by the government are many. Some are included in the CTG and

some are not. The convention followed by private sector gives a broad idea as to what

should be included items in the term “benefits”. For some of the items we adopted a

judgmental approach while including and excluding certain benefits in the CTG. The

methodology used in calculating the monetized value has been explained in the Chapter

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on “Costing of Benefits”. The final picture emerging out of this exercise is the CTG for

different levels and grades.

Explanation – II:

The next part of the study focuses on the efficacy of the pay mix, which is best found by

obtaining the feedback from the recipients. For this purpose, we have administered a

questionnaire (appended in the appendix) for getting responses from various categories of

government employees. While we have incorporated the key findings of the survey

results at appropriate sections, the detailed analysis of the survey instruments follows in

the later sections. The other way to focus on the efficacy of the pay mix is to see if

comparative organizations continue to use some of the items and the weight they give to

those items. We have done this by focusing on a few private and public sector

organizations. The methodology is described below diagrammatically.

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Estimating cost to government and recommending the possibility of redesigning the package

Calculating cost of compensation starting from calculating gross pay for every government employee (with specific reference to railways, the armed forces and the CPMF)

Add the cost of benefits to the gross pay to arrive at cost to government

Design an instrument to measure the level of satisfaction with existing pay and its components

Take responses from all the four categories (general, railways, armed forces and CPMF) to get information on efficacy of the benefits

Recommend on the Feasibility of designing an alternative package

Arrive at a definition of cost to company and adapt it to the study

Compare pay with private sector and public sector organizations

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4 COST TO COMPANY –A PRIMER

We begin by looking at what is pay and what are the various components in pay. We then

define “Cost to Company” or, say, “Cost to Government”. However, these two terms are

being used in this report interchangeably.

4.1 Pay and its components

The term compensation signifies the remuneration paid by an employer in return for the

services rendered or result produced by the employee. It is the consideration that flows

from the employer. The consideration from the employee flows in the form of his/her

willingness to serve and produce a given result. Compensation traditionally meant cash

payment and other monetary and non-monetary benefits. The expression ‘benefits’ takes

into its fold several tangible and non-tangible facilities and benefits that an employee is

entitled to under the contract of employment and the conditions of service applicable to

him/her. For the sake of clarity and convenience, we can categorize the “total returns” an

employee receives into two categories of returns viz. “transactional” and “relational”

returns. Transactional returns are those returns – monetary and non-monetary - that the

employee is entitled to perennially. To illustrate, the basic pay, dearness allowance, house

rent allowance, city compensatory allowance, conveyance allowance, etc., and all the

intangible benefits fall under this category.

“Relational” returns refer to those which satisfy those needs that are not necessarily

monetary in nature. The returns satisfy the self-esteem and self-satisfaction needs of the

employees. These include, for instance, the pride of association with an organization, job

challenge and satisfaction, opportunity for learning and advancement, the sense of being

part of a nobler cause (in case of some organization), job security and so on. Though

organizations want to give both kinds of returns in generous proportions, there are

enough constraints forcing them to focus on a judicious mix of both. It so happens that, in

some cases, these two returns do not co-exist, though there is no inherent contradiction

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between them. Organisational culture, market forces, competition, need for continuous

innovation and creativity, are some of the determinants as to the co-existence or

otherwise of these two kinds of returns. The appropriate mix of the two kinds of returns is

an important pre-requisite for assessing the concept of CTC. Viewed in this perspective,

the concept of CTC per se refers exclusively to “transactional” returns. Relational

returns are a bundle of employees’ perceptions as discussed above. It therefore follows

that CTC is not an exclusive determinant of Relational returns. The fact that employees

quite often prefer to remain with an organisation for long years and work with the same

zeal and enthusiasm even when the Transactional returns are not comparable with what

their counterparts in a different sector are getting, explains the importance of Relational

returns. It is equally important to note that if the Transactional returns are too low to meet

the needs and wants of employees, a heavy dose of Relational returns would be of no

avail either to retain the employees or, when so retained, to motivate them to reach higher

levels of performance.

Pay has three components. The first is the basic pay or the pay for the position. The

general attributes of basic pay are: a scale, a range and a rate of increment. Scale of pay

for a given grade is distinguishable from that applicable to other grades. Range refers to

the minimum (starting point) and the maximum (ending point) of the basic wage. Rate of

increment is the monetary increase given in the basic pay on an annual basis (based either

on time or performance and usually both). In a close-ended scale of pay, the employee,

having reached the maximum of the scale, would not be entitled to any further annual

increment, and thus faces monetary stagnation. The second component is allowances.

Allowances constitute the additional compensation which addresses specific needs or

hardships faced by the employee in his life’s journey as, for instance, rising cost of living,

house rent, conveyance, education, etc. The third component comprises benefits, which in

contrast to allowances, are paid in kind as, for instance, medical benefits, free

refreshments, subsidized lunch, etc. These benefits are ‘intangible’ as they do not go into

the pocket of employees in cash, but all the same constitute expenditure for the employer.

Reverting to the Relational returns, a typical government employee undoubtedly feels

proud of being part of the government, which implies serving the nation. This is a

significant Relational return. Relational returns cannot be taken for granted and many

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organizations might not give many of the relational returns discussed above. For example

an organization that is the highest payer in the industry might be having no or little

Relational returns, i.e., work-life imbalance, focus only on task accomplishment with

little concern for people, etc. While Transactional returns can be monetized, Relational

returns cannot be or, at any rate, putting a price tag on them is very difficult in so far as

any attempt to do so turns out to be a subjective exercise susceptible to differing

perceptions. What the organization perceives as valuable need not necessarily be so from

the standpoint of the employees. Some employees may value job security very much

while others may not. This makes pricing of relational returns a near impossible task.

Nevertheless, given that monetary aspects can be easily matched by competition,

Relational returns assume importance as a critical determinant of external equity in its

comprehensive connotation. This is the area where every HR manager concentrates his

maximum efforts.

4.2 Cost to company- a working definition

“Cost to company”, a term that is freely used but not clearly defined includes all the cost

that goes into employing one employee. This includes the cost of hiring, pay, benefits,

bonuses, insurance premium and cost of training and development. CTC focuses on how

much it costs the organization to employ an employee at a given level. CTC is computed

as a cost incurred per annum. It does not indicate the extent to which the package benefits

the employee. It only tells what it costs the company, with a sharp bias in favor of

Transactional returns to the exclusion of Relational returns. Further, it takes into account

only variable cost per annum per recruit. However, the fixed costs (one-time expenses)

associated with advertisement, to and fro expenses, interview and selection expenditure,

sign bonus, etc., are not taken into account while arriving at the CTC. Similarly, the

costs incurred in running the business are also outside the scope of CTC. General costs

incurred for running the business/establishment as, for instance, the cost incurred by the

company towards water, power, maintenance of establishment, etc., are not included in

the CTC, even though the employees do use them while in office. In striking contrast, the

cost of serving refreshments, etc., is added to the CTC. From this discussion, the one

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underlying principle that emerges is that in order for a cost to be included in the CTC, it

should be a recurring cost and incurred by the company in its efforts to retain the

employee. Viewed thus, the pre-employment expenses are excluded.

In the following paragraphs, the components and the quanta thereof that go into CTC

have been enumerated illustratively.

At this stage, it is pertinent to raise and answer a couple of questions before proceeding

further. The first is: “whether CTC takes into account the negative aspects of the Job?”

The answer is a firm “no”. Its vision is one-sided and is concerned with what is incurred

by the employer, whereas a typical employee may not exclusively look at CTC, while

evaluating the likely returns from the job. A comprehensive assessment may enable

him/her to identify and weigh the positive and negative aspects of the job before taking a

decision to “sign-up” or not. This assessment by the prospective employee is subjective

in so far as it is propelled by his/her likes, dislikes, preferences and so forth, which may

differ from one person to other. The second question is: “why should we depend on CTC

to attract prospective employees?” Before answering this question, it should be

remembered that there was no CTC as a vital component of selection process up to the

mid-1990s. It found its way into the recruitment process in the wake of globalisation and

increasing competition. The past one decade and half witnessed the frantic efforts of

employers vying with each other to attract the best technical and managerial talent

available in the country. This competition led them to demonstrate that what they incur

per employee is more than their competitors and thus influence the prospective

candidates to opt for their organisation in preference over others. This partly answers the

question. The remaining part of the answer is furnished by the fact that a fresher

graduating from a B-school may not be able to evaluate or judge what is meant by

various benefits offered by the company within a few minutes in the course of Campus

Recruitment Programme and how the benefits affect his emoluments. Secondly, the cash

(salary) component by itself may not reveal the whole story as to what is the magnitude

of parallel benefits and facilities offered by the company. It is an exercise geared to

present a comprehensive picture of the myriad of benefits offered along with cash

components and highlighting the attractive features of the total offer. Then the third

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question is: “why should there be so many components in the pay packet; why not one

consolidated amount which takes into fold all the allowances?” One fundamental reason

for having components such as HRA, CCA, CA is that the amount pumped into these

components does not attract indirect costs for the employer by way of Provident Fund

(12% of basic + DA), Bonus (8.33% - 20% of Basic + DA), Gratuity ( 5% of Basic +

DA), etc. In addition, while calculating other benefits like leave encashment, etc., only

Basic and DA are taken into account. In other words, these components in the pay packet

(other than Basic Pay and Dearness Allowance) operate as a cushion for the employer to

reduce his indirect costs, while at the same time satisfying the need of the employees for

more cash in hand at the end of the month. Yet another reason is some of these

allowances and benefits get some tax concession, which goes to the advantage of the

employee. For instance, re-imbursement of conveyance expenses, medical expenses, etc.

Even HRA is eligible for tax concessions, subject to certain restrictions. The interest

component on housing loan is likewise an allowable deduction for the purpose of tax.

This explains why, in the current context, many organisations have similar components,

and many in number, in the pay packet.

4.3 Pay levels, pay differentials in the government

Organizations usually determine pay differentials in a hierarchical order. The complete

list of jobs is categorized into a few pay grades. In Government, for example, a few lakhs

of employees holding different positions have been classified under 34 Grades for the

purpose of determining the scales of pay, and so is the case with Railways. A new recruit

is fixed at the minimum of the scale applicable to him. In Government, time is used as a

proxy for learning and hence each employee progresses in the pay range with time. The

pay differential between two successive scales of pay in industry, measured at the mid-

point of the scale, shows that the pay differential between two pay scales/levels. India

ranges from 2 % at the lowest to a staggering 22% at the highest. Usually pay

differentials in India are in the 12.5-15% range. Pay scales are usually close to 20% from

the mid-point (on either side) in lower to middle levels, whereas they can reach 30-60%

of the scale in the senior management levels. The pay scales in Government satisfy these

industry practices to a large extent. The lowest grade spreads only 11% on either side of

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the pay scale, while the next grade is spread 15% on either side of the mid point. Most of

the grades then spread across at 20% on either side of the midpoints. Quite naturally, as

the Grade increases, the span of the scale shrinks progressively before becoming a fixed

pay at the highest level. It is recognized that the government has created positions at

some levels with a minimal increment where the position has taken precedence over pay

differential and pay range. These positions were hence ignored in the analysis.

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Table 4-1 : Pay Scales of General category (Civilian)

S.No. Post/ Grade Revised Scales (From 1-1-1996)

1. S – 1 2,550-55-2,660-60-3,200

2. S – 2 2,610-60-3,150-65-3,540

3. S – 2 A 2,610-60-2,910-65-3,300-70-4,000

4. S – 3 2,650-65-3,300-70-4,000

5. S – 4 2,750-70-3,800-75-4,400

6. S – 5 3,050-75-3,950-80-4,590

7. S – 6 3,200-85-4,900

8. S – 7 4,000-1,000-6,000

9. S – 8 4,500-125-7,000

10. S – 9 5,000-150-8,000

11. S – 10 5,500-175-9,000

12. S – 11 6,500-200-6,900

13. S – 12 6,500-200-10,500

14. S – 13 7,450-225-11,500

15. S – 14 7,500-250-12,000

16. S – 15 8,000-275-13,500

17. S – 16 9,000 FIXED

18. S – 17 9,000-275-9,550

19. S – 18 10,325-325-10,975

20. S – 19 10,000-325-15,200

21. S – 20 10,650-325-15,850

22. S – 21 12,000-375-16,500

23. S – 22 12,750-375-16,500

24. S – 23 12,000-375-18,000

25. S – 24 14,300-400-18,300

26. S – 25 15,100-400-18,300

27. S – 26 16,400-450-20,000

28. S – 27 16,400-450-20,900

29. S – 28 14,300-450-22,400

30. S – 29 18,400-500-22,400

31. S – 30 22,400-525-24,500

32. S – 31 22,400-600-26,000

33. S – 32 24,050-650-26,000

34. S – 33 26,000 FIXED

35. S – 34 30,000 FIXED

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4.4 Constituents of CTC-a comparison between government and private sector

The pay in the government sector has the following components. The table below shows the components and what they pay for Table 4-2: Constituents of CTC

Component What it pays for Mode of determining monetary value in the government

How the “Private sector” determines the value

Basic pay It is that pay associated with the position.

The pay commission arrives at pay scales for all the levels.

The various jobs have to be “evaluated” for their “relative worth” in comparison to other jobs to arrive at a hierarchy. Then using comparative organizations’ pay, the basic pay for the position is arrived at.

Annual increment & pay scale

Pay increases annually in the prescribed pay scale.

The increments in government are time based.

The private sector uses performance as a measure of deciding the pay increase. The pay increase quanta is a function of the organization’s compensation strategy, as it decides how much to increase the pay by and how important compensation is in the over all HR strategy of the organization Pay increase in the private sector also takes care of “inflation” “increase in significance of the job over the last year” “Demand and supply considerations” for the job in question.

Dearness allowance Cost of living adjustment Using a base year, and the consumer Private sector does not have this

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(inflation) This component is given in addition to the base pay and varies as per an approved formula.

price index, increases to the price index are compensated in equal measure. Reflected in pay as a percentage of basic pay. At the time of calculating the cost to government (1-1-2007) DA is 35% of Basic plus Dearness Pay.

component, but increases in basic pay reflects increases due to “inflation”

Dearness pay That part of dearness allowance which is merged to the basic pay. Generally when dearness allowance reaches 50% of basic pay it is merged with Basic and treated as basic pay for all calculations

A component that is in place only since 1-4-2004. A considerable benefit to the employees since most allowances (and retrial benefits) is usually calculated as a percentage of the basic pay. Technically a merging of dearness allowance as dearness pay does away with the need for a separate increase in pay by creating a self adjusting system of pay increase (though it does not take care of pay increase in comparative organizations)

House rent allowance (HRA)

A component of pay that is paid to take care of housing needs; Those government employees who get government accommodation are not eligible for HRA.

House rent allowance is calculated as a percentage of base pay depending on the classification of the city

The private sector follows a similar approach. Roughly it is 40% of basic pay, though it can go as high as 60%.

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City compensatory allowance (CCA)

A single rate of DA is calculated for the whole nation; CCA takes care of inter-city differences in cost of living (expensiveness).

In the government pay scale however it is a standard amount and not calculated as a percentage of basic pay.

The private sector uses City compensatory allowance to normalize pay across metros and non metros. It hence takes a huge weight at higher levels of hierarchy.

Transportation allowance

Money paid towards conveyance expenditure incurred in traveling to office and back

A standard amount based on class of city.

Conveyance allowance in Private sectors usually is a percentage of pay, and/or reimbursable with respect to fuel expense and maintenance of vehicles.

Special allowances • Special

Allowances related to functions

• Risk related allowances

• Allowances related to geography

Hardship allowance paid for posting in “difficult to live areas” (viz. Northeast and Andaman and Nicobar Islands). Usually a geography specific allowance

A unique component in government pay that takes care of transfers across the country. Hardship areas are identified and categorized and a fixed amount is given as compensation. The armed forces are in receipt of some unique hardship allowances owing to higher altitude, field areas, etc. and some function related allowances.

Reimbursement of tuition fees (of Children)

A fixed amount paid to reimburse partially the education expenditure for two children

There is hardly any education allowance except for workers which is similar to the government’s reimbursement structure. Higher levels in the hierarchy may get allowances to educate their children abroad (in lieu of other allowances viz. conveyance allowance)

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LTC The government reimburses money spent on travel with family. The reimbursement is pay scale dependent which increases as pay scale increases but only actuals are reimbursed

In a block of four years either two journeys to home or one journey to home and other anywhere in India.

LTC is en-cashable viz. LTC amount is part of pay; either the employee avails of the benefit and is reimbursed fully (based on pay-scale and class of travel) or the employee takes the money in cash (and pays income tax on it).

Advances Government gives loans to employees to build houses and buy vehicles, computers

The employees have to repay the loan in simple interest and hence is a cost to the government

Private sector too provides subsidy which it adds to the compensation package

Pension Deferred compensation; Government guarantees a “defined benefit” pension to employees and their family for those recruited before 1-1-2004 and all armed forces personnel irrespective of date of joining.

By deferring compensation today, one is assured of a defined benefit which is typically 50% of the pay-scale the employee is retiring in if he/she has rendered 33 years of service.

Pension is absent in the private sector except for a couple of organizations. But Private sector has EPF, where employer contributes 12% of basic+DA. Which is shown as part of CTC

Gratuity The government awards employees for associating themselves for a long time with the government; Gratuity is a statutory benefit

It is calculated as 16.5 times (assuming 33 years of service) the basic pay Plus DP+DA at the time of retiring or 3.5 lakh Rs, whichever is smaller

A component that is brought into the CTC by focusing on the annual cost incurred by the organization to give gratuity to the employee after five years.

Leave encashment Government employees can en-cash their unutilized leave subject to a maximum of 300 days

Private sector usually does not have this component

Group insurance Benefit

Employees contribute to a fund that gives benefit of savings and return.

30% of their contribution goes to an insurance fund.

Organizations contribute to group insurance on behalf of their employees.

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Provident fund Contribution by the employee to a fund where contribution and withdrawal are regulated

Government employees have the GPF (general provident fund scheme) where the employees have to contribute a minimum of 6% of their BP+DP+DA

All private sector organizations have a EPF scheme where the employee contributes 12% of BP+DP+DA and the employer tops it in equal amount.

Bonus and incentives Variable pay contingent on performance of either the individual, team or/and the organization

Almost all government employees receive some kind of non-productivity linked bonus. Running staff in railways have their pay tied to their performance

A very notable feature in the compensation package. Depending on the level in the organization variable pay form a minimum of 10% of CTC and go upto 50% of CTC.

Canteen subsidy/reimbursement

Reimbursement of lunch and snack expenditure

Many Government employees are in receipt of subsidized food at their offices though the exact nature of subsidy is not clear.

Organizations reimburse a fixed amount, or tie up with leading eating outlets or outsource their food courts to recognized brands; there are coupons distributed by third parties that can be used in major restaurants making management of this expenditure easy.

Washing allowance Allowance for employees who adorn special uniforms in the work place

For those employees that have to wear uniform in the work place government gives a washing allowance

Similar to the way government gives washing allowance

Medical benefit Usually given in the form of reimbursement (upto 15000 Rs per annum) and as a insurance for employees and their family

Government authorized doctors/government hospitals treat employees without taking any fee. Government employees in the general category pay a fee every month to subscribe to the CG health Scheme.

Organizations pay a medical insurance premium that covers the employees and their family (ranging from a cover of 2,00,000 Rs to 7,00,000) apart from reimbursing medical bills/prescriptions up to Rs. 15,000 per annum

Training and Development

Organizations that sponsor employees’ education sometimes add the cost to the CTC

Government also sponsors employees for training and obtaining higher qualifications. Employees can also avail leave with full pay. But the

Some organizations who sponsor education programs that lead to a certificate/diploma/degree do add it to the CTC especially if the

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amount is not added to CTG certificate/diploma is perceive to give an immediate gain to the employee and a long term gain to the employers

4.4.1 CTC to CTG

The understanding of the Term CTC is adapted for our study, to calculate CTG i.e. cost to government for the work performed by one

employee based on pay level. Since there is no standardization in terms of what gets added to the CTC, we have decided on a set of

components that go into the CTG. Basically they take the form of pay allowances and benefits. Pay would be basic pay+ Dearness pay.

Allowances include, dearness allowance, House rent allowance and city compensatory allowance and transport allowance. To this we add all

the benefits namely, children education assistance, LTC, HTC, pension, newspaper, telephone gratuity, Housing loan subsidy, vehicle loan

subsidy, computer loan subsidy and leave encashment. Non productivity linked bonus or productivity linked bonus is also added as a

component of CTG. This set of items constitutes the cost to government.

The costing has been done “conservatively”, i.e. though we have included gratuity, housing loan subsidy, vehicle and computer subsidy, we

have taken into account all these and more without taking into account the administrative costs that the government incurs in administering

these benefits. The human resources required to manage these schemes have not been added to the costing of these benefits. We also

understand that the government certainly is not the most efficient machinery when it comes to managing all these benefits. Thus the cost of

the benefits in the following sections is actually much more than what we have calculated.

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Table 4-3 : Constituents of standard Pay Package

CTC A Gross pay B Benefits C Variable pay Standard package

Basic pay Dearness pay Dearness allowance HRA CCA Transport allowance

Telephones Newspapers Children education assistance Leave travel concession/Home travel concession Pension gratuity leave encashment home loan subsidy, vehicle loan subsidy, computer loan subsidy Group insurance Medical Facilities Computer at home at certain levels

Non-productivity linked bonus or productivity linked bonus wherever applicable

Package for special functions

A+B+C as above + any of the following or some of the following Washing allowance Over time allowance Non practicing allowance (doctors) Nursing Allowance (nurses) Conveyance Allowance (higher rate for doctors) Cash Handling Allowance Split Duty Allowance

Package for special geography

A+B+C as in the first row + any/some of the following: hill compensatory allowance Island Special allowance Special Duty Allowance Special Compensatory Allowance (Remote Area, Border Area, Hard Area, Tribal Area Allowance Bad Climate Allowance)

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4.4.2 Pitfalls of the CTC concept

While the CTC, as already stated in the preceding paragraphs, enables an easier understanding of the pay package it has its own

disadvantages. It annualizes certain costs which, by definition should not be annualized. For example, the annual cost of contribution to a

fund that shall give gratuity to an employee five years from now, assumes that he/she will stay for five years. If he/she does not stay for the

minimum five years the employee does not stand to benefit from gratuity even though his/her annual CTC shows an amount contributed to

gratuity Variable pay, performance bonus etc. are added at its maximum level thereby distorting the actual CTC a typical employee would

receive. In the following section we calculate the CTG of each category starting from the general category.

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4.5 Total rewards as a government employee

In the previous sections we discussed that the total rewards a person gets by working as

an employee of an organization involves both the CTC (transactional benefits) and the

relational benefits. The relational benefits in the government are different for different

people; but roughly the list blow would be acceptable to most of the employees.

1. Employment security

2. Respect in the society

3. Balance between work and life

a. certain sections in railways and many sections of the armed forces do not

have the above mentioned benefit

4. Opportunity to be part of the larger cause of serving the country

5. Variety in job profile

The relational returns could be many more; Employment security alone is a benefit that

can be of huge value to many government employees. The total reward in being a

government employee includes both the transactional rewards (cost to government) and

the relational rewards of which a few are listed above.

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5 CTG-GENERAL CATEGORY In this section we calculate the CTG of the general category government employees. The

section has two sub sections, the first being calculation of gross pay and the second being

calculation of CTG where cost of benefits are added to the gross pay.

5.1 Gross pay of a government employee

The methodology section listed the gross pay of the government employee. Accordingly,

the gross pay is arrived at adding, basic pay, dearness pay, dearness allowance; house

rent allowance, city compensatory allowance and transport allowance. The gross pay for

each level is given below. Please note that, the calculation is at the beginning of each pay

scale. Usually pay for each pay scale is calculated at the mid point of the pay scale. But

since the government pay scales have varying ranges across the various sectors the

beginning of the pay scale makes more sense. Table 5-1: Gross pay general category at beginning of scale for different class of cities, grade wise

A1 class of city

A class city B1 class city

B class city

C class city

Unclassified City

S1 6,536 5,933 5,878 5,848 5,526 5,430

S2 6,760 6,123 6,048 6,013 5,654 5,556

S3 6,859 6,213 6,138 6,103 5,739 5,640

S4 7,106 6,438 6,363 6,328 5,953 5,850

S5 7,849 7,113 7,038 7,003 6,594 6,480

S6 8,320 7,540 7,455 7,395 6,915 6,795

S7 10,300 9,340 9,255 9,195 8,625 8,475

S8 11,538 10,465 10,380 10,320 9,694 9,525

S9 12,775 11,590 11,505 11,445 10,763 10,575

S10 14,013 12,715 12,630 12,570 11,831 11,625

S11 16,788 15,265 15,005 14,945 14,094 13,850

S12 16,788 15,265 15,005 14,945 14,094 13,850

S13 19,139 17,403 17,143 17,083 16,124 15,845

S14 19,263 17,515 17,255 17,195 16,231 15,950

S15 20,900 19,040 18,580 18,520 17,500 17,200

S16 23,375 21,290 20,830 20,770 19,638 19,300

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S17 23,375 21,290 20,830 20,770 19,638 19,300

S18 26,654 24,271 23,811 23,751 22,470 22,083

S19 25,850 23,540 23,080 23,020 21,775 21,400

S20 27,459 25,003 24,543 24,483 23,164 22,765

S21 30,800 28,040 27,580 27,520 26,050 25,600

S22 32,656 29,728 29,268 29,208 27,653 27,175

S23 30,800 28,040 27,580 27,520 26,050 25,600

S24 36,493 33,215 32,755 32,695 30,966 30,430

S25 38,473 35,015 34,555 34,495 32,676 32,110

S26 41,690 37,940 37,480 37,420 35,455 34,840

S27 41,690 37,940 37,480 37,420 35,455 34,840

S28 36,493 33,215 32,755 32,695 30,966 30,430

S29 46,640 42,440 41,980 41,920 39,730 39,040

S30 56,540 51,440 50,980 50,920 48,280 47,440

S31 56,540 51,440 50,980 50,920 48,280 47,440

S32 60,624 55,153 54,693 54,633 51,807 50,905

S33 65,450 59,540 59,080 59,020 55,975 55,000

S34 75,350 68,540 68,080 68,020 64,525 63,400

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As stated in the previous section, the gross pay calculation does not include the following

allowances:

Allowances that are given to employees because of the specialties of the occupation viz.

washing allowance for uniform adorning employees, over time allowance for drivers, etc.

are not added to the CTG as the objective is to give a “standard” picture. The allowances

nevertheless will be added to those employees who will be eligible for them.

Similarly geography specific allowances viz. special compensatory remote locality

allowance, Island special duty allowance, etc. given to those employees for neutralizing

the extra cost of living and hardship borne by trying to adapt to special geographies

during their tenure is not added in the gross pay calculation. The cost to government for

special categories (geographically and functionally) is shown below:-

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Table 5-1: Gross pay Gen. Category Special geographies by cities, grade wise

Post/Grade Gross pay in NE in C and part C

Gross pay in NE in PartB

Gross pay in Port Blair

Gross pay in CAR Nicobar

S1 6,304 6,404 6,756 6,982

S2 6,443 6,543 6,902 7,133

S3 6,536 6,636 6,999 7,233

S4 6,769 6,869 7,243 7,484

S5 7,616 7,716 8,159 8,438

S6 7,965 8,065 8,525 8,815

S7 9,975 10,175 10,805 11,125

S8 11,138 11,338 12,024 12,381

S9 12,300 12,500 13,243 13,638

S10 13,463 13,663 14,461 14,894

S11 16,063 16,363 17,274 17,831

S12 16,063 16,363 17,274 17,831

S13 18,271 18,571 19,589 20,218

S14 18,388 18,688 19,711 20,344

S15 19,750 20,050 21,130 21,800

S16 22,075 22,375 23,568 24,313

S17 22,075 22,375 23,568 24,313

S18 25,156 25,456 26,797 27,642

S19 24,400 24,700 26,005 26,825

S20 25,911 26,211 27,589 28,458

S21 29,050 29,350 30,880 31,850

S22 30,794 31,094 32,708 33,734

S23 29,050 29,350 30,880 31,850

S24 34,398 34,698 36,486 37,629

S25 36,258 36,558 38,436 39,639

S26 39,280 39,580 41,605 42,905

S27 39,280 39,580 41,605 42,905

S28 34,398 34,698 36,486 37,629

S29 43,930 44,230 46,480 47,930

S30 53,230 53,530 56,230 57,980

S31 53,230 53,530 56,230 57,980

S32 57,066 57,366 60,252 62,126

S33 61,600 61,900 65,005 67,025

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S34 70,900 71,200 74,755 77,075

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6 COSTING BENEFITS-GENERAL CATEGORY

Costing benefits normally needs some assumptions as it is not very easy to attribute

monetary value to benefits without making some assumptions. One might question the

inclusion of pension in benefits. Well, pension simply put is “deferred compensation”. It

is a benefit because, the government guarantees some form of “income security” to the

employee and his/her family. This benefit gets extended to his family after his/her death.

Pricing benefits sometimes is fairly easy, sometimes very difficult and sometimes

bordering on impossibility (viz. pricing job security). In the following sections we have

listed the items that have been included in the CTC, by making suitable assumptions.

The list of benefits as already stated in the previous section includes:

• Children education assistance

• Telephones

• Newspapers

• Leave travel concession

• Home travel concession

• Pension

• gratuity

• leave encashment

• home loan subsidy

• vehicle loan subsidy

• computer loan subsidy

• group insurance

• medical facilities

Children education assistance is calculated assuming one to two children at the rate of Rs

40 per child per month except at the higher levels where this has not been provided for.

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Non productivity linked bonus is technically a variable component of pay. It has been

added to the CTG for S1 to S11 at Rs 2419 per annum and is added to the benefits,

though technically it is not a benefit.

6.1 Cost of pension

Government employees who joined the government before 1-1-2004 get a defined

pension amount. The amount of pension payable is 50% of the basic pay. Moreover it is

inflation indexed and also paid after the employee’s demise to his/her family @ 30% of

the basic pay. To calculate the monthly cost of pension, one has to calculate how much

the government should contribute to a pension fund, which after 33 years gives a corpus

amount that can pay for the pension assuming 20 years post retired life. 20 years was

assumed based on age group wise expectation of life in India at 60 years. (Annexure

18.2). We also assumed 10 years of family pension i.e. we have assumed that after 20

years the government will give family pension to the employee for the next 10 years.

In estimating the corpus that needs to be built up by the end of the career span , for

servicing the pension outflow in the future , the methodology adopted is as follows:

basic salary at entry points have been considered and a career span of 33 years assumed.

We have assumed that the pay increases by 2% every year and to that have added a DA

of 6% per annum. Roughly every 10 years, once a Pay Commission makes

recommendation, the DA gets merged into the pay and generally 20% of the previous

basic pay is added to form a new pay. On an average, a government employee sees two

promotions and two Pay Commissions. Using the above calculations we arrive at the pay

33 years from now. The employee gets 50% of Pay as pension and this pension increases

at 6% of the pension per annum. This pension is also subject to revision with every Pay

Commission. 40 % of the pension can be commuted by the employee at the time of

retirement. This value is calculated based on the extant commutation table. The

remaining 60% of pension is paid to the employee along with dearness relief which is

calculated on 100% of monthly pension. The amount commuted is restored after a period

of 15 years. We have calculated the net present value discounted at 8 % per annum for

monthly pension paid over 20 years and for 10 years of family pension. The lumpsum

commutation amount payable on retirement along with the NPV figure is the amount the

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government has to save to provide for pension. The amount the government has to set

aside to accumulate the net present value calculated above, from the day the employee

joins for the next 33 years gives us the monthly value of pension. The percentage of

Basic pay to be set aside to generate the corpus was arrived at by using goal-seek i.e., by

varying the percentage of basic pay. We arrived at approximately 30% of Basic pay.

Our calculations using the assumptions as described above shows that pay increases

roughly by 7.6% per annum (compounded). Further, we have assumed only 2

promotions. In the long term, say 33 years, pay will definitely increase more than 7.6%

and many government employees particularly those belonging to Group A Services may

see 4 to 6 promotions. Even if 4 to 6 promotions in a career of 33 years are assumed for

the purpose of this calculation, the amount of contribution would range from 33 to 34

percent of basic pay. However, since the difference is not very significant, for the

purpose of the study, two promotions have been used as the general average. As such, the

estimates made are conservative, particularly in respect of the Group A Services.

We have shown the calculations for level S1 where the basic pay is Rs. 2550. Using goal-

seek we arrive at 29.39% of the minimum of the basic pay as the amount of contribution

per month that should be contributed in a pension fund. In the example shown in the table

below pay is increased by 20% (after merging the DA) every 10 years due to the “Pay

commission effect”. It is also assumed that the employee sees a minimum of 2

promotions. The calculation is conservative as many government employees will see

more than 2 promotions.

The table below shows the contribution per month for an employee getting Rs. 2550 as

basic pay per month.

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Table 6-1: Pension contribution calculation-an illustration

Per month contribution 29.39%

Year Basic DA Pay % of Basic per year

contribution

1 2,550.00 0 2,550.00 749.34 8,992.13

2 2,601.00 156.06 2,757.06 764.33 9,171.97

3 2,652.00 318.3624 2,970.36 779.32 9,351.82

4 2,703.00 486.9072 3,189.91 794.30 9,531.66

5 2,754.00 661.6944 3,415.69 809.29 9,711.50

6 2,805.00 842.724 3,647.72 824.28 9,891.34

7 2,856.00 1029.996 3,886.00 839.27 10,071.19

8 2,907.00 1223.51 4,130.51 854.25 10,251.03

9 2,958.00 1423.267 4,381.27 869.24 10,430.87

10 3,009.00 1629.266 4,638.27 884.23 10,610.71

Pay commission 1 11 5,240.07 0 5,240.07 1,539.85 18,478.18

12 5,344.87 320.69 5,665.56 1,570.65 18,847.74

First promotion 13 5,663.46 654.21 6,317.68 1,664.27 19,971.22

14 5,776.73 1,039.81 6,816.54 1,697.55 20,370.64

15 5,890.00 1,414.14 7,304.15 1,730.84 20,770.07

16 6,003.27 1,802.34 7,805.61 1,764.12 21,169.49

17 6,116.54 2,204.40 8,320.94 1,797.41 21,568.92

18 6,229.81 2,620.33 8,850.14 1,830.69 21,968.34

19 6,343.08 3,050.12 9,393.19 1,863.98 22,367.76

20 6,456.35 3,493.77 9,950.12 1,897.27 22,767.19

Pay commission 2 21 11,241.39 0 11,241.39 3,303.40 39,640.79

22 11,466.21 687.97 12,154.19 3,369.47 40,433.61

23 11,691.04 1,403.46 13,094.51 3,435.54 41,226.42

24 11,915.87 2,146.48 14,062.35 3,501.60 42,019.24

Second promotion 25 12,617.33 2,917.00 15,534.34 3,707.74 44,492.82

26 12,855.65 3,860.90 16,716.55 3,777.77 45,333.21

27 13,093.97 4,720.59 17,814.56 3,847.80 46,173.59

28 13,332.28 5,609.46 18,941.74 3,917.83 47,013.98

29 13,570.60 6,527.49 20,098.09 3,987.86 47,854.36

30 13,808.92 7,474.69 21,283.61 4,057.90 48,694.75

Pay commission 31 24,045.39 0.00 24,045.39 7,065.99 84,791.88

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3

32 24,526.30 1,471.58 25,997.88 7,207.31 86,487.72

33 25,007.21 3,002.02 28,009.23 7,348.63 88,183.56

Amount at time of retirement 2,709,356.45

2,709,356.45

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Explanation: How did we arrive at the amount to be saved viz. 2,709,356.45:-

The pay in the 33rd year (only the basic) is 25,007.21. 50% of this amount is 12,503.60.

40% of the amount of pension can be commuted at a multiplication factor which is 9.81

for those retiring at the age of 60. The commuted amount is restored after the 15th year.

The pension increases in amount in terms of dearness allowance( called dearness relief

and paid on the full amount of pension before commutation) until the next Pay

Commission merges the DA with the pension. This pension is assumed to end at the 20th

year after which the family pension is assumed to start and continue for 10 years. The

amount of pension and family pension (excluding the amount of lumpsum commutation

paid on retirement) are discounted at 8%. This, along with the commuted amount is

indicative of the amount to be notionally saved by the time the employee retires.

6.2 Cost of gratuity

Employees get 16.5 times their pay or Rs 3, 50,000. In the earlier section we discovered

that the pay roughly increases by 7.6% per year. Hence, we assumed a growth of

approximately 8% in the pay. On a conservative basis, we also assumed the maximum

ceiling of gratuity as Rs 8,00,000 for the purpose of costing, keeping in view a length of

service of 33 years. The monthly contribution to a fund that grows at 8% per annum

eventually reaching a maximum of Rs 8 lakh is the cost of gratuity in monthly terms.

6.3 Cost of Encashment of 300 days leave

The calculation is very similar to that of gratuity. Pay increases by 8 percent over 33

years. An employee is eligible to en-cash up to 300 days basic + DA of the last drawn

pay. The very fact that the employee is able to en-cash the amount makes it necessary for

the government to save for the reimbursement. The government has to save a small

amount every month which grows over 33 years at 8% per annum. Given that employees

cannot normally enter service after S15, the assumption that government has 33 years to

save is hypothetical at levels higher than S15.. Hence the cost to government shown in

the package is again conservative.

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6.4 Leave Travel Concession

Employees of the government are reimbursed the travel expenses they incur towards

going home once in two years. This is called home travel concession. In a block of four

years, instead of one home travel concession, the employee can travel to any part of the

country along with their family. The reimbursement amount increases by pay level as the

class of travel (by rail) increases by pay level. All-India LTC and HTC are benefits as the

government employee cannot en-cash it. Costing for LTC/HTC was done using the

maximum entitlement of the employee and not the actual utilization of LTC/HTC in the

past few years. The assumption of maximum entitlement in costing LTC has been made

as the employee has the option of utilizing his full entitlement, should he wish to do so.

Hence, we focused on the potential amount the government was willing to reimburse for

every employee.

However, we did not want to assume that every government employee will travel the

entire length and breadth of the country every four years. We have assumed 1000

kilometers as LTC distance traveled by a family. So, for an employee eligible to travel

only by sleeper class, he or she when traveling 1000 kms will cost the government Rs

674 (337 x 2) per person. We have assumed a family of 3 for S1,of 4 for S2 to S29 ;of 3

for S30 and S31 and a family of 2 for S32 to S34. A few levels are eligible to travel by

air; the costing for these levels is assumed to be the price of traveling from Delhi to

Nagpur and return. Instead of the full economy fare, we have taken the discounted fares

and cost it at Rs 8000 per trip. If the basic pay is above Rs. 4100, then he is eligible to

travel by third A/C fare which would cost. Rs. 975 per person per trip. If the basic pay is

above Rs 8000, then the employee is eligible to travel by A/C II tier, which would cost

about Rs. 1366 per trip. The HTC is cost at 50% of the LTC. i.e. we have assumed that

when traveling under HTC, the employee travels only 500 Km (one way).

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6.5 House building advance

The house building advance that the employees get is 34 times their basic pay Plus DP or

Rs 7,50,000 whichever is lower. The principal is repaid first and then the simple interest

is recovered. House building advance is nowadays shown in the CTC of any organization

whenever the organization gives them an interest subsidy. The rationale that every

employee would most likely avail of this benefit brings it to the CTC table. For the

purpose of calculating the exact benefit the employees get, we have calculated the actual

EMI the employee pays per month and the EMI (Equated monthly installment) the

employee would have paid had he taken the advance from a bank. Since government

employees get their loan at simple interest, the difference between a similar

advance/Credit given by a public sector bank gives the benefit. The benefit is calculated

for an interest rate of 9.5 %. The equivalent EMI from a bank in India is priced at 1000

Rs for every Rs. 100000 loan with duration of 20 years. The employee when taking a

government loan repays the principal in 180 monthly installments and interest in 60

installments. In order to make the two loans comparable the total interest paid is

calculated and added to the principal amount and divided by 240 (maximum no. of

installments allowed for repayment)

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Table 6-2: House building advance benefit per month by grade

Post/Grade House building advance Benefit

S1 130,050 411

S2 133,110 421

S3 135,150 427

S4 140,250 444

S5 155,550 492

S6 163,200 516

S7 204,000 645

S8 229,500 726

S9 255,000 806

S10 280,500 887

S11 331,500 1,048

S12 331,500 1,048

S13 379,950 1,202

S14 382,500 1,210

S15 408,000 1,162

S16 459,000 1,307

S17 459,000 1,307

S18 526,575 1,500

S19 510,000 1,453

S20 543,150 1,547

S21 612,000 1,743

S22 650,250 1,852

S23 612,000 1,743

S24 729,300 2,077

S25 750,000 2,136

S26 750,000 2,136

S27 750,000 2,136

S28 729,300 2,077

S29 750,000 2,136

S30 750,000 2,136

S31 750,000 2,136

S32 750,000 2,136

S33 750,000 2,136

S34 750,000 2,136

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6.6 Vehicle and computer advance

The vehicle advance and computer advance are also a benefit to government employees

to the extent of the difference in the cost of the loan. The government employee pays

back the vehicle and computer advance that he/she avails from the government on the

basis of simple interest. In the market, the interest payable is compounded. Hence, the

difference in interest payment on account of simple and compound interest is shown in

the CTG as the benefit..

For buying a two wheeler, the maximum amount of loan given by the government is Rs

30,000 or 4 times pay plus DP, whichever is lower? For buying a four wheeler, the

maximum amount is 180000 or 8 times the basic Plus DP. For comparison purposes, we

have assumed the interest rate of 11.5 % for a four wheeler loan and duration of 7 years

(as is the wont in the banks). For two wheelers we have assumed that the banks give the

loan at 12.5% interest rate (as against the 8% simple interest rate given by government);

but the loan is paid in 48 installments (as against the 70 allowed in the government). We

have used the assumptions used for calculating two wheeler advance subsidy for

calculating computer advance subsidy. For an amount of Rs. 30,000 the subsidy is about

Rs. 80 per month.

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6.7 Medical benefits

For medical benefits, we used the cost of insurance premium assuming an annual

insurance premium of Rs. 2951 based on data from www.Indiastat.com. The data gives

insurance premium rates for different ages. We have used ages 36-45 and a sum assured

of Rs. 200000. The source is acknowledged in the appendix-D. Technically the cost to

government for medical insurance is understated since the benefit to the employee is

unlimited. At level S1, the family size is assumed to be 3,from S2 to S29 the family size

is taken as 4; at level S30 and S31, the family size is assumed to be 3 and at level S32 and

above family size assumed is 2. We have deducted from this the employee’s contribution

to the Central Government Health Scheme.

6.8 Medical benefits post retirement

The government employees are in receipt of medical benefits post retirement. We have

tried costing this in a manner similar to gratuity/pension in that we have focused on how

much the government would have to save every month in order to pay insurance premium

for government employees post retirement. We have assumed that insurance premium

rates will grow along with inflation (at 5%). The insurance premium for age 60 and above

is around Rs. 8000. per annum. This amount grows at 5% per annum. The savings that

the government makes per month (hypothetically) grows at 8% per annum. The insurance

premium is assumed to be paid for a period of 20 years for both husband and wife. Hence

the government has to save 538 rupees every month for 33 years.

6.9 CTG of Group insurance benefit

Employees of the government (general category) contribute to a fund every month, 30%

of which goes to an insurance fund and the rest goes to a savings fund which gives 8%

return. The insurance fund gives insurance benefits in case of loss of life. But the benefits

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are much more than that would be possible had the employee contributed to an insurance

company in the market. i.e. the employee contributes less than what he/she should to get

the same insurance benefit. Given that the benefit is defined, the difference between the

insurance premium that should be paid and the premium the employee actually

contributes constitutes the benefit that the employee receives and also denotes the cost

the government incurs.

The following assumptions were made in finding the cost of the insurance benefit in the

market.

Assuming the age of the individual is 25 years, if he takes an insurance policy for a

period of 33 years, then he shall have to pay Rs. 25 (approx.) for every Rs. 1000 sum

assured per annum. This gives us the market price for insurance the employee has to pay.

Depending on the insurance amount assured in the even of death, the total cost can be

calculated. We used the LIC website for calculating the exact premium. An employee

who contributes Rs 15 every month to the group insurance scheme contributes 30% of

that or Rs 5 per month to a insurance fund for which the market premium is Rs 32 per

month. Similarly an employee who contributes Rs 60 every month contributes Rs 20 to

an insurance fund that promises a sum assured of Rs. 60000 for which the premium per

month works out to be Rs 129 per month. Finally for a sum assured of Rs. 120000, the

employee would be paying Rs. 249 per month while he/she contributes only Rs 36. The

actual cost to government per month is displayed below for every pay level. Table 6-3: CTG on insurance by amount paid

Amount paid Insurance component Sum assured Market premium rate CTG

15 4.5 15000 32 27.5

30 9 30000 60 51

60 18 60000 129 111 120 36 120000 249 213

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Table 6-4: Group insurance benefit per month

Grade Pay scale at the minimum of scale Group insurance Benefit

S1 2,550.00 27.50 S2 2,610.00 27.50 S3 2,650.00 27.50 S4 2,750.00 51.00 S5 3,050.00 51.00 S6 3,200.00 51.00 S7 4,000.00 51.00 S8 4,500.00 51.00 S9 5,000.00 51.00 S10 5,500.00 111.00 S11 6,500.00 111.00 S12 6,500.00 111.00 S13 7,450.00 111.00 S14 7,500.00 111.00 S15 8,000.00 213.00 S16 9,000.00 213.00 S17 9,000.00 213.00 S18 10,325.00 213.00 S19 10,000.00 213.00 S20 10,650.00 213.00 S21 12,000.00 213.00 S22 12,750.00 213.00 S23 12,000.00 213.00 S24 14,300.00 213.00 S25 15,100.00 213.00 S26 16,400.00 213.00 S27 16,400.00 213.00 S28 14,300.00 213.00 S29 18,400.00 213.00 S30 22,400.00 213.00 S31 22,400.00 213.00 S32 24,050.00 213.00 S33 26,000.00 213.00 S34 30,000.00 213.00

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6.10 Benefits not added to the CTG

There are a few benefits that we have not added to the CTG. The components and the

reasons for not adding them are given below.

6.10.1 Cost of leave the employee is eligible

The per day salary for the no. of leave that the government employees is eligible for is

calculated on a per month basis. But this is not added to the CTC, as the salary given to

an employee is not for the working days alone but rather for the whole month. The reason

being that salary is paid for an expected output over a larger span of time (one month)

rather than by the hour.

6.10.2 Canteen subsidy

Government employees at a few places are in receipt of canteen facilities for tea, snacks

and even lunch. The costs at which these are available are lesser than the market cost.

However these are not available for everyone and we do not have a data regarding the

cost and the extent of subsidy. Hence we have not added this item into the package.

6.10.3 Computer at home for certain levels (not in the CTG)

Joint Secretaries and equivalent and above, are given a computer at residence. The cost of

this computer is however not added to the CTG.

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6.10.4 Car for S29 and above (not in CTG)

The cost to government in employing a chauffeur for the car is a benefit. Since it is

strictly for official use officially we cannot add it as a benefit. Hence car for given as a

privilege is not added to CTG, since transport allowance amount of Rs. 800 is already

added.

6.10.5 Ex-gratia (not in CTG)

If the government employee is fatally wounded when in duty the government pays an ex-

gratia amount of Rs. 7, 50,000. This amount is for the family of the employee. This

amount is not added to the CTG.

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6.11 Table of benefits for all levels (General employees)

The table below shows the numbers that we have arrived at based on the discussion shown in the previous sections. The benefits by pay

level are shown below. Table 6-5: Table of benefits for General category employees

Post / Grade

LTA HTA Tele phones

News papers

Pension Gratuity Leave encashtt

cost of medical net Deductions

Medical insurance post retirement

motor vehicle subsidy

computer advance subsidy

interest subsidy/ month on HBA

Group Insurance

Sum of all benefits

S1 42 21 765 274 167 698 538 411 28 2,984

S2 56 28 783 280 171 944 538 421 28 3,328

S3 56 28 795 285 174 944 538 427 28 3,354

S4 56 28 825 295 180 944 538 444 51 3,440

S5 56 28 915 328 200 944 538 492 51 3,632

S6 56 28 960 344 210 914 538 516 51 3,727

S7 163 82 1,200 411 262 914 538 80 80 645 51 4,215

S8 163 82 1,350 411 295 914 538 80 80 726 51 4,609

S9 163 82 1,500 411 328 914 538 80 80 806 51 5,032

S10 163 82 1,650 411 361 884 538 80 80 887 111 5,356

S11 163 82 1,950 411 426 884 538 80 80 1,048 111 5,883

S12 228 114 80 1,950 411 426 884 538 80 80 1,048 111 5,963

S13 228 114 80 2,235 411 488 884 538 80 80 1,202 111 6,433

S14 228 114 80 2,250 411 492 884 538 80 80 1,210 111 6,459

S15 228 114 80 2,400 411 524 834 538 80 80 1,162 213 6,794

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Post / Grade

LTA HTA Tele phones

News papers

Pension Gratuity Leave encashtt

cost of medical net Deductions




interest subsidy/ month on HBA

Group Insurance

Sum of all benefits

S16 228 114 80 2,700 411 590 884 538 80 80 1,307 213 7,305

S17 228 114 80 2,700 411 590 884 538 80 80 1,307 213 7,305

S18 228 114 80 3,098 411 677 834 538 80 126 1,500 213 7,932

S19 228 114 80 3,000 411 656 834 538 80 126 1,453 213 7,816

S20 228 114 80 3,195 411 698 834 538 762 126 1,547 213 8,825

S21 228 114 1,500 80 3,600 411 787 834 538 762 126 1,743 213 11,015

S22 228 114 1,500 80 3,825 411 836 834 538 762 126 1,852 213 11,398

S23 228 114 1,500 80 3,600 411 787 834 538 762 126 1,743 213 11,015

S24 228 114 1,500 80 4,290 411 937 834 538 762 126 2,077 213 12,190

S25 390 195 1,500 80 4,530 411 990 834 538 762 126 2,136 213 12,541

S26 390 195 1,500 80 4,920 411 1,075 834 538 762 126 2,136 213 13,259

S27 390 195 1,500 80 4,920 411 1,075 834 538 762 126 2,136 213 13,259

S28 390 195 1,500 80 4,290 411 937 834 538 762 126 2,077 213 12,190

S29 1,333 667 1,800 160 5,520 411 1,206 834 538 762 126 2,136 213 15,745

S30 1,000 500 1,800 240 6,720 411 1,468 588 538 762 126 2,136 213 16,542

S31 1,000 500 1,800 240 6,720 411 1,468 588 538 762 126 2,136 213 16,502

S32 1,000 500 1,800 240 7,215 411 1,577 517 538 762 126 2,136 213 17,034

S33 667 334 2,800 240 7,800 411 1,704 517 538 762 126 2,136 213 18,247

S34 667 334 2,800 240 9,000 411 1,967 517 538 762 126 2,136 213 19,709

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6.12 Cost to government table by pay levels for general category government employees

This table displays CTG for all levels of government employees in different classes of

cities. Table 6-6: CTG (General category) at beginning of pay scale

Grade CTG A1 city CTG A city CTG B1 CTG B city CTG C city Unclassified

city

S1 9,722 9,118 9,063 9,033 8,711 8,615

S2 10,215 9,597 9,542 9,512 9,184 9,086

S3 10,340 9,713 9,658 9,628 9,295 9,196

S4 10,673 10,025 9,970 9,940 9,595 9,492

S5 11,682 10,946 10,871 10,836 10,427 10,313

S6 12,148 11,378 11,303 11,268 10,843 10,723

S7 14,717 13,757 13,672 13,612 13,042 12,892

S8 16,348 15,276 15,191 15,131 14,504 14,336

S9 18,009 16,824 16,739 16,679 15,996 15,809

S10 19,570 18,272 18,187 18,127 17,389 17,182

S11 22,872 21,349 21,089 21,029 20,178 19,934

S12 22,750 21,228 20,968 20,908 20,056 19,813

S13 25,572 23,836 23,576 23,516 22,557 22,278

S14 25,722 23,974 23,714 23,654 22,691 22,409

S15 27,694 25,834 25,374 25,314 24,294 23,994

S16 30,680 28,595 28,135 28,075 26,942 26,605

S17 30,680 28,595 28,135 28,075 26,942 26,605

S18 34,586 32,203 31,743 31,683 30,401 30,014

S19 33,666 31,356 30,896 30,836 29,591 29,216

S20 36,284 33,828 33,368 33,308 31,990 31,590

S21 41,815 39,055 38,595 38,535 37,065 36,615

S22 44,054 41,126 40,666 40,606 39,051 38,573

S23 41,815 39,055 38,595 38,535 37,065 36,615

S24 48,682 45,405 44,945 44,885 43,156 42,620

S25 51,014 47,556 47,096 47,036 45,217 44,651

S26 54,949 51,199 50,739 50,679 48,714 48,099

S27 54,949 51,199 50,739 50,679 48,714 48,099

S28 48,682 45,405 44,945 44,885 43,156 42,620

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For Doctors, 25% of Basic pay + Dearness pay is added as a non practicing allowance.

Since this is treated as basic pay for all purposes, their HRA, CCA and even pension will

be more. We also have added Rs.180 across all levels as a representative conveyance

allowance given to doctors. (Doctors are only in s15, s19, s 21, s24, s29, s30 and s33). Table 6-7: CTG for Doctors

Gross pay A1 city

Gross pay A CTGA1 CTGA

S15 26030 23720 7215 33245

S19 32218 29345 9190 41408

S21 38405 34970 11603 50008

S24 45521 41439 12423 57943

S29 58205 52970 16084 74289

S30 70580 64220 16946 87526

S33 74293 67595 17715 92008

S29 62,385 58,185 57,725 57,665 55,475 54,785

S30 73,082 67,982 67,522 67,462 64,822 63,982

S31 73,042 67,942 67,482 67,422 64,782 63,942

S32 77,658 72,186 71,726 71,666 68,841 67,939

S33 83,697 77,787 77,327 77,267 74,222 73,247

S34 95,059 88,249 87,789 87,729 84,234 83,109

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Figure 6-1: S1 CTG Pie Chart

S1 CTG breakup

BP+DP+DA 54%

Ginsurance Benefit0%

TA1%

Medical post retirment6%

leave encash2%

LTC0%

Medical7%

HRA A1 13%

CCA A11%Reimbursement of

Tution fee1%

LTC0%

Housing interest subsidy per month

4%Gratuity

3%

Pension8%

BP+DP+DA

HRA A1

CCA A1

TA

Reimbursement of Tution fee

LTC

LTC

Pension

Gratuity

leave encash

Medical

Medical post ret irment

Housing interest subsidy permonthGinsurance Benefit

The above diagrammatic representation of the pay of an employee at S1 level shows that

medical benefits are almost equally pronounced at this level as pension benefits. Since

the medical benefits are the same across levels, the weight of medical benefits will come

down as one goes up the level. As a consequence pension and gratuity will be more

pronounced. Interestingly HTA, LTA have almost nil weights though benefits due to

housing loan have about 4% weight. At 54% the basic pay has more weights than what

the private sectors have. But HRA is moderately pronounced at 13%.

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As we go up the level we see that the weight of benefits as a percentage of the CTC is coming down. Some of the factors contributing to the weights could be the way we have cost some of the benefits like medical facilities as the same across all the levels. Figure 6-2: S15 CTG Pie chart

S15 CTG break up

BP+DP+DA51%

HRA23%

LTA1%

HTA0%

leave encash1%


2%

computer advance subsidy0%

New spapers0%

Reimb of T. Fee0%

Transport allow ance3%

interest subsidy per month on HBA

7%

Ginsurance Benefit1%

CCA1%

Pension8%

Gratuity1%

motor vehicle subsidy0%

Medical3%

BP+DP+DA

HRA

CCA

Transport allow ance

Reimb of T. Fee

LTA

HTA

New spapers

Pension

Gratuity

leave encash

Medical




interest subsidy per month on HBA

Ginsurance Benefit

At S15 more components enter, and weight of Medical facilities go down as pension gains significance in weight. LTA, HTA however stay at the same weights. Note also that transport allowance has a weight of 3% at this stage. As TA stays the same the weight reduces as one goes up the pay level. The other significant item in terms of weight is the House building subsidy (8%). It however reduces in significance as we go up the level as the amount stays the same.

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6.12.1 CTG general category (special functions/geographies)

Cost to Government in the North East and Island areas is given below. Apart from the allowances, they are in receipt of an annual leave travel concession for which they forego the LTC/HTA available for the civilians. Table 6-8: CTG general category-special geographies

Post/Grade CTG in NE

in C and

part C

CTG in

NE in

PartB

CTG in

Port blair

CTG in

CAR

Nicobar

S1 9,489 9,589 9,941 10,167

S2 9,973 10,073 10,432 10,662

S3 10,092 10,192 10,555 10,789

S4 10,411 10,511 10,885 11,126

S5 11,449 11,549 11,992 12,271

S6 11,893 11,993 12,453 12,743

S7 14,392 14,592 15,222 15,542

S8 15,948 16,148 16,834 17,192

S9 17,534 17,734 18,476 18,871

S10 19,020 19,220 20,019 20,451

S11 22,147 22,447 23,358 23,915

S12 22,025 22,325 23,236 23,794

S13 24,704 25,004 26,022 26,651

S14 24,847 25,147 26,171 26,803

S15 26,544 26,844 27,924 28,594

S16 29,380 29,680 30,872 31,617

S17 29,380 29,680 30,872 31,617

S18 33,087 33,387 34,729 35,573

S19 32,216 32,516 33,821 34,641

S20 34,737 35,037 36,415 37,283

S21 40,065 40,365 41,895 42,865

S22 42,192 42,492 44,106 45,132

S23 40,065 40,365 41,895 42,865

S24 46,587 46,887 48,676 49,819

S25 48,799 49,099 50,977 52,180

S26 52,539 52,839 54,864 56,164

S27 52,539 52,839 54,864 56,164

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S28 46,587 46,887 48,676 49,819

S29 59,675 59,975 62,225 63,675

S30 69,772 70,072 72,772 74,522

S31 69,732 70,032 72,732 74,482

S32 74,100 74,400 77,286 79,160

S33 79,847 80,147 83,252 85,272

S34 90,609 90,909 94,464 96,784

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7 CTG FOR RAILWAY EMPLOYEES In this section we have presented the CTG for railway employees. The constituents of

pay and benefits for railway employees are almost the same as the general category

employees except for railway passes and a special category called running staff.

7.1 Constituents of gross pay for railway employees

The gross pay of railway employees is arrived at adding, Basic pay (taken at the

beginning of the pay scale), dearness pay, dearness allowance; house rent allowance, city

compensatory allowance and transport allowance. The gross pay for reach level is given

below. Please note that, the calculation is at the the entry level of each scale.

7.1.1 List of allowances for railway employees

The railway employees have the same set of allowances as the general category viz.

dearness allowance; house rent allowance, city compensatory allowance and transport

allowance. All these are added to the gross pay. Function specific allowance like

Washing allowance, Night duty allowance, National holiday allowance, goods train

special duty allowances, breakdown allowance, night patrolling allowance (given during

monsoon for those employees entrusted with inspecting the railway tracks), risk

allowance etc. are not added to the gross pay due to the special nature of the allowances

which makes only those performing those specific duties eligible for the allowances. The

list of allowances for railways can be seen in the appendix.

We have, however, added running allowances for running staff by treating the running

staff as a separate category of employees. Gross pay and CTG for running staff will be

separately discussed below.

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8 COST OF THE BENEFITS OF RLY. EMPLOYEES The list of benefits for railway employees includes almost all the benefits of the general

category civilian employees:

• Education allowance

• Newspapers

• Telephones

• Pension

• Medical facilities

(The railway employees do not contribute to CGHS like the general category

employees)

• Gratuity

• Housing, computer and vehicle loan benefits

• Leave encashment

• Computer at home for certain levels

They do not have LTC or HTC, but have railway passes the cost of which is discussed in

the next section. The details of all the benefits available to Railway Employees, including

those to running staff, are shown in the table below :-

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Table 8-1: package details Railway employees

CTC A Gross pay B Benefits C Variable pay Standard package Basic pay

Dearness pay Dearness allowance HRA CCA Transport allowance

Telephones Newspapers Children Education Assistance Railway Passes Pension Gratuity Leave encashment Home Loan Subsidy, Vehicle Loan Subsidy, Computer Loan Subsidy Group Insurance Medical Facilities Leave Computer at home at certain level Bungalow Peons at certain levels Honorarium

Productivity Linked Bonus for non gazetted staff


A+B+C as above + some/any of the following or all of the following Washing Allowance Overtime Allowance Non-Practicing Allowance (doctors) Nursing Allowance (nurses) Conveyance Allowance (doctors) Cash Handling Allowance Split Duty Allowance National Holiday Allowance Training Allowance Sumptuary Allowance Night patrolling Allowance (gang men) PCO Allowance Qualification Allowance Out Turn Allowance Daily Officiating Allowance Cell Allowance Night Duty Allowance Ration Allowance (for RPF) Kit Maintenance Allowance Uniform Allowance Cycle Maintenance Allowance

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8.1 Railway Passes

The Railways get passes in lieu of LTC, and they get it every year. The calculation of the

railway pass expenses are shown to be similar to that of LTC except that each pass can be

used every year and not once in four years.

The employees get 3 passes up to a certain level and six passes thereafter. Each pass

entitles the employee to take his/her family across the country and back. We have

assumed a distance of 1000 KM and assumed a family size that varies across the levels.

At S1 the family size is assumed to be 3 while at S30 and S31, we have assumed a family

size of 3 and S32 and above a family size of 2. The cost is arrived at assuming that the

family utilizes the available passes traveling a distance of 1000 km in the class of travel

that the employee is eligible.


A+B+C as in the first row + any/some of the following: Hill Compensatory Allowance Island Area Special Allowance Special Duty Allowance Special Compensatory Allowance Remote Area, Border Area, Hard Area, Tribal Area Allowance Bad Climate Allowance Tenure Allowance Sunderban Allowance

Additional Allowances/Benefits of running staff

Kilometrage Allowance/ Allowance in lieu of kilometrage Allowance in lieu of Running Room Breach of Rest Allowance Outstation (Detention Allowance) Outstation (Retrieving Allowance) Accident Allowance Officiating Allowance shunting Duty Allowance Waiting Duty Allowance Minimum Guaranteed Kilometrage Incentive Scheme for through Goods Train Trip Allowance Pay Element (30%) for calculating DA, CCA, HRA, OTA, PLB, Leave Salary etc.Retirement Benefit – 55% of basic pay for computing Retirement Benefits

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Table 8-2: CTG of Railway passes

Grade Pay at the minimum of pay scale

Passes

S1 2550 506

S2 2610 506

S3 2650 506

S4 2750 506

S5 3050 506

S6 3200 506

S7 4000 506

S8 4500 1950

S9 5000 1950

S10 5500 1950

S11 6500 1950

S12 6500 1950

S13 7450 1950

S14 7500 1950

S15 8000 2732

S19 10000 2732

S21 12000 2732

S24 14300 2732

S26 16400 2732

S29 18400 9364

S30 22400 9364

S31 22400 9364

S32 24050 7023

S33 26000 4682

8.2 Cost of passes post retirement

Railway employees are eligible for passes even after retirement. We are costing them in

the package by looking at how much should the government save in a fund assuming that

the railway tickets would increase by three times. We assume that the employee will

travel only two times a year post retirement along with his wife; the duration of such

passes have been taken for a period of 20 years post retirement.

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Table 8-3: CTG of Railway passes post retirement

cost of passes post retirement

S1 41

S2 41

S3 41

S4 41

S5 41

S6 41

S7 41

S8 118

S9 118

S10 118

S11 118

S12 118

S13 118

S14 118

S15 165

S19 165

S21 165

S24 165

S26 165

S29 283

S30 283

S31 283

S32 283

S33 283

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8.3 Running staff (railways)

We have shown the CTG of Running staff separately due the differences in their pay.

Running staff have two important differences in their pay. The first is that their pay

component has a huge variable pay based on running kilometers. This component a very

necessary (and apparently effective) component gives in hand a very high gross pay to

the running staff. We have cost the minimum alternative pay that the running staff will

receive if they do not run many kilometers. These are not assumptions but facts;

nevertheless the apparent difference in costing running staff pay stands out due to this. Table 8-4: Running staff pay scale

Post / Grade Basic Salary Annual Increment Final Payment

S4 2750.00 72.50 4400.00 S5 3050.00 77.50 4590.00 S7 4000.00 100.00 6000.00 S8 4500.00 125.00 7000.00 S9 5000.00 150.00 8000.00 S10 5500.00 175.00 9000.00 6000.00 9800.00 S12 6500.00 200.00 10500.00 S13 7450.00 225.00 11500.00

The second aspect is that their HRA, CCA etc. are cost at 130% of basic plus DP of the

corresponding pay-scale. Their benefits and eventually their pension also go higher due

to this fact.

The CTG for running staff will be displayed after the CTG along with the CTG of all the

levels of other railway employees.

The pension of the running staff is more than the pension of the other railway employees

by 55%.

This increases the amount the government has to save every month. The contribution

comes to 40% per month as against 30% for others.

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8.4 Bungalow Peon (not in CTG)

Some levels and above in the railways have a peon. But this peon is attached to the

position and hence not a benefit the employee is receiving. Hence the cost of the peon is

not added to the compensation costs to the employee.

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8.5 CTG of representative levels in the railways

The cost to company for railway employees categorized by class of city is displayed here. Table 8-5: CTG of representative levels in railways in different class of cities

Post/Grade CTG per month for A1 city

A class city

B1 class city

B2 class city

C class city

Unclassified city

S1 10489 9886 9831 9801 9479 9383

S2 10961 10344 10289 10259 9930 9832

S3 11086 10460 10405 10375 10042 9942

S4 11420 10771 10716 10686 10342 10239

S5 12428 11692 11617 11582 11174 11059

S6 12895 12125 12050 12015 11590 11470

S7 15623 14663 14578 14518 13948 13798

S8 18646 17573 17488 17428 16802 16633

S9 19654 18469 18384 18324 17642 17454

S10 21707 20410 20325 20265 19526 19320

S11 25009 23487 23227 23167 22316 22072

S12 25089 23567 23307 23247 22396 22152

S13 27940 26204 25944 25884 24926 24646

S14 27646 25898 25638 25578 24615 24333

S15 30477 28617 28157 28097 27077 26777

S16 33479 31394 30934 30874 29742 29404

S19 37048 34738 34278 34218 32973 32598

S21 44520 41760 41300 41240 39770 39320

S24 51388 48110 47650 47590 45862 45325

S26 64161 60411 59951 59891 57926 57311

S29 70183 65983 65523 65463 63273 62583

S30 81379 76279 75819 75759 73119 72279

S31 78998 73898 73438 73378 70738 69898

S32 81272 75801 75341 75281 72456 71554

S33 87812 81902 81442 81382 78337 77362

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Table 8-6: CTG of Running staff (railways)

Post/Grade CTG per month for A1

A B1 B2 C Unclassified

S4 16761 15907 15832 15797 15330 15196

S5 18387 17445 17370 17335 16824 16675

S7 23724 22494 22409 22349 21644 21449

S8 26383 25006 24921 24861 24083 23864

S9 28729 27206 27121 27061 26210 25966

S10 30663 28994 28909 28849 27925 27657

32957 31142 30882 30822 29825 29532

S12 35671 33710 33450 33390 32319 32002

S13 39342 37103 36843 36783 35574 35210

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9 CTG - ARMED FORCES This section calculates the cost to government for the armed forces. The armed forces are

vastly different from the civilian employees when it comes to pay. Their pay scales are

different, the no. of levels is different and the list of allowances and benefits they have is

also different. However the gross pay that they get has the same set of items that a

civilian (general category) government employee has. We shall look at the gross pay and

then at the benefits.

9.1 Constituents of gross pay for armed forces

The gross pay for armed forces consists of the following items:

• Basic pay (calculated at the midpoint of the pay-scale

• Dearness pay

• Dearness allowance

• Rank pay for Officers

• HRA for Officers

• CILQ (compensation in lieu of quarters for PBOR (personnel below officer rank))

since combatants in barracks are not in receipt of HRA

• CCA

• Classification allowance

o For PBOR only in the army (not in navy and air force)

• Kit maintenance allowance

• Transport Allowance

• Uniform allowance

There are a number of allowances that the armed forces have which we have not added to

the gross pay as they are specific either functionally or geographically. Uniform is given

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in the form of cash once in 7 years. Since it is given in the form of cash and the

difference is only in the label, it is added as an allowance (after dividing the amount by

84) to the gross pay. The same is not done for PBORs as they get the uniform in kind.

9.2 Pay scales in the armed forces

As brought out earlier, the pay scales of Armed Forces Personnel are different from those

of civilians. For the purpose of working out the CTG, we have concentrated on the

package available in the Army to Officers and to the Group Y of Army PBORs as they

constitute the largest numbers. The CTG of Naval and Air Force personnel as well as

other groups in the Army will be broadly similar. Table 9-1: Pay scale of officers of the three forces

Rank Pay Scale

Lieutenant/ Sub Lieutenant/ Flying Officer Rs.8250-300-10050

Captain/Lieutenant/Flt. Lieutenant Rs.9600-300-11400+ rank pay ofRs.400

Major/Lt. Cdr./Sqdn.Leader Rs.11600-325-14850-+rank pay of Rs.1200

Lt. Colonel/Commander/Wg. Commander Rs.13500-400-17100-+rank pay of Rs.1600

Colonel/Captain/Gp Captain Rs.15100-450-17350-+rank pay of Rs.2000

Brigadier/Commodore/Air Commodore Rs.16700-450-18050+rank pay of Rs.2400

Major General/Rear Admiral/Air Vice Marshal Rs.18400-500-22400

Lieutenant General/Vice Admiral/Air Marshal Rs.22400-525-24500

Vice Chief/Army Commander/FoC-in-C/AOC-in-C Rs.26000/-

Chief of Army Staff/Naval Staff/Air Staff Rs.30000/-

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Table 9-2: Pay scale of PBOR(S)

Personnel Below Officer Rank (Army)

ARMY

Rank

Combatant

Group ‘X’

Combatant

Group ‘Y’

Combantant

Group ‘Z’

Sub Major 7250-200-10050 6750-200-9550 6600-200-9400

Subedar 6750-190-9790 6600-170-9320 6170-155-8650

Nb Subedar 5770-140-8290 5620-140-8140 5200-125-7450

Hav 4150-100-5650 3600-100-5100 3250-85-4525

Naik 3700-85-4975 3425-85-4700 3150-70-4200

Sepoy 3600-70-4650 3250-70-4300 3050-55-3875

Personnel Below Officer Rank (Navy)

Rank Combatant

Group ‘X’

Rank Combatant

Group ‘Y’

Combantant

Group ‘Z’

MCPO I 7400-200-10200 MCPO I 6750-200-9550 6600-200-9400

MCPO II 6750-190-9790 MCPO II 6600-170-9320 6170-155-8650

Chief Art 6000-125-8250 CPO 5620-140-8140 5200-125-7450

ART III-I 5120-100-7120 Petty Officer 4320-85-5595 3775-85-5050

ART IV 4550-100-6350 Leading

Seaman

3900-70-4950 3200-70-4250

ART V 4150-70-4360 Seaman I 3650-60-4550 3080-60-3980

APP 3200-60-3260 Seaman II 3325-60-3445 2865-55-3140

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Personnel Below Officer Rank (Air Force)

Rank Combatant

Group ‘X’

Combatant

Group ‘Y’

Combantant

Group ‘Z’

MWO 7400-200-10200 6750-200-9550 6600-200-9400

WO 6750-190-9790 6600-170-9320 6170-155-8650

JWO 5770-140-8290 5620-140-8140 5200-125-7450

SGT 4670-85-5945 4320-85-5595 3775-85-5050

CPL 4150-70-5200 3900-70-4950 3200-70-4250

LAC 4025-60-4925 3650-60-4550 3080-60-3980

AC 3675 3250 3050

9.2.1 List of allowances for armed forces

The list of allowances for the armed forces excluding the standard allowances like

dearness allowance, house rent allowance, City compensatory allowance etc. are quite

large compared to the general category employees owing to their nature of occupation

that requires generalists and specialists both operating sometimes in very difficult to live

geographies.

The allowances can be broadly classified into geographical and functional allowances.

The geographical allowances are

• Field area allowance

o Which has gradation of three levels with the highest classification being

highly active field area allowance

• Special compensatory allowance (during counter insurgency operations)

• High altitude uncongenial climate (in varying degrees)

In the next page we see a complete list of the package for the armed forces.

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Table 9-3: Package of pay, benefits and allowances for armed forces

CTC A Gross pay B Benefits C Variable pay Standard package

• Basic pay • Rank Pay for officers • Dearness pay • Dearness allowance • CILQ/ HRA • CCA • Transport allowance • Kit Maintenance

Allowance/ Composite Personal Maintenance Allowance

• Telephones • Newspapers • Children Education Assistance • Leave Travel Concession • Home Travel Concession • Form D/ Concession Vouchers • Pension • Gratuity • Leave encashment • Home Loan Subsidy, Vehicle

Loan Subsidy, • Computer Loan Subsidy • Group Insurance • Medical Facilities • Leave • Computer at home at certain

levels • Lower license Fee • Concession in Electricity &

Water changes • Free Rations & Free Transport for

school going children (Sahayaks)

Non-productivity linked bonus for PBORs

Package for special functions or qualifications

A+B+C as above + any/some of the following or all of the following • Non-Practicing Allowance (doctors) • Post Graduate Allowance (doctors) • Specialist Allowance (doctors) • Flying Allowance • Submarine Allowance • Technical Allowance • MARCOS Allowance • Special Compensatory Counter Insurgency Allowance (in field) (in modified field) (in

peace) • Handling Money (Navy) • Sea Going Allowance (Naval Officers) • Sea Duty Allowance (PBOR) • Submarine Technical Allowance • Hydrographic Survey Allowance • Project Allowance • Qualification Pay/ Grant • Special Forces Allowance • Para Allowance/ Para Reserve Allowance • Para Jump Instructor Allowance • Language Award/ Allowance • JAG Departmental Exam Allowance

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• Air Dispatch Pay • Spectacles Allowance • Diving Allowance • Dip Money • Acting Allowance • Aeronautical Technical Allowance • Air Steward Allowance • Air worthiness Certificate Allowance • Flight Change Certificate Allowance • Test Pilot & Flight Test Engineer Allowance • Good Conduct Badge Pay • Shorthand Allowance Unit Charge & Change Certificate Allowance


A+B+C as in the first row + any/some all of the following: • Island Area Special Allowance • Special Duty Allowance • Special Compensatory Allowance • Remote Area, Border Area, Hard Area, Tribal Area Allowance • Bad Climate Allowance • Highly Active Field Area Allowance • Field Area Allowance • Modified Field Area Allowance • Siachen Allowance • High Altitude Allowance • Hard Area Allowance • Bhutan Compensatory Allowance

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10 COST OF BENEFITS FOR ARMED FORCES

The army stands to benefit a lot from the following benefits. Given that they are usually

living in places that makes it difficult for them to live a “normal” life as compared to

civilians, they enjoy a number of benefits. Also given that the nutrition of armed forces is

critical to the safety of the nation, they receive benefits with respect to food too. Given

below are the benefits that they get and the assumptions used in pricing these. The

objective with respect to pricing the following and the rest of the benefits above has been

that the pricing should be conservative so as to not project an unusually high monetary

value.

We shall list below the benefits armed forces are in receipt of and included in the

calculation of CTG:

1. Newspaper

2. Telephone

3. Pension

4. Gratuity

5. Leave travel concessions

6. Form D / concession voucher

7. Ration

8. Children conveyance

9. canteen

10. electricity and water

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10.1 Pension for armed forces

Armed forces receive a defined benefit pension just as the other government employees.

The pension for PBOR forces is computed in a similar manner as the others with the

following differences:

1. Pension is calculated at the maximum of the pay scale

2. Weight is added to qualifying service for calculation of pension as the PBOR(s)

spend less time in service

3. The number of years this pension is paid is also much more than the number of

years for a civlian government employee.

This means that the government has to contribute much more per month in order to

give a defined benefit pension for the armed forces. The government for example has

to save hypothetically 74% of the basic pay of a Sepoy (calculated at the minimum of

the pay scale) every month.

Rank Minimum of the

payscale

Percentage of the

previous column

Amount per month

deposited to the pension

account

Sub Major 6,750.00 35 2025

Subedar 6,600.00 35 1980

Nb Subedar 5,620.00 35 1686

Hav 3,600.00 40 1260

Naik 3,425.00 60 1884

Sepoy 3,250.00 74 1983

For officers we have retained the 30% of basic pay as monthly contribution to the

hypothetical pension fund even though the retirement of officers vary from 52 years to 62

years for different ranks.

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10.1.1 Calculation of Pension for Sepoy

The calculations have two phases. The first is the growth of Salary. For calculation of the

exact pension amount the maximum of the pay range is taken into account. We have

doubled the basic pay arrived after the 17th year as the Sepoy gets 50% of the maximum

of the pay scale. The amount is multiplied by a factor to take into account the early

retirement (27/33) in case of Sepoy.

50% of this amount is the pension (45% of which he can commute). Table 10-1: calculation of pension for sepoy

Sepoy 74%

Basic DA Total

1.00 3,250.00 0.00 3,250.00 2,409.88 28,918.50 99,073.12

2.00 3,315.00 198.90 3,513.90 2,458.07 29,496.87 93,569.06

3.00 3,381.30 405.76 3,787.06 2,507.23 30,086.81 88,370.78

4.00 3,448.93 620.81 4,069.73 2,557.38 30,688.54 83,461.29

5.00 3,517.90 844.30 4,362.20 2,608.53 31,302.31 78,824.55

6.00 3,588.26 1,076.48 4,664.74 2,660.70 31,928.36 74,445.41

7.00 3,660.03 1,317.61 4,977.64 2,713.91 32,566.93 70,309.55

8.00 3,733.23 1,567.96 5,301.18 2,768.19 33,218.27 66,403.47

9.00 4,036.37 1,827.79 5,864.16 2,992.97 35,915.59 66,477.25

10.00 4,364.12 2,223.23 6,587.35 3,235.99 38,831.94 66,551.11

11.00 7,460.17 0.00 7,460.17 5,531.72 66,380.63 105,337.72

12.00 7,609.38 456.56 8,065.94 5,642.35 67,708.24 99,485.62

13.00 8,059.97 931.39 8,991.36 5,976.47 71,717.63 97,571.05

14.00 8,221.17 1,479.81 9,700.98 6,096.00 73,151.98 92,150.43

15.00 8,385.60 2,012.54 10,398.14 6,217.92 74,615.02 87,030.96

16.00 8,553.31 2,565.99 11,119.30 6,342.28 76,107.32 82,195.91

17.00 8,724.37 3,140.77 11,865.15 6,469.12 77,629.47 77,629.47

1,428,886.77

1,428,026.42

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In the above calculation, the pay grows till the 17th year when the sepoy retires. When he

retires, given his age, his multiplying factor for grant of commutation is much more at

15.64. The pension is assumed to be paid for a period of 10 years more than that of the

civilians.

10.2 Ration

Armed forces are in receipt of ration in the form of food to take care of their nutritional

requirements. The money equivalent of ration is cost, though the benefit they get is

substantial. The cost to government is the monetary alternative that the government is

willing to give if the government is unable to provide the ration. This amounts to Rs.

32.16 per day for PBOR and 32.35 per day for service officers.

10.3 Canteen

Armed forces employees can purchase their groceries and goods for monthly personal

needs at subsidized prices. The employee need not have to pay taxes on these goods. But

the cost providing this benefit is much more than the taxes. The administrative cost that is

needed to run the entire machinery is huge. But given the lack of data on all the costs that

go into providing this benefit, the team has assumed a minimal average expenditure for

which the tax exemption namely, 12% VAT is the benefit for the employee. Looking at

the consumer expenditure table for urban area consumers, the per capita consumption

averages at around 1000 Rs. (Refer Annexure 3). This is one of the few instances where

we have focused on the benefits and cost the cost of providing the benefit. Table 10-2: CTG per month due to ration and canteen

Serving officers

Rank Ration Canteen

Lieutnant/Sub Lieutnant/Flying Officer 971 120

Captain/Lieutnant/Flt. Lieutnant 971 120

Major/Lt. Cdr./Sqdn Leader 971 120

Lt. Colonel/Commander/Wg.Commander 971 120

Colonel/Captain/Gp. Captain 971 120

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Brigadier/Commondore/Air Commondore 971 120

Major General/Rear Admiral/Air Vice Marshal 971 120

Lieutenant General/Vice Admiral/Air Marshal 971 120

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 971 120

Chief of Army Staff/Naval Staff/Air Staff 971 120

PBOR

Rank Ration Canteen

Sub Major 964.80 72.00

Subedar 964.80 72.00

Nb Subedar 964.80 72.00

Hav 964.80 72.00

Naik 964.80 72.00

Sepoy 964.80 72.00

10.4 Electricity and water

Armed forces get subsidy in electricity and water and hence a nominal charge has been

added as a cost. We added 100 rs per month as electricity charges for Officers Since in

the calculations we are using CILQ (Compensation in lieu of quarters) for PBORs which

includes furniture allowance (discussed later) and cost of electricity and water there is no

separate costing for electricity and water in the calculation of CTC for PBORs.

10.5 Children conveyance

Armed forces get conveyance for their children’s school transport for which a nominal

charge (Rs. 150 per month) has been added uniformly.

10.6 LTC

LTC for armed forces are more pronounced in terms of benefits and hence modified

suitably to reflect the additional benefits. For example officers and PBORs get extra

LTC, and are also in receipt of concession forms. Using a family size that varies with

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levels reaching a maximum size of four, and a standard distance similar to the LTC for

the general category of government employees the LTC benefit for army has been

calculated.

Unlike the general category, the LTC distance for armed forces has been calculated at the

maximum permitted distance (with respect to the annual leave travel concession) which is

1450 km. Thus the cost to government looks marginally high in comparison to the

general category.

The armed forces have a home travel concession every two years. Every year they can

avail of a leave travel concession. Apart from this they can travel in times of need at 60%

of the actual cost of travel. This benefit using Form-D is also shown as a cost to

government. Flying personnel and similar personnel in the navy can avail of a special

LTC which have not been shown in the CTG due their special nature.

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For a PBOR, who is eligible to go by sleeper class, it costs 337 Rs. one way. For the

personnel eligible in the ac three tier it costs the government 975 and 1366 for A/C two

tiers. A/C first class costs 2341 and air costs 8000 Rs. The table below shows the per

month cost to government:- Table 10-3: Leave travel concession(s) for armed forces

Rank HTC LTCA Form D

Lieutnant/Sub Lieutnant/Flying Officer 342 683 273

Captain/Lieutnant/Flt. Lieutnant 455 911 273

Major/Lt. Cdr./Sqdn Leader 455 911 273

Lt. Colonel/Commander/Wg.Commander 455 911 273

Colonel/Captain/Gp. Captain 455 911 273

Brigadier/Commondore/Air Commondore 780 1561 468

Major General/Rear Admiral/Air Vice Marshal 2000 4000 468

Lieutenant General/Vice Admiral/Air Marshal 2000 4000 468

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 1333 2667 468

Chief of Army Staff/Naval Staff/Air Staff 1333 2667 468

10.7 Reimbursement for hiring of Furniture

Armed forces are in receipt of furniture or reimbursement of cost of hiring furniture.

They can rent furniture from the market. For imputing value, the concession-al rates for

hiring of furniture have been used. This monetary equivalent undervalues the actual

benefit. For PBORs we are calculating their gross pay and CTG using CILQ instead of

HRA. Hence we are not adding furniture hiring reimbursement to their package.

10.8 Leave

Armed forces are in receipt of extra leave owing to their conditions of service. The extra

leave is definitely a cost to government and we have added the cost of extra leave into the

CTG as a benefit.

The extra leave is calculated as follows:

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General category civilian employees get 50 days Eligible leave(30 days earned leave plus

20 days half pay leave plus 8 days casual leave + 2 days restricted holiday) per year.

Armed forces have 90 days leave (excluding sick leave). (Officers- 60 days earned leave,

20 days CL, 20 days half-pay leave, (Sick leave not included and PBORs have 60 days

EL, 30 days casual leave but no half pay leave is payable)).

Since he/she can en-cash 300 days during retirement we calculate cost of the extra leave

of absence benefit available to the armed forces at 40 days per annum.

10.9 Housing loan

For the armed forces we have shown housing loan benefit similar to that of the general

category, except that the total amount of loan is limited to a maximum of Rs 2, 10, 000.

10.10 Sahayaks (Not in CTG)

Sahayaks are a privilege to the position posted at the residences of Army officers.

Officers at the senior level of all the three forces are also entitled to staff at home. Any

privilege to the position that is given to enhance the productivity of the position viz.

secretary and which do not benefit the person personally or his family cannot be added

under compensation. These benefits are not being added to the CTG.

10.11 Group insurance benefit (not in CTG)

The Armed forces manage their own group insurance fund; they contribute on their own

and also reap benefits from it. Since Government does not directly contribute to the group

insurance of armed forces we have not added group insurance benefit in the CTC of

armed forces.

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10.12 The CTG of armed forces

10.12.1 Table of benefits for armed forces

Below is the list of benefits shown as part of CTG and the amount for each level for officers Table 10-4: Table of benefits (armed forces officers)

Rank Tuition Newsp Telephones pension Gratuity computers Ration HTA LTCA Form D

Special LTC

Lieutnant/Sub Lieutnant/Flying Officer 0 0 2475 411 971 342 683 273 114

Captain/Lieutnant/Flt. Lieutnant 40 0 0 2880 411 126 971 455 911 273 114 Major/Lt. Cdr./Sqdn Leader 80 0 0 3480 411 126 971 455 911 273 114 Lt.Colonel /Commander / Wg.Commander 80 0 0 4050 411 126 971 455 911 273 114

Colonel/Captain/Gp. Captain 80 80 1500 4530 411 126 971 455 911 273 114 Brigadier/Commodore/Air Commodore 80 80 1500 5010 411 126 971 780 1561 468 195

Major General/Rear Admiral/Air Vice Marshal 40 160 1800 5520 411 126 971 2000 4000 468 667

Lieutenant General/Vice Admiral/Air Marshal 240 1800 6720 411 126 971 2000 4000 468 667

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 240 2800 7800 411 126 971 1333 2667 468 667

Chief of Army Staff/Naval Staff/Air Staff 240 2800 9000 411 126 971 1333 2667 468 667

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Rank H loan

Benefit

Car loan

subsidy

Compute

r Loan

subsidy

Childc

onveya

nce

cante

en

Medical

care

Leaves post

retirement

M

Leave

encashme

nt

Furnitur

e

Elecy Water

Sum of

all

benefits

Lieutnant/Sub Lieutnant/Flying Officer 664 80 120 738 1375 538 541 124 200 50 9584

Captain/Lieutnant/Flt. Lieutnant 664 80 126 150 120 984 1667 538 629 176 200 50 11324

Major/Lt. Cdr./Sqdn Leader 664 80 126 300 120 984 2188 538 760 216 200 50 12806

Lt. Colonel / Commander / Wg.Commander 664 762 126 300 120 984 2517 538 885 216 200 50 14512

Colonel/Captain/Gp. Captain 664 762 126 300 120 984 2850 538 990 216 200 50 17010

Brigadier/Commodore/Air Commodore 664 762 126 300 120 984 3183 538 1095 216 200 50 19098

Major General/Rear Admiral/Air Vice Marshal 664 762 126 150 120 984 3067 538 1206 302 200 50 23538

Lieutenant General/Vice Admiral/Air Marshal 664 762 126 0 120 738 3733 538 1468 302 200 50 25311

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 664 762 126 0 120 667 4333 538 1704 638 200 50 26492

Chief of Army Staff/Naval Staff/Air Staff 664 762 126 0 120 667 5000 538 1967 638 200 50 28621

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10.12.2 Table of benefits for PBOR (army)

Please note that Non productivity linked bonus has been added as part of benefits to the PBOR. The table below shows benefits only for

army. Table 10-5: Table of benefits for armed forces (PBOR)

Chldren conv

Ration Canteen Pension Gratuity HTA LTC Add.Rail Conc

Leaves Leave En

Medical Medical post

retirement

Vehicle Ad

Hloan Benefit

Sum of All

B∗

Sub Major 300 965 72 2363 451 325 650 364 1125 447 984 538 80 664 9608

Subedar 300 965 72 2310 641 325 650 364 1100 456 984 538 80 664 9730

Nb Subedar 300 965 72 1967 767 325 650 364 937 399 984 538 80 664 9293

Hav 300 965 72 1440 640 112 225 134 600 263 984 538 80 664 7299

Naik 300 965 72 2055 579 112 225 134 571 260 984 1046 80 664 8327

Sepoy 150 965 72 2405 479 84 169 134 542 251 738 1520 80 664 8494

∗ Sum of all benefits includes a non-productivity linked bonus of Rs. 202 per month.

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Table 10-6: Gross pay for Officers

C city C city Officers Rank

Gross pay for A1 city

Gross pay for A city

Gross pay for B1 city

Gross pay for B city

Gross pay for C city

Armed forces in Siachen

Armed Forces in HFAA&RLA

Gross pay with High Altitude +remote locality allowance High Al Area+Remote

Gross pay with flying allowance in a B1 city


Captain/Lieutnant/Flt. Lieutnant 26121 23811 23351 23291 22046 32221 25221 23971 28851

Major/Lt. Cdr./Sqdn Leader 33856 30843 30383 30323 28726 39114 32114 30934 37383

Lt. Colonel/Commander/Wg.Commander 38744 35286 34826 34766 32948 43581 36581 35281 41826

Colonel/Captain/Gp. Captain 43694 39786 39326 39266 37223 47781 40781 39481 46326

Brigadier/Commondore/Air Commondore 48644 44286 43826 43766 41498 51981 44981 43681 49076

Major General/Rear Admiral/Air Vice Marshal 46911 42711 42251 42191 40001 50511 43511 42211 47501

Lieutenant General/Vice Admiral/Air Marshal 56811 51711 51251 51191 48551 58911 51911 50611 56501

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 65721 59811 59351 59291 56246 66471 59471 58171 64601

Chief of Army Staff/Naval Staff/Air Staff 75621

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Table 10-7: CTG of armed forces (officers)

Officers Rank

CTG for A1 City

CTG for A City

CTG for B1 City

CTG for B2 City

CTG for C City

CTG for C City with siachen

CTG for C City with HFAA and RLA

CTG for C City HAA and RL

CTG for B1 city with Fly all &SLTC


Captain/Lieutnant/Flt. Lieutnant 37446 35136 34676 34616 33371 43660 36546 35296 40290

Major/Lt. Cdr./Sqdn Leader 46662 43649 43189 43129 41532 52034 44920 43740 50303

Lt. Colonel/Commander/Wg.Commander 53256 49798 49338 49278 47460 58207 51093 49793 56452

Colonel/Captain/Gp. Captain 60704 56797 56337 56277 54233 64906 57792 56492 63451

Brigadier/Commondore/Air Commondore 67742 63385 62925 62865 60596 71275 64080 62780 68370

Major General/Rear Admiral/Air Vice Marshal 70450 66250 65790 65730 63540 74716 67050 65750 71706

Lieutenant General/Vice Admiral/Air Marshal 82123 77023 76563 76503 73863 84889 77223 75923 82479

Vice Chief/Army Commander/FoC-in-C/AOC-in-C 92213 86303 85843 85783 82738 93630 85963 84663 91760

Chief of Army Staff/Naval Staff/Air Staff 104242

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Table 10-8: Gross pay (PBOR)

Rank

Gross pay for

A1 class city

Gross pay for A

Gross pay for B1

Gross pay for B

Gross pay for C

Gross pay for

unclassified

Gross pay for

unclassified in Siachen

Gross pay for CHFAA

Sub Major 17294 15884 15624 15564 14994 14694 22271 17604

Subedar 16990 15580 15320 15260 14690 14390 21967 17300

Nb Subedar 15006 13596 13336 13276 12706 12406 19983 15316

Hav 9915 8815 8740 8705 8340 8100 14707 10040

Naik 9261 8311 8236 8201 7836 7686 13973 9306

Sepoy 8906 7956 7881 7846 7481 7331 13618 8951

Table 10-9: CTG PBOR(S)

CTG A1 class city CTG for A

CTG for

B1 CTG for B CTG for C

CTG for

unclassified

CTG

unclassified

in Siachen

CTG for

CHFAA

Sub Major

27104 25694 25434 25374 24804 24504 32081 27212

Subedar 26720 25310 25050 24990 24420 24120 31697 27030

Nb Subedar

24299 22889 22629 22569 21999 21699 29276 24609

Hav 17214 16114 16039 16004 15639 15399 22006 17339

Naik 17588 16638 16563 16528 16163 16013 22300 17633

Sepoy 17400 16450 16375 16340 15975 15825 22112 17445

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Figure 10-1: Sepoy CTG Pie Chart

sepoy CTG breakup

TPBA40%

Pension15%

Ration6%

Gratuity3%

HTA1%

LTC1%

Leaves7%

Leave En1%

Medical4%

Medical post retirement

9%

HBA benefit4%

Chldren conveyance1%CCA A1

1%

Clas All1%

Additional Rail Concession

1%

Canteen0%

CILQ C4%

TA0%

CPMA0%ReimbTFe

0%

TPBAClas AllCCA A1CILQ CTAReimbTFeCPMAChldren conveyanceRationCanteenPensionGratuityHTALTCAdditional Rail ConcessionLeavesLeave EnMedicalMedical post retirementHBA benefit

The Sepoy’s CTG is heavily influenced by the fact that he spends only 17 years in

service. This has increased the cost of his benefits with pension constituting about 15% of

his CTG. The combined cost of medical facilities during and after service comes to about

the same weight as pension.

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Figure 10-2: CTG Pie Chart Major/Lt. Cdr/Sqdrn. Leader

Major/Sqdn Leader/Lt Cdr

BP+DP+DA57%

KMA0%

Form D1%

Special LTC0%

canteen0%

Gratuity1%

Ration2%

Childconveyance1%

LTCA 2%

HTA1%

pension7%

Transport Allowance2%Uniform Al

0%

Tuition0% HRA

13%

CCA1%

Medical care2%

Leaves5%

post retirementM1%

Leave encashment2%

Water0%

Elecy0%

Furniture0%Computer Loan subsidy

0%

Car loan subsidy0%

H loan Benefit1%

BP+DP+DACCAHRATransport AllowanceUniform AlKMATuitionpensionGratuityRationHTALTCA Form DSpecial LTCH loan BenefitCar loan subsidyComputer Loan subsidyChildconveyancecanteenMedical carepost retirementMLeavesLeave encashmentFurnitureElecyWater

The above Graph shows that pension still retains a significant weight at 7% of the CTG,

while the extra leave of absence available to the armed forces comes close with 5%

weight. The rest of the benefits have maximum of 2% weight as a percentage of the CTG.

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11 CTG-CPMF

11.1 Constituents of gross pay for CPMF

The CPMF forces are treated similar to the civilian forces with respect to pay. But there

are some minor differences which are listed below.

• The gross pay of CPMF hence contains the same set of allowances as the general

category but the officer cadre of CPMF gets a kit maintenance allowance.

• Moreover, for those below officer level, it makes sense to calculate CILQ instead of

HRA as they are anyway on duty away from their home.

• There are however some special allowances for special cadre within CPMF.

• For example national security guards receive special allowances. They get 25%

extra pay (25% of BP+DP+DA) and also get 13.25 rupees per month as rum

allowance.

• Employees of the Intelligence bureau get 15% of their basic +DP and they can en-

cash one month’s leave annually.

• The CPMF also have detachment allowance for posting in special areas like J&K and

North east. They also are in receipt of ration money which is shown below in a table.

• In the cost to government of CRPF, personnel below officer level can avail of a

benefit of en-cashing one month’s pay if they forgo their leave. We have added this to

the CTG.

• LTC and HTC for CPMF are cost in a two year cycle as against 4 year cycle for the

general category.

• Non productivity linked bonus is shown as part of CTG for CPMF

• A tabular representation of all the benefits of CPMF personnel is given below:

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Table 11-1: List of components of Pay, allowances and Benefits for CPMF

CTC A Gross pay B Benefits C Variable pay Standard package Basic pay

Dearness pay Dearness allowance HRA/ CILQ CCA (at half the rates) Transport allowance Ration Money Allowance Kit Maintenance Allowance/ Washing Allowance Uniform Allowance (officers)

Telephones Newspapers Children Education Assistance Leave Travel Concession Home Travel Concession Additional LTC Pension Gratuity Leave encashment Home Loan Subsidy, Vehicle Loan Subsidy, Computer Loan Subsidy Group Insurance Medical Facilities Leave Computer at home at certain level

Non-productivity linked bonus


A+B+C as above + any/some of the following or all of the following Overtime Allowance Non-Practicing Allowance (doctors) Nursing Allowance (nurses) Conveyance Allowance (doctors) Cash Handling Allowance Split Duty Allowance Deputation Allowance Allowance for Special Appointment Detachment Allowance Dog Handler Allowance Flying Allowance Training/ Institution Allowance


A+B+C as in the first row + any/all of the following: Hill Compensatory Allowance Island Area Special Allowance Special Duty Allowance Special Compensatory Allowance Remote Area, Border Area, Hard Area, Tribal Area Allowance Bad Climate Allowance

•

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11.2 Ration

The ration money CPMF personnel receive is the only benefit that they receive as part of

being in CPMF differentiating them from the general category up to the level of

commandant is given the amount specified below.

DG

Addnl. DG

IG

DIG

Comdt 722.00

2I/C 722.00

Dy Comdt 722.00

Asst Comdt 722.00

Subedar Major 722.00

Inspector 722.00

Sub.Inspector 722.00

ASI 722.00

Havaldar/head constable 722.00

Constable 722.00

Follower 722.00

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Table 11-2: Table of Gross pay by City for CPMF for different class of cities

Gross pay at A1 class city

A city B1 city

B2 city

C city

Un-classified city

CILQ

DG 65236 59326 59066 59006 55961 54986 0

Addnl. DG 56326 51226 50966 50906 48266 47426 0

IG 46426 42226 41966 41906 39716 39026 0

DIG 41476 37726 37466 37406 35441 34826 0

Comdt 36278 33001 32741 32681 30952 30416 0

2I/C 30586 27826 27566 27506 26036 25586 0

Dy Comdt 25636 23326 23066 23006 21761 21386 0

Asst Comdt 20686 18826 18566 18506 17486 17186 0

Subedar Major 16638 15146 14916 14886 14094 13850 14010

Inspector 16338 14846 14791 14761 13969 13725 13885

Sub.Inspector 13863 12596 12541 12511 11832 11625 11765

ASI 10150 9220 9165 9135 8625 8475 8585

Havaldar/Head Constable

8120 7375 7325 7308 6915 6795 6889

Constable 7749 7037 6987 6970 6594 6480 6571

Follower 6622 6020 5980 5965 5654 5556 5638

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Table 11-3: Table of CTG for CPMF

CTG at A1 city

A class city

B1 class city

B2 class city

C class city

Un-classified city

CILQ

DG 84868 78958 78698 78638 75593 74618

Addnl. DG 74514 69414 69154 69094 66454 65614

IG 63065 58865 58605 58545 56355 55665

DIG 55906 52156 51896 51836 49871 49256

Comdt 49995 46718 46458 46398 44669 44132

2I/C 42727 39967 39707 39647 38177 37727

Dy Comdt 36406 34096 33836 33776 32531 32156

Asst Comdt 29166 27306 27046 26986 25966 25666

Subedar Major 24456 22964 22734 22704 21912 21669 21829

Inspector 24156 22664 22609 22579 21787 21544 21704

Sub.Inspector 20980 19713 19658 19628 18949 18742 18882

ASI 16055 15125 15070 15040 14530 14380 14490

Havaldar/head constable 13397 12652 12602 12585 12192 12072 12166

Constable 12619 11907 11857 11840 11464 11350 11441

Follower 11136 10533 10493 10478 10168 10070 10152

12 CTG - POSTAL EMPLOYEES There is no separate costing of compensation that we have undertaken for the postal

employees. The reason is that though they are in receipt of function specific allowances

they are very similar to the general category of government employees with respect to

pay. We have hence not calculated the cost separately.

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13 EMPLOYMENT SECURITY & COST OF NO-EASY-EXIT

Going by the terms of reference we have tried to focus on the aspect of security that an

employee receives due to his/her being a government employee. We have worked out the

cost of “no easy exit” in this section. Pricing of job security is very difficult. Private

sector organizations surveyed mostly feel it cannot be priced. Some feel it can be, while

all unanimously feel it should not be. Even those that feel it can be do not have a method

of costing it.

Job security has two parts to it. One is what it costs the government to give job security.

The other is the value of the benefit the employee receives when he/she gets job security.

Due to job security, it is not possible for the government to engage in downsizing

programs. But on paper it is possible for the government to terminate the services of an

employee whom the government deems fit to be removed. But job security does cost the

government in terms of loss of productivity which can happen if the employee feels that

his/her lack of productivity cannot be penalized. But such a hypothesis cannot be

generalized; such a thought if ever present in the minds of some of the employees is

probably the result of lack of adequate systems to penalize employees or lack of

autonomy that should be delegated at appropriate levels.

Job security makes it difficult for the organization to expand or reduce its size of human

resource. May be it is possible to monetize it if we look at what benefit the employee

receives due to job security. If a person has no job security, he/she will have to save an

extra amount so that he can continue with his life style while searching for a job. This

would mean that at least 30-50% of his basic pay + dearness pay + dearness allowance

should be saved if he wants to brace himself for an unexpected downsizing event. This

gets worse if he/she is a Class C or D employee. Yet another way to price job security is

the amount he/she will spend in updating his/her skills so as to be employable. The exact

amount will not be easy to calculate. But looking at the private sector, where every

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employee is spending a few thousands of rupees to upgrade his knowledge and skills, the

figure in this case may not be very different from the earlier one.

Job security is more important for the C & D categories than B & A, as the latter are

more “employable” in a growing economy. For a typical employee in groups C & D,

government service even without the job security is much more beneficial in the light of

the benefits he is entitled to. Job security puts him/her in a secure position to take care of

the family without the worry about losing job. Even if someone gives a 100 percent raise

one may not leave a government job. Conservatively we can stick to the 50% difference

in pay to the nearest private sector job.

For an employee in Groups B & A, however, there is the option to leave the government

service if one gets a good offer. Examples of such exit are numerous. But how much rise

would one leave for is debatable. It is generally assumed that a rise of 20% in CTC, one

would be considering leaving the organization in the private sector, if other factors also

contribute to the decision. In respect of public servants, one would leave if at the least a

40% to 50% increase is given which comes close to the difference we calculated for the C

& D employees.

Thus employment security probably explains the difference in salary with the nearest

comparable private sector, though pricing it that way is still putting too small a price on

job security. As such, any quantification will only serve to underestimate the advantage

that job security offers.

The cost of easy exit however is to do with the government policy of making the

employee eligible for pension if and only if the employee has spent a minimum of 20

years in service. This can be changed if the government makes it the responsibility of the

employee to take care of his/her pension thus not putting any constraints on the employee

to remain in service.

Apart from employment security, the status of a government employee in the society

(social status) is also a powerful intangible benefit. The impact of a government job on

status is highlighted especially in the lower levels. At the higher level, members of civil

services carry a lot of “perceived power” which enhances the status one enjoys in the

society.

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Generally government servants enjoy a better work-life balance than the private sector

though this may not be true for a considerable section of railway employees or the armed

forces. Speaking of the Armed forces, not only are they a very respected employee group

they also have a challenging job that is probably unparalleled in any other sector.

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14 Employees’ Perceptions of pay

As part of the study, we gathered data on employee perception about their job, pay and

benefit, and how in their opinion their job compares with similar jobs in private sector.

We developed separate questionnaires for different establishments under government

service. While most of the items in the questionnaires were common, we had several

unique items as well. Thus we had an 85 item questionnaire for the Defence sector, while

CISF and Railways had a 79 item questionnaire. Postal department was administered a

74 item questionnaire. These items in the questionnaires were to be responded on a 7

point scale, the first three indicating different degrees of agreement, while the next three

indicating different degrees of disagreement. In case of lack of awareness on a particular

item, the respondents were to choose ‘don’t know’ as the alternative.

Broadly the questionnaire captured the following: Overall Satisfaction with the Job,

Satisfaction with Pay and Benefits, Perception about being a government servant,

Opportunities for recognition, promotion, and career growth, Importance of Job Security

vis-à-vis lower salary, Comparison with private sector in terms of pay and benefits, and

perception about specific areas such as Pension plans, Cash conversion of non-monetary

benefits, Leave benefits, Medical benefits, etc. We have included in this analysis the data

received from about 1350 respondents across Defence, Railways, Central Para-military

forces, and Postal establishment.

In the following sections, we present the overall findings, followed by sector specific

survey results.. In these analyses, we have combined the varying degrees of agreement

and disagreement into agreement and disagreement respectively.

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Employee Perception Survey: Summary

The summary of the findings is given below under various heads. Notable variations

across the sectors are highlighted.

Overall Results

If we were to look at the overall results, it is obvious that there is a sense of overall

satisfaction with the job that respondents in the survey express. It is also apparent that

they are by and large unhappy about the specifics of pay and benefits they receive. The

other areas of concern were the lack of career growth opportunity and recognition for the

good work that they do. In essence, there is a crying need for revamping the performance

management systems that is followed in the government system. On the intangible front it

is very important for the policy makers to realize that issues such as job security, pension,

etc., are considered a huge benefit by the respondents. Most of them felt a high paying

job cannot compensate for the security they get in the government service. There was

also an even distribution in the opinion that to a large extent the less salary in government

sector is compensated by the leave benefits. Though many of them would be happy to see

the cash equivalent of non-monetary benefits, aspects such as leave rules, etc, are very

important in giving the government service a distinct character of its own. By and large

we found the respondents supporting the case for a flexible exit policy and they also felt

that individual employees could be given a say in planning their pension plan.

Overall Satisfaction

The Overall Satisfaction of the respondents with their job was very high across sectors.

Relatively speaking we found the respondents from the armed forces displayed a

somewhat lower level of satisfaction when compared to their counterparts in the other

sectors.

Satisfaction with Pay and Benefits

Most of the specific dimension that dealt with the satisfaction with pay and benefits

received poor results. This indicates that while overall the respondents are satisfied with

their job they are dissatisfied with the pay and benefits. Across the sectors the pattern

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was consistent. The respondents from the Railways were slightly less dissatisfied in this

regard.

Perception about being a government servant

Majority of the respondents felt a sense of pride in being a government servant. However

they did not feel that this pride compensate for lack of adequate pay and benefits. It was

also important to recognize the fact that not so favorable response emerged in terms of

their opinion on how the society looks at the government servants. It was interesting,

however, to note that Railways did show a slightly different picture on this count and felt

that to an extent the pride compensate for the lack of pay and benefits.

Opportunities for recognition, promotion, and career growth

Lack of opportunities for recognition emerged as another area of concern for the

government employees as per the survey results. Once again this was felt consistently

across sectors. This included lack of promotional and career development opportunities.

While the response may not be lopsided in terms of lack of opportunities, the results

clearly indicated that there is no guarantee in the sector for an employee to get promoted

purely on the basis of his or her performance. Consistently, the weakness in the

Performance Appraisal process was getting highlighted. The CPMF respondents were

comparatively more dissatisfied on this count.

Importance of Job Security vis-à-vis lower salary

By and large the respondents gave a positive picture about the job security element in the

government sector. From the response it was also evident that even though the salary

may be less when compared to the private sector, the job security is certainly a driving

force behind the employees continuing service in the sector.

Pension plans, Cash conversion of benefits, Leave & Medical benefits, etc.

The respondents felt that the nature of present pension plans encourages employees to

stay on just to avail of the pension benefits. And they felt some sort of flexibility needs

to be brought in to address the situation. To a lesser extent the respondents also felt that

employees should be allowed a say in their pension plan. Medical benefit, quite

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unexpectedly drew some flak and the respondents were not satisfied with their medical

benefits in the government service. Leave travel facilities were by and large seen in a

positive light. Not surprisingly, employees felt that most of the non-monetary benefits

could be converted to cash components.

Comparison with private sector in terms of pay and benefits

While the job security factor certainly made the government sector job more attractive

than private sector, in terms of actual pay and benefits, the government sector was pitted

against the private sector in a very unfavorable light by the respondents.

Results of Employee Perception Survey: Overall Trends

The overall satisfaction of government employees was very high. However, majority of

the respondents across sectors showed a clear lack of satisfaction with pay and benefits.

For instance to the item ‘I like my present job very much’ as many as 89% agreed while

only 11% disagreed. Similarly for the item ‘I am overall very satisfied with my job’ while

68% agreed only 31% disagreed. However, a somewhat different picture emerged when

probed on pay and benefit of their job. As many as 60% agreed to the item ‘There are no

rewards for those who work here’ while only 37% disagreed. For the item, the amount of

pay I currently receive is comparable to what I think it should be only 29% agreed while

69% disagreed.

Further, 63% agreed to the item ‘I feel un-appreciated by the organization when I think

about what they pay me’ and only 32% disagreed. For the item ‘I feel I am being paid a

fair amount for the work I do’ 46% agree while 53% disagreed. On similar line, to the

item ‘I don't feel my efforts are rewarded the way they should be’ while 67% agreed 30%

disagreed. Quite expectedly 67% agreed to the statement ‘I am not satisfied with the

benefits I receive’ while 32% disagreed.

Similarly, while majority of the respondents laid emphasis on the pride associated with

working in the government sector that substantially dropped when asked whether this

pride compensates for the relatively lower salary that they receive. To the item, ‘the

pride I derive by being a government servant is very important to me’ as high as 83%

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agreed while 15% disagreed. 75% agreed that ‘being a Government Servant saves me

from compromising on my values and ethics’ and a whopping 90% agreed that ‘by being

a government employee I am serving the country’.

However such positive feelings substantially dropped when quizzed on equating this

pride with benefits. For instance, to the item ‘the joy of associating with the government

is a significant non-monetary benefit to me’ only 56% agreed while 37% disagreed.

Similarly only 45% agreed to the item ‘the pride of being a government servant is more

important than the pay and monetary benefits’ while 53% disagreed. Further 59% agreed

to the statement ‘the pride of association with the government does offset the lower pay

(compared to the private sector) to some extent’ while 35% disagreed. About 54%

agreed to the statement ‘ I do not mind the relatively less salary in Government Service as

the joy of serving the nation is a reward in itself’ while 44% disagreed.

Finally an area of concern is the perception that ‘the society looks down upon the

government servants’ was supported by 46% while 50% disagreed with that. Another

area of concern was the largely negative perception that the employees shared in terms of

the policy and practices regarding recognition of talent, promotional avenues, or career

development opportunities. For instance, to the item ‘when I do a good job, I receive the

recognition for it that I should receive’ only 51% agreed while 47% disagreed. A

disturbing response the disagreement of 64% of the respondents to the item ‘those who

do well on the job stand a fair chance of being promoted in my organization’ while only

35% agreed. Quite on similar line, as a high as 77% felt that ‘there is too little chance for

promotion on my job’. While there was an even distribution with 48% responding in

affirmative to the statement ‘the present job gives me enough opportunities to utilize my

talents’ and 51% disagreeing; only 33% agreed to the item ‘The opportunity for career

growth is adequate in my organization’ and 66% disagreed.

The weakness of Performance evaluation system was evident from the response to ‘the

Annual Performance Evaluation practiced in our organization help employees in their

developmental plans’ with 45% agreeing and 49% disagreeing. Similarly only 39%

agreed to the item ‘my organization encourages employees to plan for their career

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growth’ while 59% disagreed. While the exact implication of this statement may be open

to debate, 47% of the respondents agreed to the item ‘my job as a government servant

provides me with adequate time and opportunity to pursue my other interests’ while 52%

disagreed.

Regarding the pay structure, an overwhelming majority (95%) opined that ‘there is a

pressing need to review and rationalize the pay structure to improve employee

efficiency.’ Only 38% agreed to the item ‘the pay structure presently prevailing in

government ensures efficiency.’ Similarly, to the item, the pay structure presently

prevailing in government ensures employee satisfaction’ only 37% agreed while 62%

disagreed.

Regarding the existing pension plans, a majority of the respondents felt that current

scheme forces the employees to stay on in the service just to avail the pension benefits.

They also felt that it should be made flexible, and something like a 5 year minimum cut-

off should be adequate with a proportionate reduction in the pension amount. For the item

‘the 20 years mandatory service forces employees to spend that many years in service

with the sole objective of getting pension’ a whopping 80% agreed while only 17%

disagreed. Similarly, to the item ‘it is necessary to reduce the minimum qualifying

service to 5 years, for entitlement of pension -with a proportionate reduction in the

pension amount’ while 57% agreed 38% disagreed. In terms of flexibility in exit policy,

77% agreed to the statement, ‘a reduction in the minimum qualifying service for pension

will go a long way in evolving a flexible exit policy for the government servants’ While

not equally unequivocal, about 53% endorsed the view that ‘Government should let

employees plan their own pension so that they can exit at their will’ and only 43%

disagreed.

Similarly, cutting across sectors, the respondents were of the opinion that many non-

monetary benefits could be converted to cash components and that some discretion

should be allowed to the employees in deciding their pay mix. For the item ‘pay in the

government sector should have more focus on cash aspects than retirement benefits as

employees can allocate their resources wisely found agreement from 57% of the

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respondents while 41% disagreed. Indicating their preference for cash, 67% agreed to the

statement ‘I would prefer if the government gives me equivalent cash instead of giving

me various benefits’ while 27% disagreed. Further, 68% agreed to the statement ‘I think

the cash component of the pay in the government sector is too low compared to the non-

monetary benefits that the government employees get’ and only 26% disagreed. On the

same line, 77% agreed to the item ‘I feel that the cash component in the pay packet

should be must more than turn non-monetary benefits’. Similarly 56% agreed to the item

‘I should be given the option to decide on the pay mix at the beginning of every year’

while 32% disagreed. The item ‘I feel that Pay in the government should focus more on

cash aspects and less on retirement, benefits because employees can plan and fund their

own retirement’ found endorsement from 46% while 51% disagreed with it.

To the item ‘employees should be allowed to choose the extent of cash component as

against the non-monetary benefits’ about 76% agreed while 18% disagreed. However, to

the statement ‘by giving more cash to the employees, government can do away with the

pension plan & let employee plan their pension’ only 43% agreed while 53% disagreed.

An overwhelming majority of the respondents felt that job security was important and

that they were continuing in spite of the lower salary, because of the job security. For

instance to the statement, ‘a secure job is more important to me than a high paying job’

while 73% agreed only 27% disagreed. Equally overwhelmingly positive was the

response to the item ‘even if my job is not as high paying as a private sector job, it is the

job security that make me continue here’ where 85% agreed while 15% disagreed. In the

same line, 86% agreed to the item ‘I am happy working with the government sector as it

gives me a secure job’ while 14% disagreed. .

Regarding the specific facilities, the majority of the respondents felt that medical

facilities were not very attractive and that it compared unfavorably with the private

sector. There was mixed response to the Leave Travel Concession available. To the item

‘the medical benefits and allowances are certainly attractive in my organization’ only

39% agreed while 59% disagreed. Similarly to the item ‘medical benefits and allowances

in government sector is more attractive than in the private sector’ only 33% agreed while

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63% disagreed. In the same line, 65% agreed to the statement that medical benefits in my

organization are inadequate to meet the needs of the employees’ while 35% disagreed.

While they are satisfied with the leave benefits, they do not think that it is in excess.

However they are open to the idea of curtailing the leave benefit in lieu of monetary

component. For instance, to the item ‘the quantum of various types of leave can be

curtailed by compensating with cash’ 70% agreed while 29% disagreed. Only 31%

agreed to the item ‘I feel that the government servants enjoy more paid leave than

necessary’ while 67% disagreed. Nevertheless a substantial 61% agreed to the item ‘I am

satisfied that, as a government servant, I enjoy excellent leave benefits and holidays’

The response regarding Leave travel allowance was mixed. To the item, ‘the leave travel

allowance is one of the most attractive benefits we are entitled to’ while 51% agree, 45%

disagreed. Similarly to the item, ‘almost everyone in the government sector avails his/her

LTA facility’ 59% agreed while 34% disagreed.

While an overwhelming majority felt that government accommodation was indeed a

significant benefit, they felt that it is difficult to get one, in spite of their entitlement.

They also felt that the House Rent Allowance is grossly inadequate to meet their

requirement. To the item ‘Government granted accommodation is a great benefit’ 78%

agreed while 21% disagreed. For the item ‘though I am entitled, I do not have

government accommodation’ 57% agreed while 39% disagreed. Further for a related

item ‘the HRA I am entitled to is inadequate to meet my accommodation expenditure’ a

whopping 78% agreed while 21% disagreed.

When the respondents were asked to compare the pay and benefit they receive with that

of the private sector an overwhelming majority felt that the private sector employees

were getting a better package and it cannot be compared. However, majority felt that it

would not be difficult for them to land in a suitable job in the private sector if they

desired. For instance to the item ‘looking at the monetary aspects alone, I feel that the pay

is less in Government service compared to the private sector’ while 92% agreed 8%

disagreed. Even to the item ‘if one puts the non-monetary along with monetary benefits

of pay, it more than equals the pay in the private sector’ agreement was only 22% while

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70% disagreed. On the same line majority of the respondents disagreed (72%) to the

item ‘I feel that, taking all the benefits and pay together, the pay package in Government

Service is comparable to the private sector’. To the item ‘the relatively lesser salary we

get in Government is, to a large extent, compensated by leave benefits, i.e. EL, CL & SL,

as compared to the private sector’ 45% agreed while 52% disagreed.

When probed individual specific reasons, 44% agreed to the item, ‘a 10.00 AM to 5.00

PM job is an important reason why I continue in the government service, rather than

opting for a private sector job’ while 52% disagreed.

Majority of the respondents were confident as reflected in the 64% agreement received to

the statement ‘with my qualifications, finding and attractive job in private sector will not

be difficult’. However 51% agreed that ‘private sector recruiters have an aversion to

recruit from government sector’ Majority (58%) also felt ‘longer service in government

sector makes one less attractive to private sector recruiters’

Results of Employee Perception Survey: CPMF

From the data it is observed that an overwhelming majority of the CPMF employees who

responded to the survey are satisfied with their job. The respondents felt that they liked

their present job very much (89% agreed vs 10% disagreed), their overall satisfaction is

very high (71% satisfied vs 25% not satisfied), and that their job is interesting to be fully

engaging in (66% agreed vs 29% disagreed)

However, when it came to satisfaction with Pay and benefit, it reflected a different

picture. While 72% agreed that they are not satisfied with the benefit they receive, only

26% disagreed. Similarly more than 70% felt that their efforts are not rewarded the way it

should be. Almost 66% felt that the pay they receive makes them feel unappreciated.

About 70% of the respondents felt that the existing pay structure is not conducive to

ensuring efficiency or to ensuring employee satisfaction. And thus an overwhelming

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majority (92%) felt that there is a pressing need to review and rationalize the pay

structure to improve employee efficiency.

Majority of the respondents (68%) felt that the medical benefits are inadequate. However

for another question on medical benefits only 50% of the respondents felt that the

medical benefits and allowances are not attractive. Similarly only 37% of the respondents

felt that medical benefits and allowances in government sector is more attractive than in

the private sector.

It was observed from the survey results that the employees displayed an extremely

positive disposition towards being a government servant. Whether it is the pride

associated with being a government servant (80%), or the fact that by being a government

servant they are serving the country, or the opportunity to uphold the values and ethics

(76%). However, some of the less positive aspects were also noted. For instance when

asked whether the pride of being a government servant is more important than the pay

and benefits, only 58% agreed. Similarly, almost 50% of the respondents agreed that the

society looks down upon the government servants. Further, when asked whether the joy

of associating with the government is a significant non-monetary benefit, only 59%

agreed.

There was an overall negative perception among the respondents regarding recognition or

promotion opportunities or career development avenues.

As many as 86% respondents agreed that there is too little chance for promotion. Only

38% agreed to the statement that those who do well on the job sand a fair chance of being

promoted. Organizations support for developmental plans (53% agreed) or for career

growth (47%) reflected mixed response. About 49% felt that their job gave them

opportunities to use their talents.

There was a general support for reduction in the minimum qualifying service for pension,

as well as allowing employees more say in planning their own pension plan. For instance,

as many as 78% agreed for a reduction in the minimum qualifying service for pension.

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Similarly, 80% agreed that the 20 years mandatory service forces employees to spend that

many years in service with the sole objective of getting pension. Sixty four percent

agreed that Government should let employees plan their own pension so that they can exit

at their will.

Majority of the respondents felt that non-monetary benefits could be converted to cash

component and that employees should be allowed to choose the extent of cash

components. For instance more than 70% of the respondents felt that all the benefits

currently being given should be converted into cash and paid as part of pay. Similarly

more than 80% felt that employees should be allowed to choose the extent of cash

component as against the non-monetary benefits. About 60% felt that more focus should

be on cash aspects, and less on retirement benefits. About 65% of respondents felt that

they should be given the option to decide on the pay mix.

Majority of the respondents gave importance to a secure job and were happy that they, as

government employees, had a secure job. For instance, 83% felt that it is the job security

that makes them continue in the government job as opposed to the private sector job.

About 70% felt that it is more important to have a secure job than a high paying job.

While almost 72% of the respondents mentioned that almost everyone in the government

sector uses his/her LTA facility, only 53% felt that the leave travel allowance is one of

the most attractive benefits they are entitled to.

While most of the respondents (81%) felt that government granted accommodation is a

great benefit to employees, most of them do not get the benefits of this (76%). Similarly

65% of the respondents felt that the HRA I am entitled to is inadequate to meet my

accommodation expenditure. 76% of the employees felt that as CPMF employees they

hardly get any benefits from the government’s HRA policy

The comparison between government job and private sector job gave mixed results.

While on the monetary aspects it fared much lower than private sector job, the

government job compensated by status, prestige, etc.,

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For instance while 40% felt that, taking all the benefits and pay together, the pay

package in Government Service is comparable to the private sector, only 34% agreed that

if one puts the non-monetary along with monetary benefits of pay, it more than equals the

pay in the private sector. However, to the question that keeping in mind the intangible

benefits such as status, position, power, that we as government servants enjoy, we are

better off than comparable employees of private sector about 68% respondents answered

in the affirmative.

To a related question, 61% agreed that longer service in government sector is seen as a

liability by private sector recruiters. Similarly 54% felt that private sector recruiters have

an aversion to recruit from government sector. However, when it came to individual

related questions about their ability to find attractive jobs in private sector, majority of

the respondents felt that it was not a difficult thing.

The leave entitlements were positively viewed by majority of the respondents. However

they also felt that leave entitlement could be curtailed by compensating with cash. 58% of

the respondents felt that ‘the relatively lesser salary we get in Government is, to a large

extent, compensated by leave benefits, i.e., EL, CL & SL, as compared to the private

sector’. However, only 36% agreed that I feel that the government servants enjoy more

paid leave than necessary. Similarly only 49% are satisfied that, as a government

servant, they enjoy excellent leave benefits and holidays

About 70% of the respondents felt that various departments/services in Government have

too many allowances and benefits of sundry nature, which call for standardization.

Similarly, about 78% felt that many of our rules & procedures make doing a good job

difficult.

Majority of the respondents also felt that government does not compensate for the

hardship they undergo due to postings in difficult areas or for the separation from family

due to certain type of posting

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Results of Employee Perception Survey: Defence Sector

The overall satisfaction of government employees was very high. However, majority of

the respondents across sectors showed a clear lack of satisfaction with pay and benefits.

For instance to the item ‘I like my present job very much’ 79% agreed while only 21%

disagreed. However, to the item ‘I am overall very satisfied with my job’ this

endorsement dropped to 54% while 46% disagreed. On the positive side, however, as

high as 79% disagreed with the statement ‘I feel my job is meaningless.’ Continuing the

trend, 61% agreed to the statement ‘my job is pretty interesting to full engage myself in’

However, what was disturbing was the disagreement of 53% of respondents to the item ‘I

would prefer that my son/daughter joins the armed forces’ and only 34% agreed with this

statement.

When it came to satisfaction with Pay and benefit, it reflected a different picture. For

instance, to the item ‘I feel I am being paid a fair amount of work I do’ only 23% agreed

while 77% disagreed. In line with this trend, the statement ‘there are no rewards for those

who work here’ received endorsement from 64% and the statement ‘I am not satisfied

with the benefits I receive’ received endorsement from 79%. Further, for the statement

‘the amount of pay I currently receive is comparable to what I think it should be’ there

was only 14% endorsement while 84% disagreed. Similarly, 73% agreed to the item ‘I

don't feel my efforts are rewarded the way they should be’

The opinion on medical benefits presented a mixed picture. While 55% agreed to the

statement ‘Medical benefits in my organization is inadequate to meet the needs of the

employees’ only 44% disagree. Similarly only 40% agreed to the statement that ‘the

medical benefits and allowances are certainly attractive in my organization’ while 58%

disagreed. Quite expectedly only 39% agreed to the statement ‘medical benefits and

allowances in government sector is more attractive than in the private sector’ while 57%

disagreed.

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While Defence respondents largely took pride in being a government servant, they were

less enthusiastic in equating this pride with pay and benefit. For instance 80% agreed to

the item ‘the pride I derive by being a government servant is very important to me.’

Similarly 87% agreed to the statement ‘by being a government employee I am serving the

country’ while only 11% disagreed.

However to the item ‘I do not mind the relatively less salary in Government Service as

the joy of serving the nation is a reward in itself’ only 38% agreed while 62% disagreed.

Similarly only 36% agreed to the item ‘the pride of association with the government does

offset the lower pay (compared to the private sector) to some extent’ while 61%

disagreed. Continuing with this trend, 48% disagreed to the item ‘the joy of associating

with the government is a significant non-monetary benefit’ while 45% agreed.

Similarly, only 33% agreed to the item ‘the pride of being a government servant is more

important than the pay and monetary benefits’ while 66% disagreed. ‘Being a

Government Servant saves me from compromising on my values and ethic’ was a greed

to 59% of the respondents, while 58% agreed to the statement ‘ the society looks down

upon the government servants’ while 39% disagreed.

Reflecting the trend across different sectors, Defence personnel also felt that recognition,

promotion, and career development aspects were aspects that needed to be improved

substantially.

Only 41% felt that ‘those who do well on the job stand a fair chance of being promoted in

my organization’ while 58% disagreed. Only 39% agreed to the item ‘the Annual

Performance Evaluation practiced in our organization help employees in their

developmental plans’ while 51% disagreed.

Majority (53%) disagreed to the statement that ‘when I do a good job, I receive the

recognition for it that I should receive’ while 75% agreed with the statement ‘I feel un-

appreciated by the organization when I think about what they pay me.’

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Only 39% agreed that ‘the present job gives me enough opportunities to utilize my

talents’ while 60% disagreed with it. While 64% disagreed on ‘my organization

encourages employees to plan for their career growth’, 75% agreed that ‘there is too little

chance for promotion on my job’. To the item ‘the opportunity for career growth is

adequate in my organization’ 69% disagreed.

By and large the respondents were in agreement with having flexibility in pension plans,

or to giving more say to employees in devising their own pension plans.

For instance 78% felt that ‘the 20 years mandatory service forces employees to spend that

many years in service with the sole objective of getting pension’ while 57% agreed ‘it is

necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension

-with a proportionate reduction in the pension amount.’ For another item ‘a reduction in

the minimum qualifying service for pension will go a long way in evolving a flexible exit

policy for the government servants’ a whopping 77% agreed while only 11% disagreed.

Slightly equivocal were the response to the item ‘by giving more cash to the employees,

government can do away with the pension plan & let employees plan their pension’

where 43% agreed, while 54% disagreed. Similarly, 56% agreed to the item

‘Government should let employees plan their own pension so that they can exit at their

will’ while 39% disagreed.

Majority of the respondents were in favour of converting non-monetary benefits to cash.

For instance 51% agreed to ‘I would prefer if the government gives me equivalent cash

instead of giving me various benefits’ while only 27% disagreed. Similarly 63% agreed

‘I feel that all the benefits currently being given should be converted into cash and paid as

part of pay’ and higher percentage of 73% agreed to the item ‘employees should be

allowed to choose the extent of cash component as against the non-monetary benefits.’

On similar line, 67% agreed that ‘I should be given the option to decide on the pay mix at

the beginning of every year’ while 21% disagreed.

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For another item ‘I think the cash component of the pay in the government sector is too

low compared to the non-monetary benefits that the government employees get’ 69%

agreed.

For the item ‘I feel that Pay in the government should focus more on cash aspects and

less on retirement, benefits because employees can plan and fund their own retirement

benefits’ 53% agreed while 44% disagreed. Similarly to the item ‘I would prefer if the

government gives me equivalent cash instead of giving me various benefits’ 70%

agreed, while 68% agreed to the statement ‘the quantum of various types of leave can be

curtailed by compensating with cash’

Majority of the respondents considered job security as important. For instance 62%

agreed to the statement ‘A secure job is more important to me than a high paying job’

while 78% agreed to the item ‘I am happy working with the government sector as it gives

me a secure job’ Quite significantly 76% of the respondents from Defence sector

answered in the affirmative to the item ‘even if my job is not as high paying as a private

sector job, it is the job security that make me continue here’

There was mixed results regarding Leave Travel Allowance. While 51% agreed to the

item ‘almost everyone in the government sector avails his/her LTA facility’ only 46%

agreed to ‘the leave travel allowance is one of the most attractive benefits we are entitled

to’

While 77% agreed that ‘Government granted accommodation is a great benefit’ 72% said

‘though I am entitled, I do not have government accommodation.’ Similarly 68% opined

that ‘Hardly anyone gets government quarters, though they are entitled’ while 76% felt

‘the HRA I am entitled to is inadequate to meet my accommodation expenditure’

Once again reflecting the overall trend, the respondents felt that the pay and benefits in

government service do not compare favorably with that in private sector. For instance

only 13% agreed to ‘I feel that, taking all the benefits and pay together, the pay package

in Government Service is comparable to the private sector’. Similarly a whopping 95%

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agreed to the statement ‘looking at the monetary aspects alone, I feel that the pay is less

in Government service compared to the private sector’ and only 13% agreed to the item

‘if one puts the non-monetary along with monetary benefits of pay, it more than equals

the pay in the private sector’

59% also felt that ‘longer service in government sector makes one less attractive to

private sector’

Reflecting a good amount of self-confident 73% felt that ‘it is not difficult for me to find

a more challenging job in the private sector’ and 77% agreed to the item ‘With my

qualifications, finding and attractive job in private sector will not be difficult’. However a

majority (55%) also felt that ‘private sector recruiters have an aversion to recruit from

government sector’

Continuing the same trend, only 33% agreed that ‘the relatively lesser salary we get in

Government is, to a large extent, compensated by leave benefits, i.e. EL, CL & SL, as

compared to the private sector’ and a similar percentage agreed with ‘keeping in mind the

intangible benefits such as status, position, power, that we as government servants enjoy,

we are better off than comparable employees of private sector’

There was satisfaction with leave entitlement. While 58% agreed that ‘I am satisfied that,

a government servant, I enjoy excellent leave benefits and holidays’ only 35% agreed to

the item ‘I feel that the government servants enjoy more paid leave than necessary’

Canteen & Ration facilities are unique to the Defence sector. We started with the item

‘armed forces are beneficiaries of a number of allowances that civilian employees do not

receive’ to which 47% agreed while only 43% disagreed

Similarly only 45% agreed to ‘an employee of the armed forces saves a considerable

amount of money by availing of the canteen services’ while 46% disagreed. Continuing

with this trend, only 31% agreed that ‘the rations that I receive as an armed force

employee is a substantial benefit to me’ while 40% disagreed.

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Interestingly, to the item ‘government should increase cash component instead of giving

us the canteen benefit’ 55% agreed, while 59% agreed that ‘armed forces canteen

services is a very significant benefit provided by the government’ while 36% disagreed

Only 38% agreed that ‘armed forces are in receipt of a number of travel concessions that

serve their needs’ while 42% disagreed.

Importantly only 17% agreed that ‘the pay package compensates for my absence from my

family for most part of work life’ while 66% disagreed. Similarly only 26% agreed to

‘the hardship allowance I receive when posted in difficult areas serves its purpose’ while

54% disagreed. This has to be seen in context as 63% agreed that ‘I am separated from

my family for most part of the year due to the nature of my job’

There was an agreement that the pay structure needs revision to ensures employee

satisfaction. To the item ‘there is a pressing need to review and rationalize the pay

structure to improve employee efficiency’ 97% agreed. To the item ‘the pay structure

presently prevailing in government is not conductive to efficiently’ 82% agreed.

Similarly only 28% agreed to the item ‘the pay structure presently prevailing in

government ensures efficiency’ while 70% disagreed.

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Results of Employee Perception Survey: Railways

The overall satisfaction of Railway employees was pretty high. For instance to the item

‘I like my present job very much’ 93% responded in the affirmative, while the item ‘I am

overall very satisfied with my job’ attracted endorsement from 75%. While 79%

responded positively to the item ‘the job is pretty interesting to fully engage myself in’

only 7% agreed to the item ‘I feel my job is meaningless’

As in the case of other sectors the respondents were less positive on the pay and benefits.

For instance, 64% agreed to ‘I don't feel my efforts are rewarded the way they should be’

47% agreed to ‘I am not satisfied with the benefits I receive’. Similarly, 60% agreed to

the item ‘there are no rewards for those who work here’

Surprisingly, however, 70% agreed to the statement ‘I feel I am being paid a fair amount

for the work I do’ and only 46% agreed to the item ‘I feel un-appreciated by the

organization when I think about what they pay me’. Further 40% agreed to ‘the amount

of pay I currently receive is comparable to what I think it should be’ while 60%

disagreed.

The perception on medical benefits was largely reflective of the overall picture. For

instance, 67% agreed that ‘medical benefits in my organization is inadequate to meet the

needs of the employees’ and only 32% agreed to the item ‘The medical benefits and

allowances are certainly attractive in my organization’ while 77% disagreed to the

statement ‘medical benefits and allowances in government sector is more attractive than

in the private sector’

Majority of the respondents took pride in the fact that they are government servants. For

instance, 95% agreed that ‘by being a government employee I am serving the country’

while 86% agreed that ‘the pride I derive by being a government servant is very

important to me’. It was interesting to observe that while 73% agreed that ‘The pride of

association with the government does offset the lower pay (compared to the private

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sector) to some extent’ only 44% agreed to the statement ‘The pride of being a

government servant is more important than the pay and monetary benefits’

In the same line, 52% agreed that ‘I do not mind the relatively less salary in Government

Service as the joy of serving the nation is a reward in itself’ while 60% agreed that ‘the

joy of associating with the government is a significant non-monetary benefit to me’

Keeping in line with other sectors, here also it was observed that 83% agreed that ‘being

a Government Servant saves me from compromising on my values and ethics.’

However, once again it was observed that 43% felt ‘the society looks down upon the

government servants’

Only 40% agreed to the item ‘my organization encourages employees to plan for their

career growth’ while 59% disagreed. Similarly only 38% agreed to the item ‘the Annual

Performance Evaluation practiced in our organization help employees in their

developmental plans’ while 60% disagreed.

Only 28% agreed to the statement that ‘the opportunity for career growth is adequate in

my organization’ while 72% disagreed. While 51% agreed that ‘the present job gives me

enough opportunities to utilize my talents’ a large majority (68%) felt that ‘there is too

little chance for promotion on my job’.

Only 25% agreed that ‘those who do well on the job stand a fair chance of being

promoted’ while 75% disagreed.. Again, only 53% agreed that ‘ when I do a good job,

I receive the recognition for it that I should receive’ while 47% disagreed.

Largely, there was agreement to having flexibility in pension plans. 78% agreed to ‘the

20 years mandatory service forces employees to spend that many years in service with

the sole objective of getting pension’ while 55 % agreed to the statement that ‘it is

necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension

-with a proportionate reduction in the pension amount’ . Similarly 77% agreed that ‘a

reduction in the minimum qualifying service for pension will go a long way in evolving

a more flexible exit policy for the government servants’ while 50% endorsed

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‘Government should let employees plan their own pension so that they can exit at their

will’

Majority of the respondents from Railways chose to support introduction of more cash

components in lieu of the non-monetary benefits. For instance, 72% agreed to the

statement ‘employees should be allowed to choose the extent of cash component as

against the non-monetary benefits’ while 64% agreed to the statement ‘I feel that all the

benefits currently being given should be converted into cash and paid as part of pay’

However, to the item ‘I feel that Pay in the government should focus more on cash

aspects, and leave the retirement benefits planning to the individual employees’ only 40%

agreed while 59% disagreed.

72% agreed to ‘I feel that the cash component in the pay packet should be much more

than the non-monetary benefits’ while only 33% agreed to ‘I should be given the option

to decide on the pay mix at the beginning of every year’

While 64% agreed to ‘I think the cash component of the pay in the government sector is

too low compared to the non-monetary benefits that the government employees get’

about 68% agreed to ‘I would prefer if the government gives me equivalent cash instead

of giving me various benefits’

Interestingly only 30% agreed to the statement ‘by giving more cash to the employees

government can do away with a pension plan and let employees plan their pension’ while

a large number (68%) disagreed to this. Further, 68% felt that ‘the quantum of various

types of leave can be curtailed by compensating with cash’

In tune with the rest of the sectors, 76% mentioned ‘a secure job is more important to me

than a high paying job’ while a whopping 88% agreed that ‘even if my job is not as high

paying as a private sector job, it is the job security that makes me continue here’.

Consequently, 90% felt that ‘I am happy working with the government sector as it gives

me a secure job.

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Reflecting the same trend only 47% agreed that ‘almost everyone in the government

sector uses his/her LTA facility.’ Similarly only 41% agreed that the leave travel

allowance is one of the most attractive benefits we are entitled to’

While71% felt that Government granted accommodation is a great benefit, unlike in other

sectors only 38% said that ‘hardly anyone gets government quarters, though they are

entitled’. However, 83% agreed that ‘the HRA I am entitled to is inadequate to meet my

accommodation expenditure’ while 42% agreed ‘though I am entitled, I do not have

government accommodation’

As with the overall trends, Railway employees also felt that they do not compare

favorably with the private sector employees. For instance, only 27% agreed that ‘I feel

that, taking all the benefits and pay together, the pay package in Government Service is

comparable to the private sector’ while 73% disagreed. Even for the statement ‘if one

puts the non-monetary along with monetary benefits of pay, it more than equals the pay

in the private sector’ only 16% agreed while 78% disagreed. Similarly 89% agreed to

‘Looking at the monetary aspects alone, I feel that the pay is less in Government service

compared to the private sector’

However, to the statement, ‘the intangible benefits such as status, position, power, that

we as government servants enjoy, we are better off than comparable employees of private

sector’ about 46% agreed while 54% disagreed.

While 59% agreed that ‘longer service in government sector is seen as a liability by

private sector recruiters’ 53% agreed that ‘it is not difficult for me to land a better paying

job in the private sector if I so desire’

While 46% agreed that ‘private sector recruiters have an aversion to recruit from

government sector’ 51% agreed that ‘with my qualifications, finding an attractive job in

private sector will not be difficult’

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While 59% of the respondents have endorsed the item ‘I am satisfied that, as a

government servant, I enjoy excellent leave benefits and holidays’ only 29% agreed to’ I

feel that the government servants enjoy more paid leave than necessary’ while 69%

disagreed

Specific questions were asked about the facility of Railway Passes. An overwhelming

majority (79%) disagreed with the statement ‘I believe that railways employees have too

many allowances’

While 85% agreed to the statement ‘I feel that railway passes given to us is a significant

benefit’ 70% felt that ‘I feel that employees use the railway passes facility at the most

50% o f their entitlement’

97% of the respondents agreed to the item ‘there is a pressing need to review and

rationalize the pay structure to improve employee. Only 38% agreed to the item ‘the pay

structure presently prevailing in government ensures efficiency’ while 48% agreed to ‘the

pay structure presently prevailing in government ensures employee satisfaction’

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Results of Employee Perception Survey: Postal Department

Like their counterparts in the other sectors, the respondents from the postal sector also

expressed positive feelings towards their job. . For instance 95% agreed that ‘I like my

present job very much’ and 74% endorsed that ‘I am overall very satisfied with my job’.

Only 10% agreed to ‘I feel my job is meaningless, while 84% agreed that ‘The job is

pretty interesting to fully engage myself in’

However the respondents were largely disappointed with their pay and benefits. For

instance 70% responded by endorsing the item ‘I am not satisfied with the benefits I

receive.’ Similarly 59% agreed to the item ‘I don't feel my efforts are rewarded the way

they should be’. Further only 45% agreed to ‘I feel I am being paid a fair amount for the

work I do’ while 32% agreed to ‘The amount of pay I currently receive is comparable to

what I think it should be.’ Similarly 60% felt that ‘there are no rewards for those who

work here’.

There was overall a negative perception towards the medical benefit. While 69% felt

agreed to the item ‘medical benefits in my organization is inadequate to meet the needs of

the employees’ only 35% agreed to the statement ‘medical benefits and allowances in

government sector is more attractive than in the private sector’.

By and large the respondents held positive attitude towards being a government servant.

For instance, 92% felt that ‘by being a government employee I am serving the country’

while 87% agreed to the item ‘the pride I derive by being a government servant is very

important to me’

However, unlike some of the other sectors, majority (61%) of the respondents endorsed

the statement ‘I do not mind the relatively less salary in Government Service as the joy of

serving the nation is a reward in itself’ and 61% agreed that ‘the joy of associating with

the government is a significant non-monetary benefit to me’

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While 80% agreed that ‘being a Government Servant saves me from compromising on

my values and ethics’ 62% disagreed to the statement that ‘the society looks down upon

the government servants.’ Both these results are away from the trend seen in other sectors

The results regarding recognition, promotion, and career development, reflected the trend

in other sectors. For instance 64% agreed to the item ‘I feel un-appreciated by the

organization when I think about what they pay me’ while only 36% agreed to ‘my

organization encourages employees to plan for their career growth’. 78% agreed with the

statement ‘there is too little chance for promotion on my job’ while only 37% agreed with

‘those who do well on the job stand a fair chance of being promoted ‘.

Similarly 52% endorsed the statement ‘The Annual Performance Evaluation practiced in

our organization help employees in their developmental plans’ while only 38%

supported the item ‘the opportunity for career growth is adequate in my organization’.

While 45% agreed to the item ‘when I do a good job, I receive the recognition for it that I

should receive’ 55% disagreed with it.

As reflected in other sectors, the respondents displayed a preference for flexibility in the

pension plans. For instance, 76% endorsed the statement ‘the 20 years mandatory service

forces employees to spend that many years in service with the sole objective of getting

pension’ and similarly 75% endorsed the item ‘a reduction in the minimum qualifying

service for pension will go a long way in evolving a more flexible exit policy for the

government servants’

While 51% agreed that ‘it is necessary to reduce the minimum qualifying service to 5

years, for entitlement of pension -with a proportionate reduction in the pension amount’

51% disagreed with the item ‘by giving more cash to the employees government can do

away with a pension plan and let employees plan their pension’. Similarly 52%

disagreed with the item ‘Government should let employees plan their own pension so

that they can exit at their will’

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Majority of the respondents were in favour of introducing cash components in place of

non-monetary benefits. For instance, 78% said ‘employees should be allowed to choose

the extent of cash component as against the non-monetary benefits’ while 68% endorsed

‘I feel that all the benefits currently being given should be converted into cash and paid as

part of pay’

Similarly, while 36% agreed to ‘ I feel that Pay in the government should focus more on

cash aspects, and leave the retirement benefits planning to the individual employees’ as

high as 79% agreed to “I feel that the cash component in the pay packet should be much

more than the non-monetary benefits’

Further 59% endorsed the item ‘I should be given the option to decide on the pay mix at

the beginning of every year’ 70% agreed to ‘I would prefer if the government gives me

equivalent cash instead of giving me various benefits’.

Similarly 70% responded positively to the statement ‘I think the cash component of the

pay in the government sector is too low compared to the non-monetary benefits that the

government employees get’ while 52% endorsed the view that ‘Pay in the government

sector should have more focus on cash aspects than retirement benefits as employees can

allocate their resources wisely.’ Interestingly it was noted that 81% felt that ‘the

quantum of various types of leave can be curtailed by compensating with cash’

While 83% agreed that ‘a secure job is more important to me than a high paying job’ an

overwhelming 92% felt that ‘even if my job is not as high paying as a private sector job,

it is the job security that makes me continue here’. Consequently 87% endorsed the view

that ‘I am happy working with the government sector as it gives me a secure job’.

While 68% agreed that ‘almost everyone in the government sector uses his/her LTA

facility’ another 65% agreed ‘the leave travel allowance is one of the most attractive

benefits we are entitled to’

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While 82% agreed that ‘Government accommodation is a great benefit’ 60% felt that

‘hardly anyone gets government quarters, though they are entitled’. Similarly while 60%

felt that ‘though I am entitled, I do not have government accommodation’ 84% felt ‘the

HRA I am entitled to is inadequate to meet my accommodation expenditure’

Once again majority of the respondents compared themselves unfavorably with their

counterparts in private sector when it came to pay and benefits. For instance, 75%

disagreed with the statement ‘I feel that, taking all the benefits and pay together, the pay

package in Government Service is comparable to the private sector’ while only 26%

agreed to the statement ‘if one puts the non-monetary along with monetary benefits of

pay, it more than equals the pay in the private sector.’ Similarly an overwhelming

majority (93%) felt that ‘looking at the monetary aspects alone, I feel that the pay is less

in Government service compared to the private sector‘

However, 70% agreed that ‘the intangible benefits such as status, position, power, that

we as government servants enjoy, we are better off than comparable employees of private

sector’ Similarly 52% felt that ‘the relatively lesser salary we get in Government is, to a

large extent, compensated by leave benefits, i.e., EL, CL & SL, as compared to the

private sector’

While 50% agreed that ‘private sector recruiters have an aversion to recruit from

government sector’ 52% agreed that ‘longer service in government sector is seen as a

liability by private sector recruiters’. However 57% felt that ‘it is not difficult for me to

land a better paying job in the private sector if I so desire’ and 59% felt ‘it is not

difficult for me to find a more challenging job in the private sector’.

While 78% agreed endorsed the statement ‘I am satisfied that, as a government servant, I

enjoy excellent leave benefits and holidays’ 75% disagreed with the item ‘I feel that the

government servants enjoy more paid leave than necessary’

About 50% of the respondents agreed to the item ‘I feel that various departments/services

in Government have too many allowances and benefits of sundry nature, which call for

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standardization’ while 55% disagreed to the statement ‘the pay structure presently

prevailing in government ensures efficiency’. Similarly 62% disagreed that ‘the pay

structure presently prevailing in government ensures employee satisfaction.” An

overwhelming majority (96%) of the respondents felt that ‘there is a pressing need to

review and rationalize the pay structure to improve employee efficacy’

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15 GOVERNMENT VS. PRIVATE SECTOR & PSUS

The team had carried out a survey amongst the private sector organizations to understand

the components of CTC in a more detailed manner. Specifically, the organizations were

asked for the components of CTC. They were also asked to list those components of

compensation that were not included in the CTC. Along with the CTC, the survey sought

to obtain pay levels in the organizations (number of bands in case the organization is

broad banded), the pay differentials between the pay levels and the pay range within each

level. Not many organizations were targeted for this survey. The focus was to get data

from those organizations that mirrored the government in terms of the number of years in

existence and drew their pay policies from government. The organizations selected for

the comparison were those that government employees would probably join in case they

wanted to leave the government. These organisations were somewhat similar to the

government in terms of working style, work life balance and job security. Though private

sector organizations do not offer employment security, some are known for their HRD

practices that are employee oriented, that a downsizing program would be the last on

their list.

These organizations numbering just 4 were also asked to share their views, on pricing job

security and work life balance. All of them felt that job security should not be priced nor

should work life balance. Their data is shared below. But the data with respect to pay

levels cannot be directly compared with the government as the rationale for number of

levels is organization dependent. Moreover, what they pay for each level also cannot be

compared. For such a comparison benchmark jobs in government should be identified

using compensable factors and later these jobs should be compared across the industry.

That is a huge operation that would take time, financial resources and finally may prove

to be not so successful in terms of the output and final outcome. The survey should be

seen only with respect to those items that can be compared viz. components of CTC, the

weight of basic pay and pay differentials across pay levels.

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15.1 Pay mix of a representative private sector organizations

The organization’s rank in the industry with respect to pay is given in the table below.

The pay differentials range from the standard 15 to 20% in the lower management level

to even 130% in the senior management level. Within these levels, the pay ranges from

60% to 130% from the midpoint in the range usually though one organization has a

slightly narrower range. The organizations add almost everything that we have added.

One of the organizations surveyed has a defined benefit pension.

Orgn 1 Org 2 Org 3 Org 4 Industry Construction conglomerate Fin. Mfg. pay rank in the industry top payer 75th %tile 50th %tile 50th %tile Pay levels 19 15 na NA Broadband if any 6 7 6 4 Pay differentials Lower 13% to 20% 25% to 30% 15% to 20% 30 Middle 13% to 20% 35% to 40% 15% to 20% 80 Senior 15% to 20% 35% to 40% 15% to 20% 65 pay range in each level 60 to 130% 65% to 120% 70 to 130% 10 to 80% components of CTC BASIC y y y Y Supplementary all y y Y postion pay n n n Y DA y y y N HRA y y y Y CCA y y y Y conveyance all y y y Y telephone all y y Education all y y LTC y y Y Performance linked Pay y y Car schemes for managers y n cars for managers y y computer schemes for Mgrs. y y Housing loan interest subsidy y y n PF y y y Y Gratuity y y y Y Pension n y N Medical (nominal value) y Furniture/AC Y LTC/holiday plan Y Esops n pricing Job Security can price but

should not be cannot be priced

Cannot be priced

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15.2 Comparison with the public sector

Comparison with the pay in the PSU and the government is inevitable and may be the

first step in comparison with other employers; but apart from the size, comparison with

PSUs is not the right one, for almost the same reason that comparison with the private

sector is not right viz. the definition of what industry the government employees belong

to. Further, public sector organizations are commercial entities and have considerable

flexibility in determining the salaries of their employees. Not only is a one-to-one

comparison of levels/grades with the government difficult, there is also considerable

variation across public sector organizations.. Any government employee would compare

his/her pay with public sector first before looking at the private sector. We shall largely

focus on the pay scale and the CTG and important items of pay that stand out. In the case

of NTPC, the CTC of NTPC at the lowest level is about 1.2 to 1.5 times higher than the

CTG of government. But as the levels go up, the CTG difference come down. The CTG

of NTPC does include the telephone allowance and cost of mobile (taken as once in two

years), but not the generation incentive that is inherently variable and may impact the

actual CTG.

We have also added PF contribution from the employer’s side, canteen reimbursement

and tea expenses reimbursement to the CTG of NTPC. With respect to IOC, the CTC of

IOC is consistently at least 2.1 times more than that of the similar government scale. Oil

sector are the highest paying of the PSU and their pay levels we feel is aligned with the

private sector.. The minimum pay of the lowest pay level is higher for all the PSUs by at

least Rs 1500. It goes up to Rs 2050 in the case of comparison with IOC. The number of

levels is much lesser for the PSUs. Largely HRA and CCA are as per government pay

rules in most PSUs. But certain public sector organizations do give higher allowances for

leased accommodation. Children’s education allowance is Rs 200 while it is Rs 40 for

government.

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Items Government NTPC IOC HAL Minimum of pay scale of the lowest pay level

2550 3750 4600 2900

No. of levels 34 25 17 22 HRA and CCA Similar to govt. Canteen allowance 0 630-820 475 2500 Education allowance 80 150 200 N A

In the table below, we have shown the starting pay of IOC in the various pay-scales, and

have shown the CTC comparison. The table columns show the percentage increase of the

CTC of IOC over the government’s CTG. It should be however noted that, such blind

comparison of CTC across pay scales assuming that the pay levels are equivalent is not

advised as the assumption of equality of pay-levels need not be a valid one. Also, the

PSU has to cap its maximum basic pay below 30000, while the government can go up to

that level. The comparison shown below makes sense at the lowest level. Some amount

of knowledge of how the levels were arrived at is needed before making comparison

across all pay levels.

Percentage increase of IOC CTC over government’s CTG Post / Grade

Basic Salary

Post / Grade

IOC Basic Salary

Scale in govt

% increase of CTC over govt pay A1

A B1 B2 C

I 4600 S1 2550 1.83 1.78 1.76 1.76 1.73

IV 5400 S9 5,000

1.07 1.05 1.04 1.04 1.03

A 12000 S15 8000 1.17 1.14 1.14 1.15 1.13

The above comparison is done for entry levels (entry grades, entry grade for officers etc).

The CTC difference diminishes as we go up the level. The table below compares NTPC

CTC with the government. We have taken the government’s cost of LTC, HTC, medical

benefits etc. due to non availability of data with respect to NTPC.

Percentage increase/decrease of Government pay with respect to NTPC

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Post / Grade

Basic Salary of NTPC (at the min. of scale

Basic salary of Govt at the min. of scale A1 A B1 B2 C

W-0 S1 3750 2550 1.23 1.30 1.25 1.25 1.30

E2 S15 8600 8000 0.97 1.02 0.99 0.99 1.03

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16 RECOMMENDATIONS ON PAY COMPONENTS Pay in India has a plethora of components most of them owing their existence to taxation

while the rest owes its reason to competition. In fact, the reason for the popularity of

CTC was the need to get the “complete” picture given the plethora of components.

Basically, HRA shows that the employer cares for the shelter of the employee apart from

just paying him/her for the position occupied. But actually, it is only a split in the total

pay (read CTC) rather than an extra amount given. Though a number of allowances gives

a clumsy look to government pay, it definitely makes other HR systems easier viz.

transfer of employees across geographies. The various geography related allowances

facilitate all India transfer some extent given that the employee feels compensated for

taking the pain to go to a high altitude place or an island.

The recommendations that follow with respect to the CTC draws both from our views on

the subject and the information gathered from the employees through the survey. There

definitely is an opportunity to redesign the pay package. The responses from the

employees tell us that we can seek to design a cash rich compensation and shift the onus

of saving for the pension to the employee. Of course Job security being a huge benefit

shall be retained along with all this.

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16.1 Analysis of the strength of various CTC components

The CTG of employees belonging to the general category is approximately 3 times the

basic pay at the minimum of the pay scale. Category wise details are given in the tables

below. Table 16-1 CTG as a multiple of Basic: General Category

Grade/Post The no. by which BP

should be multiplied to

arrive at CTG (A1 city)

The no. by which BP should be

multiplied to arrive at CTG (C city)


multiplied to arrive at CTG

(unclassified)

S1 3.81 3.42 3.38

S5 3.91 3.42 3.38

S9 3.60 3.20 3.16

S12 3.50 3.09 3.05

S15 3.46 3.04 3.00

S23 3.48 3.09 3.05

S33 3.22 2.85 2.82

Table 16-2 CTG as multiple of Basic pay: Railways





multiplied to arrive at CTG (C

city)


multiplied to arrive at CTG

(unclassified)

S1 4.11 3.72 3.72

S5 4.07 3.66 3.63

S9 3.93 3.53 3.49

S12 3.86 3.45 3.41

S15 3.81 3.38 3.35

S17 3.72 3.27 3.27

S23 3.74 3.35 3.31

S33 3.38 3.01 2.98

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Table 16-3 Armed Forces (PBOR): CTG as a multiple of basic pay

Grade/Post The no. by which

BP should be

multiplied to arrive

at CTG (A1 city)

The no. by which BP


arrive at CTG (C city)

The no. by which BP


arrive at CTG (C city)

Sepoy 5.35 4.91 4.86

Havaldar 4.78 4.34 4.28

Subedar

Major

4.02 3.67 3.63

Table 16-4 Armed forces (Officers): CTG as a multiple of Basic pay

Grade/Post The no. by which BP should be

multiplied to arrive at CTG (A1 city)


multiplied to arrive at CTG (C city)

Lieutnant/Sub

Lieutnant/Flying Officer

3.80

3.38

Major/Lt. Cdr./Sqdn

Leader

3.56 3.18

Vice Chief/Army

Commander/FoC-in-

C/AOC-in-C

4.02 3.16

Table 16-5 CPMF: CTG as a multiple of Basic Pay




The no. by which BP

should be multiplied

to arrive at CTG (C

city)

The no. by which BP


arrive at CTG (unclassified

city)

DG

3.26

IG 3.46 3.06 3.03

Comdt 3.50 3.12 2.40

Asst Comdt 3.65 3.25 3.21

Havaldar/head constable 4.19 3.25 3.77

Constable 4.14 3.76 3.75

Follower 4.27 3.90 3.86

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For the general category, benefits are 30% of the CTG at S1 level and 21% of CTG at

S34 level (for A1 city). For the armed forces (officers) benefits are 30% of CTG at lower

levels and 27% of the CTG at the highest levels. For PBORs however, the benefits are

more pronounced. It is 50% at the sepoy level and 35% at the Subedar Major level.

The private sector pay is not so heavily loaded towards benefits as the Government’s

CTG though more data is needed to make a strong comparison. Private sector has a

component of variable pay which is less pronounced at the lower levels, something

missing in the government’s pay structure.

Amongst the benefits pension takes the cake (approximately 7-10%) at various levels.

The rest of the benefits diminish in weight as we move from lower levels to the higher

levels. This is because during costing we have assumed the same amount with respect to

components like medical insurance across all levels. It is also for this reason that the

number of times basic (at the minimum of the pay) needs to be multiplied to arrive at

CTG goes down as we go up the levels. Components like Gratuity and Home loan have a

maximum limit which reduces the weight of benefits as a percentage of CTG. HTA and

LTA uniformly occupy less then 1% of the CTG. The table below shows benefits as a

percentage of CTG for general category employees.

The table shows pension as the most pronounced benefit followed by the home loan

subsidy. Medical benefit which is higher in the lower levels goes down as one goes up

the levels as the amount is fixed.

Telephone as a benefit which appears only in the higher levels has a weight of

approximately 3% of the benefits while leave encashment maintains an approximate

weight of 2% across all levels.

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Post /

Grade

LTA HTA Telephones Newspapers Pension Gratuity Leave encash

Cost medical net Deductions


Motor vehicle subsidy


HBA interest subsidy per month

Ginsurance Benefit

Sum of all benefits

S1 0.43% 0.22% 0.00% 0.00% 7.87% 2.82% 1.72% 7.18% 5.53% 0.00% 0.00% 4.23% 0.28% 30.69%

S2 0.55% 0.27% 0.00% 0.00% 7.67% 2.74% 1.68% 9.24% 5.27% 0.00% 0.00% 4.12% 0.27% 32.58%

S3 0.54% 0.27% 0.00% 0.00% 7.69% 2.76% 1.68% 9.13% 5.20% 0.00% 0.00% 4.13% 0.27% 32.44%

S4 0.52% 0.26% 0.00% 0.00% 7.73% 2.76% 1.69% 8.84% 5.04% 0.00% 0.00% 4.16% 0.48% 32.23%

S5 0.48% 0.24% 0.00% 0.00% 7.83% 2.81% 1.71% 8.08% 4.61% 0.00% 0.00% 4.21% 0.44% 31.09%

S6 0.46% 0.23% 0.00% 0.00% 7.90% 2.83% 1.73% 7.77% 4.43% 0.00% 0.00% 4.25% 0.42% 30.68%

S7 0.38% 0.19% 0.00% 0.00% 8.15% 2.79% 1.78% 6.41% 3.66% 0.00% 0.00% 4.38% 0.35% 28.64%

S8 1.00% 0.50% 0.00% 0.00% 8.26% 2.51% 1.80% 5.59% 3.29% 0.00% 0.00% 4.44% 0.31% 28.19%

S9 0.91% 0.45% 0.00% 0.00% 8.33% 2.28% 1.82% 5.07% 2.99% 0.44% 0.44% 4.48% 0.28% 27.94%

S10 0.83% 0.42% 0.00% 0.00% 8.43% 2.10% 1.84% 4.67% 2.75% 0.41% 0.41% 4.53% 0.57% 27.37%

S11 0.71% 0.36% 0.00% 0.00% 8.53% 1.80% 1.86% 3.99% 2.35% 0.35% 0.35% 4.58% 0.49% 25.72%

S12 0.72% 0.36% 0.00% 0.35% 8.57% 1.81% 1.87% 4.02% 2.36% 0.35% 0.35% 4.61% 0.49% 26.21%

S13 0.64% 0.32% 0.00% 0.31% 8.74% 1.61% 1.91% 3.46% 2.10% 0.31% 0.31% 4.70% 0.43% 25.16%

S14 0.63% 0.32% 0.00% 0.31% 8.75% 1.60% 1.91% 3.44% 2.09% 0.31% 0.31% 4.70% 0.43% 25.11%

S15 0.82% 0.41% 0.00% 0.29% 8.67% 1.48% 1.89% 3.19% 1.94% 0.29% 0.29% 4.20% 0.77% 24.53%

S16 0.74% 0.37% 0.00% 0.26% 8.80% 1.34% 1.92% 2.88% 1.75% 0.26% 0.26% 4.26% 0.69% 23.81%

S17 0.74% 0.37% 0.00% 0.26% 8.80% 1.34% 1.92% 2.88% 1.75% 0.26% 0.26% 4.26% 0.69% 23.81%

S18 0.66% 0.33% 0.00% 0.23% 8.96% 1.19% 1.96% 2.41% 1.56% 0.23% 0.23% 4.34% 0.62% 22.93%

S19 0.68% 0.34% 0.00% 0.24% 8.91% 1.22% 1.95% 2.62% 1.60% 0.24% 0.24% 4.31% 0.63% 23.22%

S20 0.63% 0.31% 0.00% 0.22% 8.81% 1.13% 1.92% 2.30% 1.48% 2.10% 0.35% 4.26% 0.59% 24.32%

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Post /

Grade

LTA HTA Telephones Newspapers Pension Gratuity Leave encash

Cost medical net Deductions


Motor vehicle subsidy


HBA interest subsidy per month

Ginsurance Benefit

Sum of all benefits

S21 0.55% 0.27% 3.59% 0.19% 8.61% 0.98% 1.88% 1.99% 1.29% 1.82% 0.30% 4.17% 0.51% 26.34%

S22 0.52% 0.26% 3.40% 0.18% 8.68% 0.93% 1.90% 1.89% 1.22% 1.73% 0.29% 4.20% 0.48% 25.87%

S23 0.55% 0.27% 3.59% 0.19% 8.61% 0.98% 1.88% 1.99% 1.29% 1.82% 0.30% 4.17% 0.51% 26.34%

S24 0.47% 0.23% 3.08% 0.16% 8.81% 0.84% 1.93% 1.71% 1.11% 1.56% 0.26% 4.27% 0.44% 25.04%

S25 0.45% 0.22% 2.94% 0.16% 8.88% 0.81% 1.94% 1.63% 1.05% 1.49% 0.25% 4.19% 0.42% 24.58%

S26 0.71% 0.35% 2.73% 0.15% 8.95% 0.75% 1.96% 1.52% 0.98% 1.39% 0.23% 3.89% 0.39% 24.13%

S27 0.71% 0.35% 2.73% 0.15% 8.95% 0.75% 1.96% 1.52% 0.98% 1.39% 0.23% 3.89% 0.39% 24.13%

S28 0.47% 0.23% 3.08% 0.16% 8.81% 0.84% 1.93% 1.71% 1.11% 1.56% 0.26% 4.27% 0.44% 25.04%

S29 2.14% 1.07% 2.89% 0.26% 8.85% 0.66% 1.93% 1.34% 0.86% 1.22% 0.20% 3.42% 0.34% 25.24%

S30 1.37% 0.68% 2.46% 0.33% 9.20% 0.56% 2.01% 0.80% 0.74% 1.04% 0.17% 2.92% 0.29% 22.63%

S31 1.37% 0.68% 2.46% 0.33% 9.20% 0.56% 2.01% 0.80% 0.74% 1.04% 0.17% 2.92% 0.29% 22.59%

S32 1.29% 0.64% 2.32% 0.31% 9.29% 0.53% 2.03% 0.67% 0.69% 0.98% 0.16% 2.75% 0.27% 21.93%

S33 0.80% 0.40% 3.35% 0.29% 9.32% 0.49% 2.04% 0.62% 0.64% 0.91% 0.15% 2.55% 0.25% 21.80%

S34 0.70% 0.35% 2.95% 0.25% 9.47% 0.43% 2.07% 0.54% 0.57% 0.80% 0.13% 2.25% 0.22% 20.73%

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16.2 Existence of standard allowances

Standard allowances viz. housing, transport allowance, city compensatory allowances

owe their existence to taxation (as already stated). Apart from taxation, city

compensatory allowance helps in “localizing” pay to the cost of living in the city, as

dearness allowance is determined at a much broader level. This makes city compensatory

allowance a very important component of pay. But if housing allowance is determined as

a percentage of pay, CCA should follow a similar path in calculation. CCA should

technically change whenever DA changes, as it is a function of inflation. As an

alternative one could do away with CCA and have different DA values that differ

according to the class of city. There is also a new problem with organizations realizing

that they have to give monetary incentives (in the form of allowances) for their

employees so as to motivate them to work in rural areas. What was CCA for metros

becomes hardship allowance for rural areas (though not quantitatively). Even smaller

towns come under this category as they do not have schools and medical facilities that

metros and B class towns have.

The CCA has to be an ever changing amount and also should find its place in metros for

increased cost of living and in smaller towns as a kind of a hardship allowance. Given the

love for people to flock to metros, CCA is not necessary for metros. They probably need

a higher house rent allowance which is already there. Apart from basic pay and an

inflation component, others are not necessary (i.e. can be subsumed within the basic pay).

It is the tax benefits that make it necessary to show separate components in pay. This

gives rise to other allowances too like transportation allowance. There however is

another reason for all these allowances namely, contributory provident fund. PF is

calculated on basic+DA (and DP) and any allowance added to the basic will only increase

contributory PF (and even gratuity) making it even more costly to the employer.

The team is of the view that pay should be made simple and allowances kept at a

minimum. But in compensation, any component added to pay cannot be so easily

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withdrawn. To differentiate pay based on scales, basic pay and House rent allowance are

sufficient. Along with this dearness allowance will get added which will be determined

as a percentage of the basic pay. Transport allowance can also be there. But CCA should

be removed. There should be only the following allowances apart from basic pay

• House rent allowance

• Dearness allowance (which should ideally be different for metros and non-metros)

• Transport allowance (conveyance allowance).

Other allowances that are geography specific or function specific should be retained.

16.3 Pension

The response from the survey shows that pension is a highly respected/loved benefit.

However for the government it makes sense if it can transfer the onus of managing it to a

separate pension fund. Moreover, the government can give the 25-30% of the minimum

of pay-scale to the employee and let him/her park it in a pension fund. Transferring the

onus to the employee will also take care of the “lack of easy exit”. A step in this direction

has been taken by the government. As far as civilians (general category) joining after

1.1.2004 are concerned the new pension scheme is a contributory defined contribution

scheme.

Pension for armed forces should be retained as a defined benefit pension and managed by

the government. When the forces are fighting for our country the forces should feel

secure with respect to what their families will be getting in case of any unfortunate

incident. For the Jawans (PBOR), the pension is a very significant benefit and should be

retained as it is.

16.4 Army canteens

Benefits given to army viz. ration, canteen facilities etc. need to be revisited though the

ration seems to be a great benefit. The canteen as a benefit is getting mixed reactions,

though it should be seen more as a necessity (compensation) than as a benefit for areas

that are outside city limits. But canteens in cities and metros do not seem to add value.

The initial interaction the team had with some army officers gave the view that army

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canteens are not monetarily very beneficial. One way is to privatize the whole army

canteens so as to save money for the government in running these facilities. With the

retail industry in the rising stage, the army canteen facilities can be leased to a private

retail operator (or two to take care of competition).

16.5 Railway passes

The only unique benefit that railways have is the railway passes. Our discussion with the

very few people in the railways gives us a view that many do not use these passes. The

railways are not entitled to LTC. It is natural for employees of an organization to enjoy

some special benefits with regards to the final product of the organization. Hence

railways having special passes make sense. It also needs to be noted that, even if they

have a pass they have to get their tickets in the normal fashion and hence this does not

create any other advantage other than monetary compensation of the fare.

16.6 Gratuity

In the next few lines we offer no recommendations about gratuity. We only offer a caveat

regarding adding Gratuity to the CTC.

Gratuity is shown in the CTC calculation. However, Gratuity should be given only if the

employee has spent enough time in the service. Hence many private sector organizations

do not annualize gratuity. But some do, especially those that see higher attrition. Even

amongst those that do, no payment is made if the employee leaves within five years. But

annualizing Gratuity puts great pressure on the employer to pay the annual amount

sometimes, as attrition is a bigger problem.

Most of the traditional industries do not annualize gratuity as it defeats the very purpose

of paying gratuity. Gratuity is given for spending a minimum of five years in service.

16.7 Interest subsidies

Lastly interest subsidies to home loans and vehicle loans can be simplified by giving a

“interest rate subsidy” for a loan taken from any public sector bank. This saves a lot of

work on advances while retaining the benefit. Given the size of the government (in terms

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of number of employees), the government can negotiate with a leading PSU bank to offer

home loans to employees at reduced rate of interest. Of course, one might see a 0.5% or

1% reduction, but nevertheless it is a reduction. This can be done with vehicle loans too.

16.8 Medical facilities

The government employees probably have the most comprehensive health cover in the

country. There are no exclusions in the kind of diseases that are covered nor do medical

facilities cease post retirement. We sincerely doubt if there is any other employer to beat

that. Our recommendations are to continue with the present facilities to serve as a

benchmark to the industry. But we suppose that the administrative costs for the medical

facilities would be pretty high. The government can outsource the administration of

medical claims to an insurer to reduce human-days consumed in the management of

medical claims of the government employees.

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17 LIMITATIONS OF THE STUDY The study using some assumptions has priced many benefits. These assumptions do not

have any data backing it up in many cases due to time constraints and lack of data. This is

one of the biggest limitations to this study. However, the monetary value added has been

done at conservative levels so as to not exaggerate the picture. Secondly though we used

the response from the employees the sample used was considerably small given the lack

of time.

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18 Annexure

18.1 Premium Rates of Mediclaim Policies

Premium Rates of Mediclaim Policies of Oriental

Insurance Company Ltd. In India

Age in Years Sum Insured Domiciliary

Hosp. Limit 3m-20 21-35 36-45 46-55 56-60 61-70 above 70

50000 10000 609 677 809 1265 1799 2688 3600

75000 15000 883 981 1174 1836 2604 3886 5203

100000 20000 1179 1310 1566 2447 3483 5196 6960

125000 23750 1454 1615 1932 3026 4310 6436 8683

150000 27500 1728 1920 2295 3605 5136 7676 10405

175000 31250 1975 2194 2623 4142 5912 8846 12040

200000 35000 2221 2468 2951 4680 6687 10018 13678

250000 40000 2660 2956 3534 5672 8133 12222 16778

300000 45000 3100 3444 4117 6664 9581 14428 19878

350000 50000 3483 3870 4627 7573 10925 16494 22805

400000 50000 3867 4297 5138 8483 12267 18562 25735

450000 50000 4252 4724 5647 9392 13611 20628 28663

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Source: www.Indiastat.com

18.2 Age group wise expectation of life in India

Age Group-wise Expectation of Life in India

(1901-2002)

At Birth Age 10 Age 20 Age 30 Age 40 Age 50 Age 60 Age 70

Fe- Fe- Fe- Fe- Fe- Fe- Fe- Fe-

Census

Year Male

Male

Male

male

Male

male

Male

male

Male

male

Male

male

Male

male

Male

male

1901 23.63 23.96 34.73 33.86 28.59 28.64 22.9 23.82 17.91 19.12 13.59 14.5 9.53 10.02 - -

1911(a) 22.59 23.31 33.36 33.74 27.46 27.96 22.45 22.99 18.01 18.49 13.97 14.28 10 10.11 - -

1921 19.42 20.91 29.64 29.21 25.46 25.41 21.64 21.78 17.93 18.31 14.3 14.95 10.67 11.67 - -

1931(a) 26.91 26.56 36.38 33.61 29.57 27.08 23.6 22.3 18.6 18.23 14.31 14.65 10.25 10.81 - -

1941 32.09 31.37 41.2 38.56 35.02 33.11 29.03 27.89 23.67 22.91 17.77 18.17 12.59 13.68 - -

1951 32.45 31.66 38.97 39.45 33.03 32.9 26.58 26.18 20.53 21.06 14.89 16.15 10.13 11.33 - -

500000 50000 4635 5150 6157 10302 14955 22696 31590

Note : Minimum sum assured is Rs. 50000/-

Source : Lok Sabha Unstarred Question No. 1526, dated 01.12.2006.

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1961 41.89 40.55 45.21 43.78 36.9 35.63 29.03 27.86 22.07 22.37 16.45 17.46 11.77 12.98 - -

1971(b) 46.4 44.7 48.8 47.7 41.1 39.9 33.5 32 25.9 25.4 19.2 19.7 13.6 13.8 - -

1980(c ) 54.1 54.7 56.1 58 47 49.2 38 41 29.3 32.5 21.4 24.3 14.6 17 - -

1990-

94$

59.4 60.4 57.3 59.3 48.1 50.3 39.1 41.6 30.3 32.8 22.1 24.2 15.1 16.5 - -

1991-

95@

59.7 60.9 57.5 59.8 48.3 50.8 39.3 42.2 30.5 33.4 22.3 24.8 15.3 17.1 - -

1992-

96*

60.1 61.4 57.7 60.2 48.5 51.2 39.5 42.6 30.7 33.8 22.5 25.1 15.4 17.5 - -

1993-

97*

60.4 61.8 57.8 60.4 48.5 51.3 39.5 42.7 30.7 33.8 22.5 25.1 15.5 17.5 - -

1994-

98*

60.6 62.2 57.8 60.6 48.5 51.5 39.5 42.8 30.8 34 22.6 25.3 15.5 17.7 10.2 11.6

1995-

99*

60.8 62.5 57.9 60.8 48.6 51.7 39.6 42.9 30.9 34 22.7 25.3 15.7 17.7 10.3 11.6

1996-00 61 62.7 57.9 60.9 48.6 51.9 39.7 43 31 34.1 22.8 25.5 15.8 17.8 - -

1997-01 61.3 63.6 58 61.3 48.7 52.2 39.8 43.3 31.2 34.4 23 25.7 16 18.1 - -

1998-02 61.6 63.3 58.2 61.5 48.9 52.4 40 43.6 31.4 34.7 23.2 26 16.1 18.3

Note : (a) : Expectation of life during the census years 1911 and 1931 relate to birth

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and age groups to 10-19, 20-29, 30-39, 40-49, 50-59, 60-69.

(b) : Based on 10% Rural and 20% Urban Sample.

(c) : Population projection for India 1981 -2001.

$ : Based on SRS relates to the period of 1990-94.

@ : Based on SRS relates to the period of 1991-95.

* : SRS based abridged life tables 1992-96 to 1995-99.

Source : Ministry of Health & Family Welfare, Govt. of India.

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18.3 Household consumption/consumer expenditure

MPCE Class-wise Value of Consumption of Broad Groups of Food and Non-food Items per Person for a Period of 30 days Using a Reference Period of 30 days for All Items and Using a Reference Period of 365 days for Clothing and Bedding, Footwear, Education, Medical (Institutional) and Durable Goods in Rural Areas of India (July 2004-June 2005)

MPCE Classes (Rs.)

all cla-

Item 0-235 235-270 270-320

320-365

365-410

410-455

455-510

510-580

580-690

690-890

890-1155

1155 & more sses

Cereal 69.21 79.6 86.98 91.47 95.26 98.83 101.91 106.42 110.83 113.67 119.17 134 100.65

Gram 0.19 0.31 0.42 0.52 0.58 0.61 0.68 0.78 0.82 0.94 1.34 2.01 0.73

Cereal Substitutes 0.06 0.07 0.09 0.15 0.27 0.25 0.27 0.37 0.48 0.69 1.04 1.48 0.39

Pulses & Pulse Products 8.2 10.78 11.98 13.57 14.86 16.28 17.18 18.27 19.91 22.28 24.85 31.23 17.18

Milk & Milk Products 4.42 9.31 13.65 20.29 27.9 33.8 44.28 53.11 63.89 84.26 113.58 137.9 47.31

Edible Oil 12.23 15.4 18.02 19.95 22.26 23.83 25.63 27.6 30.2 32.76 37.79 48.67 25.72

Egg, Fish & Meat 5 6.54 9.1 10.6 12.46 14.84 16.92 19.97 24.76 27.93 33.42 54.21 18.6

Vegetables 17.74 21.72 24.7 27.08 29.72 32.54 34.02 36.43 40.29 43.1 47.93 58.52 34.07

Fruits (Fresh) 1.48 2.19 2.75 3.53 4.54 5.69 6.5 7.86 10.1 13.98 20.38 35.2 8.44

Fruits (Dry) 0.27 0.49 0.65 0.82 1.11 1.25 1.55 1.94 2.35 3.24 4.81 8.24 1.98

Sugar 4.45 6.37 7.76 9.15 10.67 11.82 12.94 14.62 15.97 18.74 22.52 28.43 13.25

Salt 0.75 0.79 0.87 0.93 1 1.06 1.13 1.21 1.26 1.37 1.47 1.72 1.12

Spices 6.48 7.93 9.04 10.09 11.09 11.93 12.73 13.47 14.9 16.22 18.72 23.6 12.78

Beverages, Etc. 6.12 8.94 10.81 13.65 16.36 19.17 20.94 24.52 29.96 38.7 51.01 93.9 25.37

Total : Food 136.58 170.45 196.81 221.81 248.1 271.93 296.67 326.57 365.74 417.9 498.01 659.13 307.6

Pan 0.65 0.97 1.16 1.55 1.93 2.22 2.52 2.89 3.44 3.72 4.05 4.6 2.46

Tobacco 3.27 4.41 5.39 6 6.87 7.74 8.29 9.1 9.62 11.19 11.5 13.58 8.05

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Intoxicants 1.91 1.91 2.18 2.49 3.04 3.37 4.23 4.65 5.23 6.17 7.89 16.07 4.52

Fuel And Light 27.26 33.66 37.85 42.76 46.89 50.43 54.82 59.87 66.49 76.3 90.9 114.58 56.84

Clothing 2.37 3.76 5.7 8.05 10.73 13.48 17.52 21.85 29.07 44.53 63.39 136.43 25.33

Footwear 0.49 0.74 1 1.36 1.96 2.46 3.06 3.94 4.99 7.54 10.61 20.43 4.24

Education 1.65 2.79 3.54 5.39 6.58 7.29 9.95 11.5 15.55 25.77 35.87 87.24 14.9

Medical: Institutional 0.1 0.04 0.15 0.17 0.17 0.35 0.47 0.97 2.37 5.23 12.07 169.57 10.03

Medical: Non-Inst. 4.12 7.31 9 11.98 13.69 17.1 20.19 25.7 33.82 44.67 66.05 109.65 26.93

Entertainment 0.27 0.44 0.68 1.09 1.34 1.8 2.24 2.85 3.92 5.72 9.17 20.2 3.46

Minor Personal Effects 0.16 0.32 0.36 0.53 0.56 0.69 0.78 1.09 1.42 2.01 2.78 4.58 1.13

Toilet Articles 6.47 7.86 9.04 10.46 11.57 13.03 14.18 15.69 18.02 21.01 25.45 33.6 14.96

Other Hh Consumables 5.12 6.56 7.79 8.92 10.1 11.3 12.3 13.68 15.56 18.41 22.6 30.13 13.02

Conveyance 2.9 3.84 5.26 6.6 8.82 11.04 13.19 17.1 22.29 34.84 55.8 121.07 21.03

Other Consumer Services 5.42 7.57 9.06 10.74 11.97 13.29 15.53 18.09 21.96 31.75 47.57 99.06 21.18

Rent 0.07 0.06 0.22 0.33 0.39 0.57 0.8 1.32 2.37 3.65 7.53 28.56 2.77

Taxes And Cesses 0.19 0.3 0.36 0.45 0.62 0.69 0.8 0.99 1.24 1.65 2.51 5.84 1.12

Durable Goods 0.54 0.8 1.09 1.72 2.38 3.26 4.01 5.41 7.29 12.93 26.18 282.27 19.23

Total: Non-Food 62.95 83.35 99.82 120.59 139.62 160.14 184.88 216.68 264.66 357.09 501.93 1297.45 251.19

Total Expenditure 199.53 253.8 296.64 342.4 387.72 432.06 481.55 543.25 630.4 775 999.94 1956.57 558.78

Clothing:2nd Hand* 0.06 0.02 0.09 0.09 0.07 0.08 0.14 0.12 0.15 0.28 0.28 0.33 0.14

Durable Goods:2nd Hand* 0 0 0 0.02 0.1 0.06 0.04 0.13 0.22 0.4 1.5 21.44 1.24

Imputed Rent** 0 0 0 0 0 0 0 0 0 0 0 0 0 Alternative Estimates Based On 365 Days Recall (For 5 Non-Food Categories Only)

Clothing 19.83 23.44 25.44 28.84 32 34.33 37.06 40.42 44.55 51.95 63.75 85.41 39.05

Footwear 2.18 2.68 3.08 3.59 4.29 4.73 5.33 6.13 7.19 8.74 11.18 15.15 5.86

Education 2.93 4.55 5.42 7.24 8.74 10.17 12.76 14.93 19.6 30.26 43.01 93.36 18.06

Medical-Institutional 1.18 2.17 2.02 4.15 4.12 4.54 5.76 8.22 9.89 15.1 22.28 55.21 9.41

Durable Goods 4.59 5.84 6.85 7.42 10.17 10.64 13.31 16.64 20.1 29.49 54.21 141.91 21.74

Total Expenditure 225.11 284.36 328 376.93 425.24 469.66 520.78 585.92 672.44 814.44 1046 1651.65 579.17

Note : * : included in total expenditure. ** : not included in total expenditure. Source : National Sample Survey Organization.

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18.4 Percentage distribution of responses to survey

Percentage distribution in the general category

No. Statement Don't Know Agree Disagree

1 I like my present job very much 0.32 89.05 10.63 2 I am overall very satisfied with my job 0.82 68.47 30.71

3 Many of our rules & procedures make doing a good job difficult 2.07 77.09 20.84

4 The present job gives me enough opportunities to utilize my talents 1.25 47.9 50.86

5 The HRA I am entitled to is inadequate to meet my accommodation expenditure 1.65 77.85 20.5

6 I feel I am being paid a fair amount of work I do 0.78 46.45 52.77

7 I am not satisfied with the benefits I receive 0.89 67.06 32.06

8 I should be given the option to decide on the pay mix at the beginning of every year 12.58 55.87 31.56

9 I feel un-appreciated by the organization when I think about what they pay me 5.08 62.97 31.96

10 The amount of pay I currently receive is comparable to what I think it should be 1.92 29.16 68.93

11 There is a pressing need to review and rationalize the pay structure to improve employee efficiency

1.2 95.21 3.59

12 The pride I derive by being a government servant is very important to me 1.74 83.4 14.87

13 My job as a government servant provides me with adequate time and opportunity to pursue my other interests

0.67 46.94 52.4

14 I do not mind the relatively less salary in Government Service as the joy of serving the nation is a reward in itself

1.45 54.23 44.32

15 Though I am entitled, I do not have government accommodation 4.57 56.48 38.95

16

The pay structure presently prevailing in government (pay + allowances + non-monetary & retirement benefits) ensures employee satisfaction

1.51 36.81 61.68

17 The society looks down upon the government servants 3.65 46.41 49.95

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18 Government granted accommodation is a great benefit 1.85 77.58 20.58

19 Being a Government Servant saves me from compromising on my values and ethics 3.67 74.79 21.54

20 Almost everyone in the government sector avails his/her LTA facility 6.63 59.31 34.06

21 The joy of associating with the government is a significant non-monetary benefit to me 6.44 56.15 37.41

22 Hardly anyone gets government quarters, though they are entitled 3.31 58.91 37.78

23 I am satisfied that, a government servant, I enjoy excellent leave benefits and holidays 0.62 60.82 38.57

24 The pride of being a government servant is more important than the pay and monetary benefits

1.69 45.28 53.04

25

I feel that various department/services in Government have too many allowance and benefits of sundry nature, which call for standardization

12.57 58.11 29.32

26 By being a government employee I am serving the country 0.94 90.06 9

27 I am happy working with the government sector as it gives me a secure job. 0.62 85.67 13.72

28

The pay structure presently prevailing in government (pay + allowances + non-monetary & retirement benefits) is not conductive to efficiently

3.93 65.48 30.6

29

The pay structure presently prevailing in government (pay + allowances +non-monetary & retirement benefits) ensures efficiency

2.58 37.61 59.82

30 Those who do well on the job stand a fair chance of being promoted in my organisation

1.37 35.05 63.59

31 The Annual Performance Evaluation practiced in our organization help employees in their developmental plans

5.71 45.32 48.97

32 There are no rewards for those who work here 2.66 60.07 37.27

33 When I do a good job, I receive the recognition for it that I should receive 1.47 51.32 47.21

34 My organisation encourages employees to plan for their career growth 1.95 38.92 59.13

35 There is too little chance for promotion on my job 0.94 76.58 22.48

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36 The opportunity for career growth is adequate in my organization 1.27 32.72 66.01

37 I don't feel my efforts are rewarded the way they should be 3.49 66.8 29.72

38 Even if my job is not as high paying as a private sector job, it is the job security that make me continue here

0.61 84.74 14.65

39 A secure job is more important to me than a high paying job 0.44 72.9 26.66

40

It is necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension -with a proportionate reduction in the pension amount

5.62 56.5 37.88

41 I feel that, taking all the benefits and pay together, the pay package in Government Service is comparable to the private sector

1.88 26.16 71.96

42

The pride of association with the government does offset the lower pay (compared to the private sector) to some extent

6 59.11 34.89

43 By giving more cash to the employees, government can do away with the pension plan & let employees plan their pension

3.27 43.31 53.42

44 Looking at the monetary aspects alone, I feel that the pay is less in Government service compared to the private sector

0.86 91.64 7.5

45 Government should let employees plan their own pension so that they can exit at their will

4.57 52.79 42.64

46 If one puts the non-monetary along with monetary benefits of pay, it more than equals the pay in the private sector

7.89 22.22 69.89

47

A 10.00 AM to 5.00PM job is an important reason why I continue in the government service, rather than opting for a private sector job

3.87 43.77 52.36

48 Longer service in government sector makes one less attractive to private sector recruiters

14.21 58.04 27.75

49

The 20 years mandatory service forces employees to spend that many years in service with the sole objective of getting pension

3.26 79.48 17.27

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50 Private sector recruiters have an aversion to recruit from government sector 19.92 51.23 28.85

51 With my qualifications, finding and attractive job in private sector will not be difficult

8.11 64.01 27.88

52

A reduction in the minimum qualifying service for pension will go a long way in evolving a flexible exit policy for the government servants

6.31 76.75 16.95

53 With my experience, finding an attractive jon in private sector will not be difficult 8.84 62.13 29.03

54

The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e. EL, CL & SL, as compared to the private sector

3.33 45.11 51.56

55 Medical benefits and allowances in government sector is more attractive than in the private sector

3.86 33.45 62.69

56 I would prefer if the government gives me equivalent cash instead of giving me various benefits

6.66 66.58 26.76

57 I feel that all the benefits currently being given should be converted into cash and paid as part of pay

3.97 52.55 43.48

58 Employees should be allowed to choose the extent of cash component as against the non-monetary benefits

5.79 76.04 18.17

59 I feel that the government servants enjoy more paid leave than necessary 2.32 31.06 66.63

60

I think the cash component of the pay in the government sector is too low compared to the non-monetary benefits that the government employees get

5.56 68.09 26.36

61 The quantum of various types of leave can be curtailed by compensating with cash 1.69 69.58 28.73

62

I feel that Pay in the government should focus more on cash aspects and less on retirement, benefits because employees can plan and fund their own retirement benefits

3.01 46.47 50.52

63 I fell that the cash component in the pay packet should be must more than turn non-monetary benefits

5.42 77.37 17.22

64

Pay the government sector should have more focus on cash aspects than retirement benefits as employees can allocate their resources wisely

2.54 56.43 41.04

65 The leave travel allowance is one of the most attractive benefits we are entitled to 4.25 51.22 44.53

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66 Medical benefits in any organisation is inadequate to meet the needs of the employees

0.83 64.69 34.48

67 The medical benefits and allowances are certainly attractive in my organisation 2.16 39.19 58.65

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Annexe 2: Percentage Distribution of CPMF Data

No. Statement

SA

A

SA

SD

MD

SD

DK

Tota

l A

gree

Tota

l D

isag

ree

1 I like my present job very much 29.77 41.88 17.52 3.70 2.14 3.70 1.28 89.17 9.54

2 I am overall very satisfied with my job 11.68 35.33 24.36 12.54 7.69 5.13 3.28 71.37 25.36

3 I some times feel my job is meaningless 3.13 9.54 5.98 4.84 8.12 65.67 2.71 18.66 78.63

4 Many of our rules & procedures make doing a good job difficult 21.37 39.03 18.38 9.69 4.13 4.42 2.99 78.77 18.23

5 The job is pretty interesting to fully engage myself in. 14.96 35.75 14.81 11.82 8.69 8.83 5.13 65.53 29.34

6 The present job gives me enough opportunities to utilize my talents 7.98 26.21 15.10 16.24 10.83 20.23 3.42 49.29 47.29

7 As a CPMF employee I hardly get any benefits from the government’s HRA policy

28.21 35.61 11.97 7.41 7.69 6.70 2.42 75.78 21.79

8 I am not satisfied with the benefits I receive 22.65 33.48 16.24 9.40 5.98 10.54 1.71 72.36 25.93

9 I feel I am being paid a fair amount for the work I do 9.13 22.25 16.12 18.54 8.84 22.25 2.85 47.50 49.64

10 I feel un-appreciated by the organization when I think about what they pay me

14.39 30.63 21.23 10.97 7.41 9.40 5.98 66.24 27.78

11 I should be given the option to decide on the pay mix[1] at the beginning of every year.

18.09 34.90 11.40 6.55 3.85 13.25 11.97 64.39 23.65

12 The amount of pay I currently receive is comparable to what I think it should be.

4.84 13.53 12.11 20.09 15.24 30.20 3.99 30.48 65.53

13 The HRA I am entitled to is inadequate to meet my accommodation expenditure

33.19 28.35 6.98 7.55 5.84 14.10 3.99 68.52 27.49

14 The leave travel allowance is one of the most attractive benefits we are entitled to

8.83 28.21 16.10 13.68 15.24 15.81 2.14 53.13 44.73

15 There is a pressing need to review and rationalize the pay structure to improve employee efficacy

45.73 39.03 7.12 3.13 0.71 1.28 2.99 91.88 5.13

XLRI Jamshedpur

157


16 Almost everyone in the government sector uses his/her LTA facility 16.38 40.60 14.96 12.39 2.28 5.84 7.55 71.94 20.51

17 Being a Government Servant saves me from compromising on my values and ethics

18.66 41.17 16.38 6.27 3.99 6.27 7.26 76.21 16.52

18 By being a government employee I am serving the country 44.73 36.18 5.70 6.55 1.71 4.27 0.85 86.61 12.54

19 Government granted accommodation is a great benefit 31.05 37.04 12.82 5.13 3.56 9.54 0.85 80.91 18.23

20 Hardly anyone gets government quarters, though they are entitled 18.09 34.76 15.81 14.39 6.84 6.98 3.13 68.66 28.21

21 I am happy working with the government sector as it gives me a secure job.

26.07 45.01 17.24 5.56 2.14 2.85 1.14 88.32 10.54

22 I am satisfied that, as a government servant, I enjoy excellent leave benefits and holidays

10.68 21.37 16.67 18.23 7.98 23.65 1.42 48.72 49.86

23

I do not mind the relatively less salary in Government Service as the joy of serving the nation is a reward in itself

14.98 33.95 17.83 13.69 5.56 11.70 2.28 66.76 30.96

24 I enjoy the full benefits of the government granted accommodation 12.82 30.34 22.22 13.68 6.27 13.11 1.57 65.38 33.05

25

I feel that various departments/services in Government have too many allowances and benefits of sundry nature, which call for standardization

21.65 36.18 12.39 6.55 4.42 9.54 9.26 70.23 20.51

26

My job as a government servant provides me with adequate time and opportunity to pursue my other interests

6.55 13.68 11.97 12.96 13.82 38.89 2.14 32.19 65.67

27

The government adequately compensates me for the hardship I undergo due to my postings in difficult areas

7.56 20.26 11.41 9.99 11.98 36.52 2.28 39.23 58.49

28 The government compensates me adequately for the separation from the family

5.27 14.81 10.11 10.83 10.11 44.59 4.27 30.20 65.53

29 The joy of associating with the government is a significant non-monetary benefit to me

8.40 29.34 20.94 13.39 4.99 10.83 12.11 58.69 29.20

XLRI Jamshedpur

158


30

The pay structure presently prevailing in government (pay + allowances + non-monetary & retirement benefits) ensures efficiency

5.84 17.38 20.66 13.82 10.40 27.35 4.56 43.87 51.57

31


8.26 14.39 18.95 17.24 10.68 28.06 2.42 41.60 55.98

32

The pay structure presently prevailing in the Government (pay + allowances + non-monetary & retirement benefits) is not conducive to efficiency

14.39 42.31 13.53 10.54 5.41 9.26 4.56 70.23 25.21

33

The pay structure presently prevailing in the Government (pay + allowances + non-monetary & retirement benefits) is not conducive to employee satisfaction

20.37 36.89 13.25 11.82 4.13 8.55 4.99 70.51 24.50

34 The pride I derive by being a government servant is very important to me

16.95 44.87 18.38 6.84 3.85 3.99 5.13 80.20 14.67


10.26 28.63 19.37 12.96 9.97 14.96 3.85 58.26 37.89

36 The society looks down upon the government servants 9.26 25.50 14.96 12.25 9.69 24.07 4.27 49.72 46.01

37 Though I am entitled, I do not have government accommodation 12.39 22.93 16.38 10.83 11.82 19.80 5.84 51.71 42.45

38 I don't feel my efforts are rewarded the way they should be 16.24 36.61 17.81 10.68 5.84 7.69 5.13 70.66 24.22

39 My organization encourages employees to plan for their career growth

7.98 24.22 14.39 12.54 10.83 27.64 2.42 46.58 51.00

40

The Annual Performance Evaluation practiced in our organization help employees in their developmental plans

5.98 31.34 15.53 9.69 9.69 22.36 5.41 52.85 41.74

41 The opportunity for career growth is adequate in my organization 5.13 18.09 11.68 10.68 8.97 42.45 2.99 34.90 62.11

42 There are no rewards for those who work here 14.81 23.22 17.81 16.52 10.68 11.54 5.41 55.84 38.75

43 There is too little chance for promotion on my job 51.00 25.78 8.83 4.99 2.14 4.56 2.71 85.61 11.68

44 Those who do well on the job stand a fair chance of being promoted 9.12 17.09 11.68 12.54 11.40 33.76 4.42 37.89 57.69

XLRI Jamshedpur

159


45 When I do a good job, I receive the recognition for it that I should receive

11.68 32.34 17.24 11.11 7.69 15.38 4.56 61.25 34.19

46 A secure job is more important to me than a high paying job 22.08 35.19 12.96 11.40 4.84 13.11 0.43 70.23 29.34

47 Even if my job is not as high paying as a private sector job, it is the job security that makes me continue here

24.64 42.02 16.67 4.70 3.70 7.12 1.14 83.33 15.53

48

A reduction in the minimum qualifying service for pension will go a long way in evolving a more flexible exit policy for the government servants

26.78 41.74 9.54 6.13 5.84 5.27 4.70 78.06 17.24

49

By giving more cash to the employees government can do away with a pension plan and let employees plan their pension

20.66 24.79 9.83 8.83 7.41 23.65 4.84 55.27 39.89


20.94 33.76 10.11 6.41 6.84 18.09 3.85 64.81 31.34

51

I feel that, taking all the benefits and pay together, the pay package in Government Service is comparable to the private sector

12.82 17.24 9.69 16.67 15.38 25.36 2.85 39.74 57.41

52

If one puts the non-monetary along with monetary benefits of pay, it more than equals the pay in the private sector

4.99 17.09 11.54 12.68 11.82 32.62 9.26 33.62 57.12

53


20.83 31.95 10.13 7.56 7.99 16.98 4.56 62.91 32.52

54

Keeping in mind the intangible benefits such as status, position, power, that we as government servants enjoy, we are better off than comparable employees of private sector.

14.25 37.04 16.67 10.97 6.27 10.97 3.85 67.95 28.21

55 Longer service in government sector is seen as a liability by private sector recruiters

9.69 34.05 17.52 10.11 6.55 6.27 15.81 61.25 22.93

56

Looking at the monetary aspects alone, I feel that the pay is less in Government service compared to the private sector

42.23 39.66 7.85 3.57 2.14 2.43 2.14 89.73 8.13

57 It is not difficult for me to land a better paying job in the private sector if I so desire.

13.98 33.38 17.40 15.55 5.42 8.27 5.99 64.76 29.24

XLRI Jamshedpur

160


58 Private sector recruiters have an aversion to recruit from government sector

8.12 28.49 17.38 16.95 6.13 8.69 14.25 53.99 31.77

59


23.93 48.01 14.25 3.42 3.28 4.13 2.99 86.18 10.83

60


8.13 20.68 10.41 13.55 14.12 25.25 7.85 39.23 52.92

61 It is not difficult for me to find a more challenging job in the private sector.

12.68 33.62 18.38 13.25 6.27 9.54 6.27 64.67 29.06

62


13.96 27.78 21.51 11.54 4.84 8.83 11.54 63.25 25.21

63 With my qualifications, finding an attractive job in private sector will not be difficult.

11.54 30.06 24.36 14.81 5.84 6.55 6.84 65.95 27.21

64

The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e., EL, CL & SL, as compared to the private sector

8.55 26.64 22.79 14.96 6.41 14.39 6.27 57.98 35.75

65 With my experience, finding an attractive job in private sector will not be difficult.

12.96 38.03 21.94 9.40 5.13 6.84 5.70 72.93 21.37


26.39 33.24 17.40 7.70 4.42 8.84 2.00 77.03 20.97

67

Pay in the government sector should have more focus on cash aspects than retirement benefits as employees can allocate their resources wisely

18.09 35.90 15.81 10.26 5.98 10.40 3.56 69.80 26.64


29.20 41.45 10.26 6.55 3.28 3.28 5.98 80.91 13.11

69

I am separated from my family for most part of the year and there is no compensating factor for this separation

34.90 34.19 11.40 5.70 5.27 6.70 1.85 80.48 17.66


27.49 32.76 11.11 10.26 6.70 8.26 3.42 71.37 25.21

XLRI Jamshedpur

161


71

I feel that Pay in the government should focus more on cash aspects, and leave the retirement benefits planning to the individual employees

22.51 30.20 13.11 6.98 6.98 16.38 3.85 65.81 30.34

72

I feel that Pay in the government should focus more on cash aspects, and less on retirement benefits, because employees can plan and fund their own retirement benefits

18.52 26.35 14.10 12.11 6.70 17.38 4.84 58.97 36.18

73 I feel that the cash component in the pay packet should be much more than the non-monetary benefits

26.35 36.75 11.82 8.69 4.42 5.70 6.27 74.93 18.80

74 I feel that the government servants enjoy more paid leave than necessary 7.55 16.10 12.25 15.81 14.39 29.77 4.13 35.90 59.97

75


14.67 37.32 17.95 13.11 6.13 6.41 4.42 69.94 25.64

76 The quantum of various types of leave can be curtailed by compensating with cash

18.09 29.77 15.24 10.68 3.13 18.95 4.13 63.11 32.76

77 Medical benefits in my organization is inadequate to meet the needs of the employees

18.95 35.04 14.10 11.40 7.12 11.11 2.28 68.09 29.63


5.56 19.23 12.54 15.95 11.40 29.77 5.56 37.32 57.12

79 The medical benefits and allowances are certainly attractive in my organization

6.70 21.97 17.12 12.41 13.12 23.97 4.71 45.79 49.50

XLRI Jamshedpur

162


Annexe -3 Percentage Distribution of Defence Data

No.

Statement

SA

A

SA

SD

MD

SD

DK

Tota

l Agr

ee

Tota

l D

isag

ree


2 I would prefer that my son/daughter joins the armed forces 6.79 14.36 12.79 10.97 11.75 30.29 13.05 33.94 53.00


4 I am separated from my family for most part of the year due to the nature of my job

29.49 23.59 9.92 5.90 8.04 11.80 11.26 63.00 25.74

5 I feel my job is meaningless 3.95 5.79 10.26 12.11 7.89 58.95 1.05 20.00 78.95

6 My job is pretty interesting to full engage myself in. 9.23 26.91 24.80 17.68 6.86 12.40 2.11 60.95 36.94



9

An employee of the armed forces saves a considerable amount of money by availing of the canteen services

6.77 16.67 21.35 10.16 12.50 23.44 9.11 44.79 46.09

10 Armed forces are in receipt of a number of travel concessions that serve their needs

6.86 17.15 13.72 10.55 12.14 19.53 20.05 37.73 42.22

11 The rations that I receive as an armed force employee is a substantial benefit to me

2.65 9.52 19.05 11.38 11.90 16.67 28.84 31.22 39.95

12 The pay package compensates for my absence from my family for most part of work life

2.91 6.08 8.20 7.94 10.32 47.35 17.20 17.20 65.61


47.91 20.68 7.59 4.97 5.24 12.04 1.57 76.18 22.25

14 The hardship allowance I receive when posted in difficult areas serves its purpose

5.93 9.43 10.78 5.39 13.21 35.04 20.22 26.15 53.64

15 I feel I am being paid a fair amount of work I do 2.91 8.73 11.11 12.17 23.81 41.01 0.26 22.75 76.98


17 I am not satisfied with the benefits I 31.32 30.26 17.63 8.68 6.84 3.95 1.32 79.21 19.47

XLRI Jamshedpur

163


receive

18 I should be given the option to decide on the pay mix at the beginning of every year

18.73 33.77 14.78 9.23 3.96 7.39 12.14 67.28 20.58

19 Armed forces canteen services is a very significant benefit provided by the government

9.21 29.47 20.00 9.47 7.63 18.68 5.53 58.68 35.79

20 I feel un-appreciated by the organisation when I think about what they pay me

22.43 29.29 23.75 8.18 4.75 4.49 7.12 75.46 17.41


6.30 19.69 19.95 16.80 16.01 19.95 1.31 45.93 52.76

22 The amount of pay I currently receive is comparable to what I think it should be

1.32 3.44 9.26 17.46 21.96 44.97 1.59 14.02 84.39

23 There is a pressing need to review and rationalize the pay structure to improve employee efficiency

68.60 23.48 4.49 1.32 0.53 0.79 0.79 96.57 2.64

24 Armed forces are beneficiaries of anumber of allowances that civilian employees do not receive

15.67 19.06 12.27 9.92 9.14 23.50 10.44 47.00 42.56


26.51 40.68 13.12 7.09 4.99 7.35 0.26 80.31 19.42

26


7.55 16.41 20.05 16.93 14.32 24.74 0.00 44.01 55.99

27


4.70 13.84 19.06 12.79 13.84 34.99 0.78 37.60 61.62


29

The pay structure presently prevailing in government (pay+allowances+non-monetary & retirement benefits) ensures employee satisfaction

4.69 5.21 12.24 16.93 19.53 40.89 0.52 22.14 77.34




13.10 30.48 15.78 13.10 6.95 15.24 5.35 59.36 35.29

33 Almost everyone in the government sector avails his/her LTA facility 7.11 25.79 18.16 15.53 9.74 14.74 8.95 51.05 40.00

XLRI Jamshedpur

164


34 I feel that the government servants enjoy more paid leave than necessary 6.61 12.96 15.08 13.23 13.49 36.24 2.38 34.66 62.96


2.63 15.53 26.84 16.32 9.74 21.58 7.37 45.00 47.63


37 I am satisfied that, a government servant, I enjoy excellent leave benefits and holidays

10.32 26.98 20.90 10.32 7.67 23.28 0.53 58.20 41.27


2.39 11.94 18.83 16.98 13.26 35.28 1.33 33.16 65.52

39

I feel that various department/services in Government have too many allowance and benefits of sundry nature, which call for standardization

16.14 22.49 17.20 8.20 5.82 9.79 20.37 55.82 23.81

40


32.63 35.00 15.26 7.63 3.16 3.42 2.89 82.89 14.21

41

The pay structure presently prevailing in government (pay + allowances + non-monetary & retirement benefits) is not conductive to efficiently

29.52 34.84 17.29 7.45 3.72 4.26 2.93 81.65 15.43



15.83 31.93 29.82 7.12 7.65 6.33 1.32 77.57 21.11

44

The pay structure presently prevailing in government (pay + allowances +non-monetary & retirement benefits) ensures efficiency

2.90 8.71 16.09 22.43 15.57 32.19 2.11 27.70 70.18

45 Those who do well on the job stand a fair chance of being promoted in my organisation

8.85 19.01 13.28 10.16 11.72 36.46 0.52 41.15 58.33

46


4.21 17.37 17.11 13.95 8.16 28.68 10.53 38.68 50.79


4.74 21.84 19.21 17.37 13.16 22.89 0.79 45.79 53.42

XLRI Jamshedpur

165


48 My organisation encourages employees to plan for their career growth

3.45 9.81 20.42 16.98 11.14 36.07 2.12 33.69 64.19




52 Even if my job is not as high paying as a private sector job, it is the job security that make me continue here

14.36 36.55 25.07 8.88 6.01 7.83 1.31 75.98 22.72


54


23.62 22.83 10.76 6.30 5.77 21.00 9.71 57.22 33.07

55


4.42 3.64 5.19 10.13 13.77 58.70 4.16 13.25 82.60

56


7.41 14.55 14.29 15.08 14.55 30.95 3.17 36.24 60.58

57

By giving more cash to the employees, government can do away with the pension plan & let employees plan their pension

12.34 16.80 13.65 8.14 7.87 38.32 2.89 42.78 54.33

58


64.66 27.23 2.88 2.36 0.79 1.31 0.79 94.76 4.45


24.15 21.52 9.97 8.14 6.56 24.67 4.99 55.64 39.37

60


3.71 4.77 4.24 10.61 13.00 56.76 6.90 12.73 80.37

61


6.63 17.77 14.06 9.81 10.88 36.07 4.77 38.46 56.76

62 Longer service in government sector makes one less attractive to private sector recruiters

21.28 22.61 15.43 13.03 9.84 11.44 6.38 59.31 34.31

63 It is not difficult for me to find a more challenging job in the private 20.63 30.95 17.46 8.47 6.35 10.58 5.56 69.05 25.40

XLRI Jamshedpur

166


sector.

64


26.39 31.13 20.32 5.80 2.11 6.33 7.92 77.84 14.25


19.47 35.00 18.42 8.68 4.74 8.16 5.53 72.89 21.58


7.71 28.19 19.41 8.78 7.71 5.85 22.34 55.32 22.34

67 With my qualifications, finding and attractive job in private sector will not be difficult

22.11 33.68 21.05 8.68 4.21 3.95 6.32 76.84 16.84

68

The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e. EL, CL & SL, as compared to the private sector

4.46 12.07 15.75 13.91 17.85 33.07 2.89 32.28 64.83

69

A reduction in the minimum qualifying service for pension will go a long way in evolving a flexible exit policy for the government servants

22.61 36.44 18.35 4.26 2.66 4.52 11.17 77.39 11.44

70 With my experience, finding an attractive job in private sector will not be difficult

19.53 33.07 16.67 11.98 5.73 5.47 7.55 69.27 23.18

71

Keeping in mind the intangible benefits such as status, position, power, that we as government servants enjoy, we are better off than comparable employees of private sector.

1.83 12.79 18.28 15.14 16.45 33.16 2.35 32.90 64.75


27.39 17.29 6.65 7.18 4.52 14.89 22.07 51.33 26.60


30.79 21.05 11.05 7.89 6.05 15.00 8.16 62.89 28.95


21.81 32.98 17.82 6.38 5.32 5.59 10.11 72.61 17.29

75


17.15 35.88 16.09 10.82 5.80 5.28 8.97 69.13 21.90

76 The government should increase cash component instead of giving us the canteen benefit

28.84 19.58 6.88 7.67 11.11 16.14 9.79 55.29 34.92

XLRI Jamshedpur

167



25.13 26.98 15.61 8.73 4.50 16.93 2.12 67.72 30.16

78


14.47 23.42 15.53 10.00 12.11 21.58 2.89 53.42 43.68

79


18.42 21.05 16.58 10.79 11.05 20.00 2.11 56.05 41.84

80 I fell that the cash component in the pay packet should be must more than turn non-monetary benefits

31.66 34.04 17.15 3.96 2.37 3.69 7.12 82.85 10.03

81

Pay the government sector should have more focus on cash aspects than retirement benefits as employees can allocate their resources wisely

14.96 24.15 16.80 12.07 9.71 19.16 3.15 55.91 40.94


23.36 30.18 16.27 8.40 7.87 10.50 3.41 69.82 26.77

83 Medical benefits in any organisation is inadequate to meet the needs of the employees

21.41 18.54 15.14 15.93 14.62 13.84 0.52 55.09 44.39


6.81 17.28 14.66 16.49 13.09 27.49 4.19 38.74 57.07

85 The medical benefits and allowances are certainly attractive in my organisation

5.73 10.94 23.44 15.89 16.93 24.74 2.34 40.10 57.55

XLRI Jamshedpur

168


Annexe 4: Percentage Distribution of Railways

No. Statement

SA

A

SA

SD

MD

SD

DK

Agr

ee

Dis

agre

e







7 I am not satisfied with the benefits I receive 18.97 15.52 12.07 18.97 10.34 24.14 0.00 46.55 53.45

8 I feel I am being paid a fair amount for the work I do 15.79 26.32 28.07 7.02 12.28 10.53 0.00 70.18 29.82

9 I feel that employees use the railway passes facility at the most 50% pf their entitlement

8.77 45.61 15.79 12.28 7.02 5.26 5.26 70.18 24.56

10 I feel that railway passes given to us is a significant benefit 25.86 46.55 12.07 12.07 3.45 0.00 0.00 84.48 15.52

11 I feel that the railway passes that we get mostly go unused 7.02 15.79 22.81 15.79 5.26 33.33 0.00 45.61 54.39


8.93 21.43 16.07 26.79 12.50 10.71 3.57 46.43 50.00


3.64 20.00 9.09 18.18 16.36 23.64 9.09 32.73 58.18

14 I believe that railways employees have too many allowances 3.57 5.36 12.50 12.50 14.29 51.79 0.00 21.43 78.57

15 The allowances available to railway employees need rationalization 6.90 51.72 15.52 8.62 3.45 6.90 6.90 74.14 18.97


1.75 21.05 17.54 22.81 12.28 24.56 0.00 40.35 59.65


36.21 34.48 12.07 3.45 5.17 8.62 0.00 82.76 17.24


3.57 23.21 14.29 16.07 7.14 23.21 12.50 41.07 46.43

XLRI Jamshedpur

169



35.09 50.88 10.53 1.75 0.00 1.75 0.00 96.49 3.51

20 Almost everyone in the government sector uses his/her LTA facility 13.79 17.24 15.52 13.79 18.97 13.79 6.90 46.55 46.55


17.24 46.55 18.97 1.72 1.72 13.79 0.00 82.76 17.24





41.38 37.93 10.34 5.17 5.17 0.00 0.00 89.66 10.34


13.79 34.48 10.34 17.24 8.62 15.52 0.00 58.62 41.38

27


12.07 25.86 13.79 17.24 15.52 13.79 1.72 51.72 46.55

28 I feel that the government servants enjoy more paid leave than necessary

6.90 12.07 10.34 17.24 18.97 32.76 1.72 29.31 68.97

29


17.24 25.86 13.79 3.45 12.07 17.24 10.34 56.90 32.76

30


10.71 28.57 16.07 10.71 12.50 21.43 0.00 55.36 44.64

31


8.93 25.00 7.14 16.07 14.29 26.79 1.79 41.07 57.14


5.26 29.82 24.56 21.05 7.02 12.28 0.00 59.65 40.35

XLRI Jamshedpur

170


33


5.17 18.97 13.79 17.24 18.97 25.86 0.00 37.93 62.07

34


1.72 25.86 20.69 13.79 24.14 13.79 0.00 48.28 51.72

35


7.14 35.71 8.93 21.43 7.14 16.07 3.57 51.79 44.64

36


12.50 28.57 12.50 21.43 10.71 7.14 7.14 53.57 39.29


17.54 45.61 22.81 7.02 3.51 3.51 0.00 85.96 14.04


7.02 17.54 19.30 19.30 10.53 26.32 0.00 43.86 56.14





3.45 13.79 22.41 10.34 20.69 27.59 1.72 39.66 58.62

43


5.17 15.52 17.24 12.07 10.34 37.93 1.72 37.93 60.34




XLRI Jamshedpur

171


47 Those who do well on the job stand a fair chance of being promoted 3.51 10.53 10.53 28.07 7.02 40.35 0.00 24.56 75.44


5.17 32.76 15.52 15.52 12.07 18.97 0.00 53.45 46.55


50

Even if my job is not as high paying as a private sector job, it is the job security that makes me continue here

31.03 41.38 15.52 5.17 5.17 1.72 0.00 87.93 12.07

51


28.57 33.93 14.29 8.93 1.79 8.93 3.57 76.79 19.64

52


8.77 14.04 7.02 5.26 14.04 49.12 1.75 29.82 68.42


8.62 18.97 22.41 10.34 3.45 34.48 1.72 50.00 48.28

54


5.36 7.14 14.29 17.86 16.07 39.29 0.00 26.79 73.21

55


1.82 3.64 10.91 18.18 30.91 29.09 5.45 16.36 78.18

56


7.14 30.36 17.86 12.50 14.29 14.29 3.57 55.36 41.07

57

The intangible benefits such as status, position, power, that we as government servants enjoy, we are better off than comparable employees of private sector.

8.93 26.79 10.71 8.93 8.93 35.71 0.00 46.43 53.57


7.41 38.89 12.96 16.67 1.85 12.96 9.26 59.26 31.48

XLRI Jamshedpur

172


59 It is difficult for me to land a better paying job in the private sector if I so desire

7.27 27.27 18.18 12.73 5.45 20.00 9.09 52.73 38.18

60


33.93 46.43 8.93 1.79 1.79 7.14 0.00 89.29 10.71


8.77 17.54 19.30 17.54 8.77 10.53 17.54 45.61 36.84

62


13.79 44.83 18.97 15.52 1.72 5.17 0.00 77.59 22.41

63 It is difficult for me to land a better paying job in the private sector if I so desire

10.34 25.86 15.52 15.52 12.07 8.62 12.07 51.72 36.21

64 With my qualifications, finding an attractive job in private sector will not be difficult

8.77 26.32 15.79 19.30 14.04 5.26 10.53 50.88 38.60

65


7.14 39.29 26.79 3.57 5.36 14.29 3.57 73.21 23.21

66


3.51 19.30 15.79 12.28 24.56 24.56 0.00 38.60 61.40

67 With my experience, finding an attractive job in private sector will not be difficult

7.02 21.05 22.81 14.04 12.28 10.53 12.28 50.88 36.84

68

Employees should be allowed to choose the extent of cash component as against the non-monetary benefits

17.24 43.10 12.07 12.07 5.17 6.90 3.45 72.41 24.14


13.79 43.10 6.90 12.07 8.62 15.52 0.00 63.79 36.21

70


8.62 15.52 15.52 17.24 5.17 36.21 1.72 39.66 58.62

XLRI Jamshedpur

173


71


8.62 12.07 17.24 17.24 10.34 32.76 1.72 37.93 60.34

72

I feel that the cash component in the pay packet should be much more than the non-monetary benefits

22.41 44.83 5.17 10.34 5.17 6.90 5.17 72.41 22.41

73


7.27 38.18 18.18 14.55 7.27 7.27 7.27 63.64 29.09


17.86 32.14 17.86 7.14 8.93 16.07 0.00 67.86 32.14

75


8.62 24.14 17.24 12.07 12.07 24.14 1.72 50.00 48.28


15.79 36.84 14.04 7.02 7.02 19.30 0.00 66.67 33.33

77 Medical benefits in my organisation is inadequate to meet the needs of the employees

22.81 28.07 15.79 8.77 12.28 12.28 0.00 66.67 33.33


3.57 17.86 1.79 28.57 12.50 35.71 0.00 23.21 76.79


3.57 10.71 17.86 26.79 17.86 23.21 0.00 32.14 67.86

XLRI Jamshedpur

174


Annexe 5: Percentage Distribution of Postal Data

No Statement

SA

A

SA

SD

MD

SD

DK

Agr

ee

Dis

agre

e




4 Many of our rules & procedures make doing a good job difficult 15.54 36.27 21.24 6.22 12.4

4 7.77 0.52 73.06 26.42


6 The present job gives me enough opportunities to utilize my talents 8.76 30.41 13.40 10.31 17.5

3 19.07 0.52 52.58 46.91

7 I am not satisfied with the benefits I receive 21.13 35.57 13.40 8.76 6.70 13.9

2 0.52 70.10 29.38

8 I feel I am being paid a fair amount for the work I do 8.25 20.10 17.01 15.46 15.9

8 23.20 0.00 45.36 54.64


12.44 36.27 15.03 13.47 8.29 10.88 3.63 63.73 32.64


19.69 31.61 7.77 5.18 7.77 10.88

17.10 59.07 23.83


7.29 12.50 11.98 15.63 22.92

27.60 2.08 31.77 66.15


45.08 31.09 7.77 6.74 3.11 5.18 1.04 83.94 15.03


10.53 35.26 18.95 10.53 8.42 15.26 1.05 64.74 34.21


63.92 30.41 1.55 1.55 0.52 1.03 1.03 95.88 3.09

15 Almost everyone in the government sector uses his/her LTA facility 20.83 30.21 16.67 10.42 7.81 10.9

4 3.13 67.71 29.17


23.83 43.01 13.99 7.25 4.15 5.70 2.07 80.83 17.10


18 Government accommodation is a great benefit 22.51 43.46 16.23 6.81 4.19 5.24 1.57 82.20 16.23

19 Hardly anyone gets government quarters, though they are entitled 8.81 34.72 17.10 16.58 8.81 11.4

0 2.59 60.62 36.79

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175



33.51 38.14 15.46 4.12 2.58 6.19 0.00 87.11 12.89


18.65 44.04 15.03 8.29 5.70 7.77 0.52 77.72 21.76

22


17.53 22.16 21.13 9.79 13.40

14.95 1.03 60.82 38.14

23 I feel that the government servants enjoy more paid leave than necessary

4.15 9.84 10.36 16.58 15.03

43.01 1.04 24.35 74.61

24


11.86 26.29 11.34 10.82 6.19 23.20

10.31 49.48 40.21

25


8.25 26.29 21.65 11.86 13.92

17.53 0.52 56.19 43.30


9.42 33.51 18.32 6.81 16.75 8.90 6.28 61.26 32.46

27


4.66 23.83 12.44 21.24 16.58

17.62 3.63 40.93 55.44

28


3.11 10.36 21.76 22.28 14.51

24.87 3.11 35.23 61.66

29


13.40 32.99 11.86 12.37 17.01 7.73 4.64 58.25 37.11

30


15.46 30.93 15.46 10.82 14.43 8.25 4.64 61.86 33.51


19.07 41.75 26.29 4.64 1.55 5.15 1.55 87.11 11.34


9.38 19.27 17.19 14.58 14.06

23.96 1.56 45.83 52.60

XLRI Jamshedpur

176


33 The society looks down upon the government servants 9.33 13.99 11.92 9.33 17.6

2 34.72 3.11 35.23 61.66

34 Though I am entitled, I do not have government accommodation 8.33 40.10 11.98 6.77 10.4

2 18.75 3.65 60.42 35.94

35 I don't feel my efforts are rewarded the way they should be 14.95 30.93 13.40 10.31 13.9

2 12.89 3.61 59.28 37.11


2.59 25.39 7.77 10.36 13.47

38.86 1.55 35.75 62.69

37


5.70 36.27 9.84 10.88 11.40

20.73 5.18 51.81 43.01

38 The opportunity for career growth is adequate in my organization 4.19 17.80 16.23 11.52 21.9

9 27.23 1.05 38.22 60.73

39 There are no rewards for those who work here 23.44 21.88 15.10 15.63 7.29 14.0

6 2.60 60.42 36.98


41 Those who do well on the job stand a fair chance of being promoted 6.70 17.53 12.37 10.31 13.4

0 39.18 0.52 36.60 62.89


6.77 21.88 16.15 11.46 12.50

30.73 0.52 44.79 54.69


44

Even if my job is not as high paying as a private sector job, it is the job security that makes me continue here

31.09 44.04 16.58 3.11 1.04 4.15 0.00 91.71 8.29

45


19.47 44.21 11.05 9.47 1.05 8.95 5.79 74.74 19.47

46


14.43 21.13 9.79 6.70 7.22 37.11 3.61 45.36 51.03


10.31 20.10 10.31 5.67 8.25 37.63 7.73 40.72

XLRI Jamshedpur

177


48


5.70 11.40 7.77 13.47 16.06

45.08 0.52 24.87 74.61

49


4.19 12.04 9.95 18.32 22.51

23.04 9.95 26.18 63.87

50


18.56 21.65 10.31 9.28 7.73 27.84 4.64 50.52 44.85

51

The intangible benefits such as status, position, power, that we as government servants enjoy, we are better off than comparable employees of private sector.

10.82 38.66 20.62 9.28 8.76 7.73 4.12 70.10 25.77


6.74 31.61 13.99 3.63 6.74 11.92

25.39 52.33 22.28

53 It is not difficult for me to land a better paying job in the private sector if I so desire.

10.31 22.68 23.71 12.37 12.37 8.25 10.3

1 56.70 32.99

54


50.52 37.63 4.64 3.09 1.55 2.06 0.52 92.78 6.70


7.61 25.54 16.85 11.41 3.80 9.24 25.54 50.00 24.46

56


15.79 40.53 20.00 7.89 7.89 5.79 2.11 76.32 21.58

57


8.95 32.63 14.74 9.47 14.21

18.95 1.05 56.32 42.63


9.38 32.81 17.19 11.46 8.33 13.54 7.29 59.38 33.33

59 With my qualifications, finding an attractive job in private sector will not be difficult.

8.76 28.87 24.74 15.46 6.70 6.70 8.76 62.37 28.87

60


6.74 31.61 25.39 11.92 9.33 9.33 5.70 63.73 30.57

XLRI Jamshedpur

178


61


7.29 21.35 22.92 14.06 11.98

18.23 4.17 51.56 44.27

62 With my experience, finding an attractive job in private sector will not be difficult.

8.29 26.94 20.21 20.73 6.22 7.77 9.84 55.44 34.72


31.61 34.20 12.44 9.33 3.11 5.70 3.63 78.24 18.13


28.35 27.32 12.37 10.31 7.22 12.37 2.06 68.04 29.90

65


7.77 17.10 11.40 11.40 9.84 39.90 2.59 36.27 61.14

66


8.25 19.07 8.25 13.40 9.28 39.18 2.58 35.57 61.86

67 I feel that the cash component in the pay packet should be much more than the non-monetary benefits

27.46 42.49 9.33 9.84 5.18 2.59 3.11 79.27 17.62

68


19.90 38.22 11.52 9.95 9.95 8.90 1.57 69.63 28.80


27.84 24.23 18.04 9.79 6.19 11.34 2.58 70.10 27.32

70


9.95 26.70 15.18 13.09 5.24 23.56 6.28 51.83 41.88


27.46 42.49 10.88 6.22 3.63 8.81 0.52 80.83 18.65

72 Medical benefits in my organization is inadequate to meet the needs of the employees

34.72 25.39 8.81 8.29 9.33 12.95 0.52 68.91 30.57


5.67 20.10 8.76 12.37 8.76 38.66 5.67 34.54 59.79


9.95 8.38 20.42 14.14 11.52

34.03 1.57 38.74 59.69

XLRI Jamshedpur

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xlri compensation

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