PSU staff may get 10% extra for rural stint

Officials of state-owned  companies could get a special allowance if they agree to serve  in far-flung areas, helping companies expand operations and  banks to reach their services to under-banked areas. The special allowance will  amount to 10% of the basic pay, according to a proposal worked  out by the department of public enterprises, or DPE. The  incentive scheme has been proposed after some ministries had  written to the DPE, the nodal agency for public sector  companies, pointing out that employees don’t feel incentivised

when they are sent on deputation to distant areas. The state-owned companies had  complained that such posting had also led to attrition in the  workforce. “As a state-owned company, our task is to locate
resources and set up plants and offices in the region to tap  that wealth. However, there is not much employee participation  as the incentives are poor,” said a senior official with Bharat  Heavy Electricals. Under the new guidelines issued  by DPE, a government employee will be eligible to get a maximum  of 10% of the basic pay as special allowance depending on the

“The amount is calculated on the  basis of the remoteness of the area and the least that an  employee can get is 4% of the basic pay,” said a DPE official.  Companies will have to finance the special allowance from their
own resources and no budgetary support will be provided. The incentive scheme will allow  the government to also push through a mandatory stint for new  employees in rural areas. “If the new workforce has a rural  stint in the initial years, they would be better equipped in  their future roles,” the official said.

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

“Companies were earlier bound by  a list compiled by us, but with their expanding operations it  was prudent to let them decide on their own,” the DPE official said. PSUs, however, will have to take this decision in consultation with their administrative ministry and financial advisors on their board. As of now, there are 265 central  public sector enterprises, with a workforce of over 15 lakh employees.