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Compensation

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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

XLRI Jamshedpur

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 2 3 4 AN OVERVIEW OF THE STUDY..................................................................................................10 DELIVERABLES ..............................................................................................................................12 METHODOLOGY ............................................................................................................................13 COST TO COMPANY –A PRIMER ...............................................................................................16 4.1 4.2 4.3 4.4 4.4.1 4.4.2 4.5 5 PAY AND ITS COMPONENTS ........................................................................................................ 16 COST TO COMPANY- A WORKING DEFINITION ............................................................................. 18 PAY LEVELS, PAY DIFFERENTIALS IN THE GOVERNMENT ............................................................ 20 CONSTITUENTS OF CTC-A COMPARISON BETWEEN GOVERNMENT AND PRIVATE SECTOR .......... 23 CTC to CTG.......................................................................................................................... 28 Pitfalls of the CTC concept................................................................................................... 30 TOTAL REWARDS AS A GOVERNMENT EMPLOYEE ....................................................................... 31

CTG-GENERAL CATEGORY........................................................................................................32 5.1 GROSS PAY OF A GOVERNMENT EMPLOYEE ................................................................................ 32

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COSTING BENEFITS-GENERAL CATEGORY .........................................................................37 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 COST OF PENSION ....................................................................................................................... 38 COST OF GRATUITY .................................................................................................................... 42 COST OF ENCASHMENT OF 300 DAYS LEAVE .............................................................................. 42 LEAVE TRAVEL CONCESSION ..................................................................................................... 43 HOUSE BUILDING ADVANCE ....................................................................................................... 44 VEHICLE AND COMPUTER ADVANCE........................................................................................... 46 MEDICAL BENEFITS .................................................................................................................... 47 MEDICAL BENEFITS POST RETIREMENT....................................................................................... 47 CTG OF GROUP INSURANCE BENEFIT ......................................................................................... 47 BENEFITS NOT ADDED TO THE CTG ........................................................................................... 50 Cost of leave the employee is eligible .............................................................................. 50 Canteen subsidy ............................................................................................................... 50 Computer at home for certain levels (not in the CTG) .................................................... 50 Car for S29 and above (not in CTG)................................................................................ 51 Ex-gratia (not in CTG)..................................................................................................... 51

6.10.1 6.10.2 6.10.3 6.10.4 6.10.5 6.11 6.12

TABLE OF BENEFITS FOR ALL LEVELS (GENERAL EMPLOYEES)................................................... 52 COST TO GOVERNMENT TABLE BY PAY LEVELS FOR GENERAL CATEGORY GOVERNMENT 54

EMPLOYEES ..............................................................................................................................................

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6.12.1 7 CTG general category (special functions/geographies) .................................................. 58

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

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COST OF THE BENEFITS OF RLY. EMPLOYEES ...................................................................61 8.1 8.2 8.3 8.4 8.5 RAILWAY PASSES ....................................................................................................................... 63 COST OF PASSES POST RETIREMENT ............................................................................................ 64 RUNNING STAFF (RAILWAYS) ..................................................................................................... 66 BUNGALOW PEON (NOT IN CTG) ............................................................................................... 67 CTG OF REPRESENTATIVE LEVELS IN THE RAILWAYS ................................................................. 68

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CTG - ARMED FORCES .................................................................................................................70 9.1 9.2 9.2.1 CONSTITUENTS OF GROSS PAY FOR ARMED FORCES.................................................................... 70 PAY SCALES IN THE ARMED FORCES ........................................................................................... 71 List of allowances for armed forces...................................................................................... 73

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COST OF BENEFITS FOR ARMED FORCES.............................................................................76 10.1 PENSION FOR ARMED FORCES ..................................................................................................... 77 Calculation of Pension for Sepoy..................................................................................... 78

10.1.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12

RATION ...................................................................................................................................... 79 CANTEEN ................................................................................................................................... 79 ELECTRICITY AND WATER .......................................................................................................... 80 CHILDREN CONVEYANCE............................................................................................................ 80 LTC ........................................................................................................................................... 80 REIMBURSEMENT FOR HIRING OF FURNITURE ............................................................................ 82 LEAVE ........................................................................................................................................ 82 HOUSING LOAN .......................................................................................................................... 83 SAHAYAKS (NOT IN CTG).......................................................................................................... 83 GROUP INSURANCE BENEFIT (NOT IN CTG)................................................................................ 83 THE CTG OF ARMED FORCES ..................................................................................................... 84 Table of benefits for armed forces ................................................................................... 84 Table of benefits for PBOR (army) .................................................................................. 86

10.12.1 10.12.2 11

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

12

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

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13 14 15 EMPLOYMENT SECURITY & COST OF NO-EASY-EXIT......................................................97 EMPLOYEES’ PERCEPTIONS OF PAY ....................................................................................100 GOVERNMENT VS. PRIVATE SECTOR & PSUS....................................................................128 15.1 15.2 16 PAY MIX OF A REPRESENTATIVE PRIVATE SECTOR ORGANIZATIONS ......................................... 129 COMPARISON WITH THE PUBLIC SECTOR .................................................................................. 131

RECOMMENDATIONS ON PAY COMPONENTS ...................................................................134 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 ANALYSIS OF THE STRENGTH OF VARIOUS CTC COMPONENTS ................................................. 135 EXISTENCE OF STANDARD ALLOWANCES ................................................................................. 140 PENSION ................................................................................................................................... 141 ARMY CANTEENS ..................................................................................................................... 141 RAILWAY PASSES ..................................................................................................................... 142 GRATUITY ................................................................................................................................ 142 INTEREST SUBSIDIES ................................................................................................................. 142 MEDICAL FACILITIES ................................................................................................................ 143

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LIMITATIONS OF THE STUDY..................................................................................................144 ANNEXURE.....................................................................................................................................145 18.1 18.2 18.3 18.4 PREMIUM RATES OF MEDICLAIM POLICIES .............................................................................. 145 AGE GROUP WISE EXPECTATION OF LIFE IN INDIA .................................................................... 146 HOUSEHOLD CONSUMPTION/CONSUMER EXPENDITURE ............................................................ 149 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 6 Estimating cost to government

XLRI Jamshedpur 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 8 Estimating cost to government

XLRI Jamshedpur 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: • • • • • • • 9 Estimating cost to government

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

XLRI Jamshedpur

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 10 Estimating cost to government

XLRI Jamshedpur 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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XLRI Jamshedpur 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 13 Estimating cost to government

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

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

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

Calculating cost of compensation starting from calculating gross pay for every government employee (with specific reference to railways, the armed forces and the CPMF) Take responses from all the four categories (general, railways, armed forces and CPMF) to get information on efficacy of the benefits Add the cost of benefits to the gross pay to arrive at cost to government Compare pay with private sector and public sector organizations

Recommend on the Feasibility of designing an alternative package

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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 16 Estimating cost to government

XLRI Jamshedpur 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 17 Estimating cost to government

XLRI Jamshedpur 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 18 Estimating cost to government

XLRI Jamshedpur 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. 19 Estimating cost to government Then the third

XLRI Jamshedpur 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 midpoint 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 20 Estimating cost to government

XLRI Jamshedpur 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. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. Post/ Grade S–1 S–2 S–2A S–3 S–4 S–5 S–6 S–7 S–8 S–9 S – 10 S – 11 S – 12 S – 13 S – 14 S – 15 S – 16 S – 17 S – 18 S – 19 S – 20 S – 21 S – 22 S – 23 S – 24 S – 25 S – 26 S – 27 S – 28 S – 29 S – 30 S – 31 S – 32 S – 33 S – 34 Revised Scales (From 1-1-1996) 2,550-55-2,660-60-3,200 2,610-60-3,150-65-3,540 2,610-60-2,910-65-3,300-70-4,000 2,650-65-3,300-70-4,000 2,750-70-3,800-75-4,400 3,050-75-3,950-80-4,590 3,200-85-4,900 4,000-1,000-6,000 4,500-125-7,000 5,000-150-8,000 5,500-175-9,000 6,500-200-6,900 6,500-200-10,500 7,450-225-11,500 7,500-250-12,000 8,000-275-13,500 9,000 FIXED 9,000-275-9,550 10,325-325-10,975 10,000-325-15,200 10,650-325-15,850 12,000-375-16,500 12,750-375-16,500 12,000-375-18,000 14,300-400-18,300 15,100-400-18,300 16,400-450-20,000 16,400-450-20,900 14,300-450-22,400 18,400-500-22,400 22,400-525-24,500 22,400-600-26,000 24,050-650-26,000 26,000 FIXED 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 Basic pay

Annual increment pay scale

How the “Private sector” determines the value 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. & Pay increases annually in the The increments in government are The private sector uses performance as prescribed pay scale. time based. 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. Cost of living adjustment Using a base year, and the consumer Private sector does not have this

What it pays for

Mode of determining monetary value in the government It is that pay associated with the The pay commission arrives at pay position. scales for all the levels.

Dearness allowance 23

Estimating cost to government

XLRI Jamshedpur

(inflation) price index, increases to the price This component is given in index are compensated in equal addition to the base pay and measure. Reflected in pay as a varies as per an approved percentage of basic pay. formula. At the time of calculating the cost to government (1-1-2007) DA is 35% of Basic plus Dearness Pay. Dearness pay That part of dearness allowance A component that is in place only which is merged to the basic since 1-4-2004. A considerable pay. benefit to the employees since most Generally when dearness allowances (and retrial benefits) is allowance reaches 50% of basic usually calculated as a percentage of pay it is merged with Basic and the basic pay. treated as basic pay for all Technically a merging of dearness calculations 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 A component of pay that is paid House rent allowance is calculated as (HRA) to take care of housing needs; a percentage of base pay depending Those government employees on the classification of the city who get government accommodation are not eligible for HRA.

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

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 A single rate of DA is calculated allowance (CCA) for the whole nation; CCA takes care of inter-city differences in cost of living (expensiveness). Transportation allowance Money paid towards conveyance expenditure incurred in traveling to office and back Hardship allowance paid for posting in “difficult to live areas” (viz. Northeast and Andaman and Nicobar Islands). Usually a geography specific allowance

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

Special allowances • Special Allowances related to functions Risk related • allowances • Allowances related to geography

Reimbursement tuition fees Children)

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

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. A standard amount based on class of Conveyance allowance in Private city. sectors usually is a percentage of pay, and/or reimbursable with respect to fuel expense and maintenance of vehicles. 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. 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 In a block of four years either two money spent on travel with journeys to home or one journey to family. The reimbursement is home and other anywhere in India. pay scale dependent which increases as pay scale increases but only actuals are reimbursed The employees have to repay the loan in simple interest and hence is a cost to the government 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.

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

Advances

Government gives loans to employees to build houses and buy vehicles, computers 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. Gratuity The government awards employees for associating themselves for a long time with the government; Gratuity is a statutory benefit Leave encashment Government employees can encash their unutilized leave subject to a maximum of 300 days Group insurance Employees contribute to a fund Benefit that gives benefit of savings and return. 26 Estimating cost to government

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. Private sector usually does not have this component

30% of their contribution goes to an Organizations contribute to group insurance fund. insurance on behalf of their employees.

XLRI Jamshedpur

Provident fund

Bonus and incentives

Canteen subsidy/reimbursement

Contribution by the employee to Government employees have the GPF a fund where contribution and (general provident fund scheme) withdrawal are regulated where the employees have to contribute a minimum of 6% of their BP+DP+DA Variable pay contingent on Almost all government employees performance of either the receive some kind of non-productivity individual, team or/and the linked bonus. Running staff in organization railways have their pay tied to their performance Reimbursement of lunch and Many Government employees are in snack expenditure receipt of subsidized food at their offices though the exact nature of subsidy is not clear.

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.

Washing allowance

Allowance for employees who adorn special uniforms in the work place Usually given in the form of reimbursement (upto 15000 Rs per annum) and as a insurance for employees and their family

Medical benefit

Training Development

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

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. 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. For those employees that have to Similar to the way government gives wear uniform in the work place washing allowance government gives a washing allowance Government authorized Organizations pay a medical insurance doctors/government hospitals treat premium that covers the employees and employees without taking any fee. their family (ranging from a cover of Government employees in the general 2,00,000 Rs to 7,00,000) apart from category pay a fee every month to reimbursing medical bills/prescriptions subscribe to the CG health Scheme. up to Rs. 15,000 per annum Government also sponsors employees Some organizations who sponsor for training and obtaining higher education programs that lead to a qualifications. Employees can also certificate/diploma/degree do add it to avail leave with full pay. But the 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 Standard package

B Benefits C Variable pay Telephones NonBasic pay Newspapers productivity Dearness pay Children education assistance linked bonus or Dearness allowance Leave travel concession/Home travel concession productivity HRA Pension linked bonus CCA gratuity wherever Transport allowance leave encashment applicable home loan subsidy, vehicle loan subsidy, computer loan subsidy Group insurance Medical Facilities Computer at home at certain levels Package A+B+C as above + any of the following or some of the following for special Washing allowance functions Over time allowance Non practicing allowance (doctors) Nursing Allowance (nurses) Conveyance Allowance (higher rate for doctors) Cash Handling Allowance Split Duty Allowance Package A+B+C as in the first row + any/some of the following: for special hill compensatory allowance geography Island Special allowance Special Duty Allowance Special Compensatory Allowance (Remote Area, Border Area, Hard Area, Tribal Area Allowance Bad Climate Allowance)

A Gross pay

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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 A class city city

B1 class B class C city city class city
5,878 6,048 6,138 6,363 7,038 7,455 9,255 10,380 11,505 12,630 15,005 15,005 17,143 17,255 18,580 20,830 5,848 6,013 6,103 6,328 7,003 7,395 9,195 10,320 11,445 12,570 14,945 14,945 17,083 17,195 18,520 20,770 5,526 5,654 5,739 5,953 6,594 6,915 8,625 9,694 10,763 11,831 14,094 14,094 16,124 16,231 17,500 19,638

Unclassified City

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16

6,536 6,760 6,859 7,106 7,849 8,320 10,300 11,538 12,775 14,013 16,788 16,788 19,139 19,263 20,900 23,375

5,933 6,123 6,213 6,438 7,113 7,540 9,340 10,465 11,590 12,715 15,265 15,265 17,403 17,515 19,040 21,290

5,430 5,556 5,640 5,850 6,480 6,795 8,475 9,525 10,575 11,625 13,850 13,850 15,845 15,950 17,200 19,300

32 Estimating cost to government

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S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33 S34
23,375 26,654 25,850 27,459 30,800 32,656 30,800 36,493 38,473 41,690 41,690 36,493 46,640 56,540 56,540 60,624 65,450 75,350 21,290 24,271 23,540 25,003 28,040 29,728 28,040 33,215 35,015 37,940 37,940 33,215 42,440 51,440 51,440 55,153 59,540 68,540 20,830 23,811 23,080 24,543 27,580 29,268 27,580 32,755 34,555 37,480 37,480 32,755 41,980 50,980 50,980 54,693 59,080 68,080 20,770 23,751 23,020 24,483 27,520 29,208 27,520 32,695 34,495 37,420 37,420 32,695 41,920 50,920 50,920 54,633 59,020 68,020 19,638 22,470 21,775 23,164 26,050 27,653 26,050 30,966 32,676 35,455 35,455 30,966 39,730 48,280 48,280 51,807 55,975 64,525 19,300 22,083 21,400 22,765 25,600 27,175 25,600 30,430 32,110 34,840 34,840 30,430 39,040 47,440 47,440 50,905 55,000 63,400

33 Estimating cost to government

XLRI Jamshedpur 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:-

34 Estimating cost to government

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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 6,304 6,443 6,536 6,769 7,616 7,965 9,975 11,138 12,300 13,463 16,063 16,063 18,271 18,388 19,750 22,075 22,075 25,156 24,400 25,911 29,050 30,794 29,050 34,398 36,258 39,280 39,280 34,398 43,930 53,230 53,230 57,066 61,600 Gross pay in NE in PartB 6,404 6,543 6,636 6,869 7,716 8,065 10,175 11,338 12,500 13,663 16,363 16,363 18,571 18,688 20,050 22,375 22,375 25,456 24,700 26,211 29,350 31,094 29,350 34,698 36,558 39,580 39,580 34,698 44,230 53,530 53,530 57,366 61,900 Gross pay in Port Blair 6,756 6,902 6,999 7,243 8,159 8,525 10,805 12,024 13,243 14,461 17,274 17,274 19,589 19,711 21,130 23,568 23,568 26,797 26,005 27,589 30,880 32,708 30,880 36,486 38,436 41,605 41,605 36,486 46,480 56,230 56,230 60,252 65,005 Gross pay in CAR Nicobar 6,982 7,133 7,233 7,484 8,438 8,815 11,125 12,381 13,638 14,894 17,831 17,831 20,218 20,344 21,800 24,313 24,313 27,642 26,825 28,458 31,850 33,734 31,850 37,629 39,639 42,905 42,905 37,629 47,930 57,980 57,980 62,126 67,025

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33

35 Estimating cost to government

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

36 Estimating cost to government

XLRI Jamshedpur

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.

37 Estimating cost to government

XLRI Jamshedpur 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 38 Estimating cost to government

XLRI Jamshedpur 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 goalseek 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.

39 Estimating cost to government

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Table 6-1: Pension contribution calculation-an illustration Per month contribution Year Basic DA 29.39% Pay % of Basic per year

contribution 1 2 3 4 5 6 7 8 9 10 Pay commission 1 11 12 First promotion 13 14 15 16 17 18 19 20 Pay commission 2 21 22 23 24 Second promotion 25 26 27 28 29 30 Pay commission 31 2,550.00 2,601.00 2,652.00 2,703.00 2,754.00 2,805.00 2,856.00 2,907.00 2,958.00 3,009.00 5,240.07 5,344.87 5,663.46 5,776.73 5,890.00 6,003.27 6,116.54 6,229.81 6,343.08 6,456.35 11,241.39 11,466.21 11,691.04 11,915.87 12,617.33 12,855.65 13,093.97 13,332.28 13,570.60 13,808.92 24,045.39 0 156.06 318.3624 486.9072 661.6944 842.724 1029.996 1223.51 1423.267 1629.266 0 320.69 654.21 1,039.81 1,414.14 1,802.34 2,204.40 2,620.33 3,050.12 3,493.77 0 687.97 1,403.46 2,146.48 2,917.00 3,860.90 4,720.59 5,609.46 6,527.49 7,474.69 0.00 2,550.00 2,757.06 2,970.36 3,189.91 3,415.69 3,647.72 3,886.00 4,130.51 4,381.27 4,638.27 5,240.07 5,665.56 6,317.68 6,816.54 7,304.15 7,805.61 8,320.94 8,850.14 9,393.19 9,950.12 11,241.39 12,154.19 13,094.51 14,062.35 15,534.34 16,716.55 17,814.56 18,941.74 20,098.09 21,283.61 24,045.39 749.34 764.33 779.32 794.30 809.29 824.28 839.27 854.25 869.24 884.23 1,539.85 1,570.65 1,664.27 1,697.55 1,730.84 1,764.12 1,797.41 1,830.69 1,863.98 1,897.27 3,303.40 3,369.47 3,435.54 3,501.60 3,707.74 3,777.77 3,847.80 3,917.83 3,987.86 4,057.90 7,065.99 8,992.13 9,171.97 9,351.82 9,531.66 9,711.50 9,891.34 10,071.19 10,251.03 10,430.87 10,610.71 18,478.18 18,847.74 19,971.22 20,370.64 20,770.07 21,169.49 21,568.92 21,968.34 22,367.76 22,767.19 39,640.79 40,433.61 41,226.42 42,019.24 44,492.82 45,333.21 46,173.59 47,013.98 47,854.36 48,694.75 84,791.88

40 Estimating cost to government

XLRI Jamshedpur
3 32 33 Amount at time of retirement 24,526.30 25,007.21 1,471.58 3,002.02 25,997.88 28,009.23 7,207.31 7,348.63 86,487.72 88,183.56 2,709,356.45

2,709,356.45

41 Estimating cost to government

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

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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XLRI Jamshedpur

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 S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33 S34

House building advance
130,050 133,110 135,150 140,250 155,550 163,200 204,000 229,500 255,000 280,500 331,500 331,500 379,950 382,500 408,000 459,000 459,000 526,575 510,000 543,150 612,000 650,250 612,000 729,300 750,000 750,000 750,000 729,300 750,000 750,000 750,000 750,000 750,000 750,000

Benefit
411 421 427 444 492 516 645 726 806 887 1,048 1,048 1,202 1,210 1,162 1,307 1,307 1,500 1,453 1,547 1,743 1,852 1,743 2,077 2,136 2,136 2,136 2,077 2,136 2,136 2,136 2,136 2,136 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 47 Estimating cost to government

XLRI Jamshedpur 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 15 30 60 120

Insurance component Sum assured 4.5 9 18 36 15000 30000 60000 120000

Market premium rate CTG 32 60 129 249 27.5 51 111 213

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Table 6-4: Group insurance benefit per month

Grade S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33 S34

Pay scale at the minimum of scale 2,550.00 2,610.00 2,650.00 2,750.00 3,050.00 3,200.00 4,000.00 4,500.00 5,000.00 5,500.00 6,500.00 6,500.00 7,450.00 7,500.00 8,000.00 9,000.00 9,000.00 10,325.00 10,000.00 10,650.00 12,000.00 12,750.00 12,000.00 14,300.00 15,100.00 16,400.00 16,400.00 14,300.00 18,400.00 22,400.00 22,400.00 24,050.00 26,000.00 30,000.00

Group insurance Benefit 27.50 27.50 27.50 51.00 51.00 51.00 51.00 51.00 51.00 111.00 111.00 111.00 111.00 111.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00 213.00

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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 exgratia 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 / LTA Grade

HTA Tele phones

News Pension Gratuity papers

Leave cost of encashtt medical net Deductions 167 171 174 180 200 210 262 295 328 361 426 426 488 492 524 698 944 944 944 944 914 914 914 914 884 884 884 884 884 834

motor computer interest Group Medical insurance vehicle advance subsidy/ Insurance subsidy subsidy month post on retirement HBA 538 538 538 538 538 538 538 538 538 538 538 538 538 538 538 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80
411 421 427 444 492 516 645 726 806 887 1,048 1,048 1,202 1,210

Sum of all benefits
2,984 3,328 3,354 3,440 3,632 3,727 4,215 4,609 5,032 5,356 5,883 5,963 6,433 6,459 6,794

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15

42 56 56 56 56 56 163 163 163 163 163 228 228 228 228

21 28 28 28 28 28 82 82 82 82 82 114 114 114 114 80 80 80 80

765 783 795 825 915 960 1,200 1,350 1,500 1,650 1,950 1,950 2,235 2,250 2,400

274 280 285 295 328 344 411 411 411 411 411 411 411 411 411

28 28 28 51 51 51 51 51 51 111 111 111 111

111 1,162 213

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Post / LTA Grade

HTA Tele phones

News Pension Gratuity papers

Leave cost of encashtt medical net Deductions 590 590 677 656 698 787 836 787 937 990 1,075 1,075 937 1,206 1,468 1,468 1,577 1,704 1,967 884 884 834 834 834 834 834 834 834 834 834 834 834 834 588 588 517 517 517

S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33 S34

228 228 228 228 228 228 228 228 228 390 390 390 390 1,333 1,000 1,000 1,000 667 667

114 114 114 114 114 114 114 114 114 195 195 195 195 667 500 500 500 334 334 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,800 1,800 1,800 1,800 2,800 2,800

80 80 80 80 80 80 80 80 80 80 80 80 80 160 240 240 240 240 240

2,700 2,700 3,098 3,000 3,195 3,600 3,825 3,600 4,290 4,530 4,920 4,920 4,290 5,520 6,720 6,720 7,215 7,800 9,000

411 411 411 411 411 411 411 411 411 411 411 411 411 411 411 411 411 411 411

motor computer interest Group Medical insurance vehicle advance subsidy/ Insurance subsidy subsidy month post on retirement HBA 80 1,307 538 80 213 538 538 538 538 538 538 538 538 538 538 538 538 538 538 538 538 538 538
80 80 80 762 762 762 762 762 762 762 762 762 762 762 762 762 762 762

Sum of all benefits
7,305 7,305 7,932 7,816 8,825 11,015 11,398 11,015 12,190 12,541 13,259 13,259 12,190 15,745 16,542 16,502 17,034 18,247 19,709

80 126 126 126 126 126 126 126 126 126 126 126 126 126 126 126 126 126

1,307 1,500 1,453 1,547 1,743 1,852 1,743 2,077 2,136 2,136 2,136 2,077 2,136 2,136 2,136 2,136 2,136 2,136

213 213 213 213 213 213 213 213 213 213 213 213 213 213 213 213 213 213

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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 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27 S28 9,722 10,215 10,340 10,673 11,682 12,148 14,717 16,348 18,009 19,570 22,872 22,750 25,572 25,722 27,694 30,680 30,680 34,586 33,666 36,284 41,815 44,054 41,815 48,682 51,014 54,949 54,949 48,682 9,118 9,597 9,713 10,025 10,946 11,378 13,757 15,276 16,824 18,272 21,349 21,228 23,836 23,974 25,834 28,595 28,595 32,203 31,356 33,828 39,055 41,126 39,055 45,405 47,556 51,199 51,199 45,405 9,063 9,542 9,658 9,970 10,871 11,303 13,672 15,191 16,739 18,187 21,089 20,968 23,576 23,714 25,374 28,135 28,135 31,743 30,896 33,368 38,595 40,666 38,595 44,945 47,096 50,739 50,739 44,945 9,033 9,512 9,628 9,940 10,836 11,268 13,612 15,131 16,679 18,127 21,029 20,908 23,516 23,654 25,314 28,075 28,075 31,683 30,836 33,308 38,535 40,606 38,535 44,885 47,036 50,679 50,679 44,885 8,711 9,184 9,295 9,595 10,427 10,843 13,042 14,504 15,996 17,389 20,178 20,056 22,557 22,691 24,294 26,942 26,942 30,401 29,591 31,990 37,065 39,051 37,065 43,156 45,217 48,714 48,714 43,156 8,615 9,086 9,196 9,492 10,313 10,723 12,892 14,336 15,809 17,182 19,934 19,813 22,278 22,409 23,994 26,605 26,605 30,014 29,216 31,590 36,615 38,573 36,615 42,620 44,651 48,099 48,099 42,620

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S29 S30 S31 S32 S33 S34 62,385 73,082 73,042 77,658 83,697 95,059 58,185 67,982 67,942 72,186 77,787 88,249 57,725 67,522 67,482 71,726 77,327 87,789 57,665 67,462 67,422 71,666 77,267 87,729 55,475 64,822 64,782 68,841 74,222 84,234 54,785 63,982 63,942 67,939 73,247 83,109

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 Gross pay A1 city A CTGA1 S15 S19 S21 S24 S29 S30 S33
26030 32218 38405 45521 58205 70580 74293 23720 29345 34970 41439 52970 64220 67595 7215 9190 11603 12423 16084 16946 17715

CTGA
33245 41408 50008 57943 74289 87526 92008

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Figure 6-1: S1 CTG Pie Chart
S1 CT G breakup BP+DP+DA HRA A1 leave encash 2% Medical 7% Medical post retirment 6% CCA A1 TA Reimbursement of T ution fee LT C LT C Pension Gratuity Pension 8% BP+DP+DA 54% leave encash Medical LT C 0% LT C 0% TA 1% Reimbursement of T ution fee 1% HRA A1 CCA A1 13% 1% Medical post retirment Housing interest subsidy per month Ginsurance Benefit

Gratuity 3%

Ginsurance Benefit 0%

Housing interest subsidy per month 4%

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
BP+DP+DA Medical insurance post retirement 2% S15 CTG break up Ginsurance Benefit 1% HRA CCA Transport allow ance Reimb of T. Fee LTA HTA New spapers Pension Gratuity leave encash Gratuity 1% 1% HTA 0% LTA 1% leave encash Medical Medical insurance post retirement motor vehicle subsidy computer advance subsidy BP+DP+DA 51% interest subsidy per month on HBA Ginsurance Benefit

interest subsidy per month on HBA computer advance subsidy 7% 0% motor vehicle subsidy 0% Medical 3%

Pension 8% New spapers 0% Reimb of T. Fee 0%

Transport allow ance 3% HRA 23% CCA 1%

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 NE PartB

in in

CTG Port blair

in

CTG CAR Nicobar

in

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20 S21 S22 S23 S24 S25 S26 S27

9,489 9,973 10,092 10,411 11,449 11,893 14,392 15,948 17,534 19,020 22,147 22,025 24,704 24,847 26,544 29,380 29,380 33,087 32,216 34,737 40,065 42,192 40,065 46,587 48,799 52,539 52,539

9,589 10,073 10,192 10,511 11,549 11,993 14,592 16,148 17,734 19,220 22,447 22,325 25,004 25,147 26,844 29,680 29,680 33,387 32,516 35,037 40,365 42,492 40,365 46,887 49,099 52,839 52,839

9,941 10,432 10,555 10,885 11,992 12,453 15,222 16,834 18,476 20,019 23,358 23,236 26,022 26,171 27,924 30,872 30,872 34,729 33,821 36,415 41,895 44,106 41,895 48,676 50,977 54,864 54,864

10,167 10,662 10,789 11,126 12,271 12,743 15,542 17,192 18,871 20,451 23,915 23,794 26,651 26,803 28,594 31,617 31,617 35,573 34,641 37,283 42,865 45,132 42,865 49,819 52,180 56,164 56,164

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S28 S29 S30 S31 S32 S33 S34
46,587 59,675 69,772 69,732 74,100 79,847 90,609 46,887 59,975 70,072 70,032 74,400 80,147 90,909 48,676 62,225 72,772 72,732 77,286 83,252 94,464 49,819 63,675 74,522 74,482 79,160 85,272 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
Standard package

A Gross pay
Basic pay Dearness pay Dearness allowance HRA CCA Transport allowance

B Benefits

C Variable pay

Telephones Productivity Linked Newspapers Bonus for non Children Education Assistance gazetted staff 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

Package for special A+B+C as above + some/any of the following or all of the following functions 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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XLRI Jamshedpur Package for special A+B+C as in the first row + any/some of the following: geography 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 Kilometrage Allowance/ Allowance in lieu of kilometrage Allowances/Benefits Allowance in lieu of Running Room of running staff 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

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.

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Table 8-2: CTG of Railway passes

Grade S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S19 S21 S24 S26 S29 S30 S31 S32 S33

Pay at the minimum of pay Passes scale 2550 2610 2650 2750 3050 3200 4000 4500 5000 5500 6500 6500 7450 7500 8000 10000 12000 14300 16400 18400 22400 22400 24050 26000
506 506 506 506 506 506 506 1950 1950 1950 1950 1950 1950 1950 2732 2732 2732 2732 2732 9364 9364 9364 7023 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. 64 Estimating cost to government

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Table 8-3: CTG of Railway passes post retirement

cost of passes post retirement S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S19 S21 S24 S26 S29 S30 S31 S32 S33
41 41 41 41 41 41 41 118 118 118 118 118 118 118 165 165 165 165 165 283 283 283 283 283

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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 S4 S5 S7 S8 S9 S10 S12 S13 2750.00 3050.00 4000.00 4500.00 5000.00 5500.00 6000.00 6500.00 7450.00 72.50 77.50 100.00 125.00 150.00 175.00 200.00 225.00

Final Payment 4400.00 4590.00 6000.00 7000.00 8000.00 9000.00 9800.00 10500.00 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.

66 Estimating cost to government

XLRI Jamshedpur

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.

67 Estimating cost to government

XLRI Jamshedpur

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 A class B1 class B2 month for city city city A1 city
10489 10961 11086 11420 12428 12895 15623 18646 19654 21707 25009 25089 27940 27646 30477 33479 37048 44520 51388 64161 70183 81379 78998 81272 87812 9886 10344 10460 10771 11692 12125 14663 17573 18469 20410 23487 23567 26204 25898 28617 31394 34738 41760 48110 60411 65983 76279 73898 75801 81902 9831 10289 10405 10716 11617 12050 14578 17488 18384 20325 23227 23307 25944 25638 28157 30934 34278 41300 47650 59951 65523 75819 73438 75341 81442

class C class Unclassified city city

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S19 S21 S24 S26 S29 S30 S31 S32 S33

9801 10259 10375 10686 11582 12015 14518 17428 18324 20265 23167 23247 25884 25578 28097 30874 34218 41240 47590 59891 65463 75759 73378 75281 81382

9479 9930 10042 10342 11174 11590 13948 16802 17642 19526 22316 22396 24926 24615 27077 29742 32973 39770 45862 57926 63273 73119 70738 72456 78337

9383 9832 9942 10239 11059 11470 13798 16633 17454 19320 22072 22152 24646 24333 26777 29404 32598 39320 45325 57311 62583 72279 69898 71554 77362

68 Estimating cost to government

XLRI Jamshedpur
Table 8-6: CTG of Running staff (railways)

Post/Grade CTG per A month for A1 S4 S5 S7 S8 S9 S10 S12 S13
16761 18387 23724 26383 28729 30663 32957 35671 39342 15907 17445 22494 25006 27206 28994 31142 33710 37103

B1

B2

C

Unclassified

15832 17370 22409 24921 27121 28909 30882 33450 36843

15797 17335 22349 24861 27061 28849 30822 33390 36783

15330 16824 21644 24083 26210 27925 29825 32319 35574

15196 16675 21449 23864 25966 27657 29532 32002 35210

69 Estimating cost to government

XLRI Jamshedpur

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 70 Estimating cost to government

XLRI Jamshedpur 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 Lieutenant/ Sub Lieutenant/ Flying Officer Captain/Lieutenant/Flt. Lieutenant Major/Lt. Cdr./Sqdn.Leader Lt. Colonel/Commander/Wg. Commander Colonel/Captain/Gp Captain Brigadier/Commodore/Air Commodore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoC-in-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff

Pay Scale Rs.8250-300-10050 Rs.9600-300-11400+ rank pay ofRs.400

Rs.11600-325-14850-+rank pay of Rs.1200 Rs.13500-400-17100-+rank pay of Rs.1600 Rs.15100-450-17350-+rank pay of Rs.2000 Rs.16700-450-18050+rank pay of Rs.2400 Rs.18400-500-22400 Rs.22400-525-24500 Rs.26000/Rs.30000/-

71 Estimating cost to government

XLRI Jamshedpur
Table 9-2: Pay scale of PBOR(S)

Personnel Below Officer Rank (Army) ARMY Combatant Group ‘X’ Rank Sub Major Subedar Nb Subedar Hav Naik Sepoy 7250-200-10050 6750-190-9790 5770-140-8290 4150-100-5650 3700-85-4975 3600-70-4650 6750-200-9550 6600-170-9320 5620-140-8140 3600-100-5100 3425-85-4700 3250-70-4300 6600-200-9400 6170-155-8650 5200-125-7450 3250-85-4525 3150-70-4200 3050-55-3875 Combatant Group ‘Y’ Combantant Group ‘Z’

Personnel Below Officer Rank (Navy) Rank Combatant Group ‘X’ Rank Combatant Group ‘Y’ Combantant Group ‘Z’

MCPO I MCPO II Chief Art ART III-I ART IV

7400-200-10200 6750-190-9790 6000-125-8250 5120-100-7120 4550-100-6350

MCPO I MCPO II CPO Petty Officer Leading Seaman

6750-200-9550 6600-170-9320 5620-140-8140 4320-85-5595 3900-70-4950

6600-200-9400 6170-155-8650 5200-125-7450 3775-85-5050 3200-70-4250

ART V APP

4150-70-4360 3200-60-3260

Seaman I Seaman II

3650-60-4550 3325-60-3445

3080-60-3980 2865-55-3140

72 Estimating cost to government

XLRI Jamshedpur Personnel Below Officer Rank (Air Force) Rank Combatant Group ‘X’ Combatant Group ‘Y’ Combantant Group ‘Z’

MWO WO JWO SGT CPL LAC AC

7400-200-10200 6750-190-9790 5770-140-8290 4670-85-5945 4150-70-5200 4025-60-4925 3675

6750-200-9550 6600-170-9320 5620-140-8140 4320-85-5595 3900-70-4950 3650-60-4550 3250

6600-200-9400 6170-155-8650 5200-125-7450 3775-85-5050 3200-70-4250 3080-60-3980 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.

73 Estimating cost to government

XLRI Jamshedpur
Table 9-3: Package of pay, benefits and allowances for armed forces

CTC Standard package

A Gross pay • • • • • • • •

B Benefits • Telephones Basic pay • Newspapers Rank Pay for officers • Children Education Assistance Dearness pay • Leave Travel Concession Dearness allowance • Home Travel Concession CILQ/ HRA • Form D/ Concession Vouchers CCA • Pension Transport allowance • Gratuity Kit Maintenance • Leave encashment Allowance/ Composite • Home Loan Subsidy, Vehicle Personal Maintenance Loan Subsidy, Allowance • 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)

C Variable pay Non-productivity linked bonus for PBORs

Package for A+B+C as above + any/some of the following or all of the following special functions • Non-Practicing Allowance (doctors) or qualifications • 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

74 Estimating cost to government

XLRI Jamshedpur
• 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 Package for A+B+C as in the first row + any/some all of the following: special geography • 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

75 Estimating cost to government

XLRI Jamshedpur

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

76 Estimating cost to government

XLRI Jamshedpur

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 payscale

of

the Percentage of the Amount previous column

per

month

deposited to the pension account

Sub Major Subedar Nb Subedar Hav Naik Sepoy

6,750.00 6,600.00 5,620.00 3,600.00 3,425.00 3,250.00

35 35 35 40 60 74

2025 1980 1686 1260 1884 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.

77 Estimating cost to government

XLRI Jamshedpur

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 Basic 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00
3,250.00 3,315.00 3,381.30 3,448.93 3,517.90 3,588.26 3,660.03 3,733.23 4,036.37 4,364.12 7,460.17 7,609.38 8,059.97 8,221.17 8,385.60 8,553.31 8,724.37

74% DA
0.00 198.90 405.76 620.81 844.30 1,076.48 1,317.61 1,567.96 1,827.79 2,223.23 0.00 456.56 931.39 1,479.81 2,012.54 2,565.99 3,140.77

Total
3,250.00 3,513.90 3,787.06 4,069.73 4,362.20 4,664.74 4,977.64 5,301.18 5,864.16 6,587.35 7,460.17 8,065.94 8,991.36 9,700.98 10,398.14 11,119.30 11,865.15 2,409.88 2,458.07 2,507.23 2,557.38 2,608.53 2,660.70 2,713.91 2,768.19 2,992.97 3,235.99 5,531.72 5,642.35 5,976.47 6,096.00 6,217.92 6,342.28 6,469.12 28,918.50 29,496.87 30,086.81 30,688.54 31,302.31 31,928.36 32,566.93 33,218.27 35,915.59 38,831.94 66,380.63 67,708.24 71,717.63 73,151.98 74,615.02 76,107.32 77,629.47 99,073.12 93,569.06 88,370.78 83,461.29 78,824.55 74,445.41 70,309.55 66,403.47 66,477.25 66,551.11 105,337.72 99,485.62 97,571.05 92,150.43 87,030.96 82,195.91 77,629.47 1,428,886.77

1,428,026.42

78 Estimating cost to government

XLRI Jamshedpur 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 Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt. Colonel/Commander/Wg.Commander Colonel/Captain/Gp. Captain Ration
971 971 971 971 971

Canteen
120 120 120 120 120

79 Estimating cost to government

XLRI Jamshedpur Brigadier/Commondore/Air Commondore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoC-in-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff
971 971 971 971 971 120 120 120 120 120

PBOR Rank Sub Major Subedar Nb Subedar Hav Naik Sepoy Ration 964.80 964.80 964.80 964.80 964.80 964.80 Canteen 72.00 72.00 72.00 72.00 72.00 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 80 Estimating cost to government

XLRI Jamshedpur 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.

81 Estimating cost to government

XLRI Jamshedpur

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 Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt. Colonel/Commander/Wg.Commander Colonel/Captain/Gp. Captain Brigadier/Commondore/Air Commondore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoC-in-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff

HTC
342 455 455 455 455 780 2000 2000 1333 1333

LTCA
683 911 911 911 911 1561 4000 4000 2667 2667

Form D
273 273 273 273 273 468 468 468 468 468

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: 82 Estimating cost to government

XLRI Jamshedpur 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.

83 Estimating cost to government

XLRI Jamshedpur

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 Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt.Colonel /Commander / Wg.Commander Colonel/Captain/Gp. Captain Brigadier/Commodore/Air Commodore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoCin-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff

Tuition Newsp Telephones 0
40 80 80 80 80 40

pension
2475 2880 3480 4050 4530 5010 5520 6720 7800 9000

Gratuity computers 411 411 411 411 411 411 411 411 411 411
126 126 126 126 126 126 126 126 126

Ration 971 971 971 971 971 971 971 971 971 971

HTA
342 455 455 455 455 780 2000 2000 1333 1333

LTCA Form D
683 911 911 911 911 1561 4000 4000 2667 2667 273 273 273 273 273 468 468 468 468 468

Special LTC 114 114 114 114 114 195 667 667 667 667

0 0 0 0 1500 1500 1800 1800 2800 2800

0 0 0 80 80 160 240 240 240

84 Estimating cost to government

XLRI Jamshedpur

Rank

H

loan

Car subsidy

loan

Compute r Loan

Childc onveya nce

cante en

Medical care

Leaves

post retirement M

Leave encashme nt 538 538 538 538 538 538 541 629 760 885 990 1095

Furnitur e

Elecy

Benefit

Wa ter

Sum all

of

subsidy Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt. Colonel / Commander / Wg.Commander Colonel/Captain/Gp. Captain Brigadier/Commodore/Ai r Commodore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoC-inC/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff 664 664 664 664 664 664 80 80 80 762 762 762 126 126 126 126 126

benefits 124 176 216 216 216 216 200 200 200 200 200 200 50 50 50 50 50 50 50 50 50 9584 11324 12806 14512 17010 19098

120 150 300 300 300 300 120 120 120 120 120

738 984 984 984 984 984

1375 1667 2188 2517 2850 3183

664 664

762 762

126 126

150 0

120 120

984 738

3067 3733

538 538

1206 1468

302 302

200 200

23538 25311

664

762

126

0

120

667

4333

538

1704

638

200

26492

664

762

126

0

120

667

5000

538

1967

638

200

50

28621

85 Estimating cost to government

XLRI Jamshedpur

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 Subedar Nb Subedar Hav Naik Sepoy

300 300 300 300 300 150

965 965 965 965 965 965

72 72 72 72 72 72

2363 2310 1967 1440 2055 2405

451 641 767 640 579 479

325 325 325 112 112 84

650 650 650 225 225 169

364 364 364 134 134 134

1125 1100 937 600 571 542

447 456 399 263 260 251

984 984 984 984 984 738

538 538 538 538 1046 1520

80 80 80 80 80 80

664 664 664 664 664 664

9608 9730 9293 7299 8327 8494

∗ Sum of all benefits includes a non-productivity linked bonus of Rs. 202 per month.

86 Estimating cost to government

XLRI Jamshedpur

Table 10-6: Gross pay for Officers

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

C city Armed forces in Siachen

C city Armed Forces in HFAA&RLA

Gross pay with High Altitude +remote locality allowance High Al Area+Remote
20096 23971 30934 35281 39481 43681 42211 50611 58171

Gross pay with flying allowance in a B1 city
23914 28851 37383 41826 46326 49076 47501 56501 64601

Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt. Colonel/Commander/Wg.Commander Colonel/Captain/Gp. Captain Brigadier/Commondore/Air Commondore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoCin-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff

21790 26121 33856 38744 43694 48644 46911 56811 65721 75621

19874 23811 30843 35286 39786 44286 42711 51711 59811

19414 23351 30383 34826 39326 43826 42251 51251 59351

19354 23291 30323 34766 39266 43766 42191 51191 59291

18306 22046 28726 32948 37223 41498 40001 48551 56246

28386 32221 39114 43581 47781 51981 50511 58911 66471

21386 25221 32114 36581 40781 44981 43511 51911 59471

87 Estimating cost to government

XLRI Jamshedpur

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

Officers Rank Lieutnant/Sub Lieutnant/Flying Officer Captain/Lieutnant/Flt. Lieutnant Major/Lt. Cdr./Sqdn Leader Lt. Colonel/Commander/Wg.Commander Colonel/Captain/Gp. Captain Brigadier/Commondore/Air Commondore Major General/Rear Admiral/Air Vice Marshal Lieutenant General/Vice Admiral/Air Marshal Vice Chief/Army Commander/FoCin-C/AOC-in-C Chief of Army Staff/Naval Staff/Air Staff

CTG for CTG for CTG for CTG for CTG for C CTG for C CTG for C CTG for C A1 City A City B1 City B2 City City City with City with City HAA siachen HFAA and and RL RLA
31374 37446 46662 53256 60704 67742 70450 82123 92213 104242 29458 35136 43649 49798 56797 63385 66250 77023 86303 28998 34676 43189 49338 56337 62925 65790 76563 85843 28938 34616 43129 49278 56277 62865 65730 76503 85783 27890 33371 41532 47460 54233 60596 63540 73863 82738 38085 43660 52034 58207 64906 71275 74716 84889 93630 30971 36546 44920 51093 57792 64080 67050 77223 85963 29681 35296 43740 49793 56492 62780 65750 75923 84663

CTG for B1 city with Fly all &SLTC
33612 40290 50303 56452 63451 68370 71706 82479 91760

88 Estimating cost to government

XLRI Jamshedpur

Table 10-8: Gross pay (PBOR) Gross pay for A1 class Gross pay for A 15884 15580 13596 8815 8311 7956 Gross pay for B1 15624 15320 13336 8740 8236 7881 Gross pay for B 15564 15260 13276 8705 8201 7846 Gross pay for C 14994 14690 12706 8340 7836 7481 Gross pay for unclassified 14694 14390 12406 8100 7686 7331 Gross pay for unclassified in Siachen 22271 21967 19983 14707 13973 13618 Gross pay for CHFAA 17604 17300 15316 10040 9306 8951

Rank Sub Major Subedar Nb Subedar Hav Naik Sepoy

city 17294 16990 15006 9915 9261 8906

Table 10-9: CTG PBOR(S) CTG CTG for CTG A1 class city CTG for A 25694 25310 22889 16114 16638 16450 B1 25434 25050 22629 16039 16563 16375 CTG for B 25374 24990 22569 16004 16528 16340 CTG for C 24804 24420 21999 15639 16163 15975 CTG for unclassified in Siachen 32081 31697 29276 22006 22300 22112 CTG for

unclassified 24504 24120 21699 15399 16013 15825

CHFAA 27212 27030 24609 17339 17633 17445

Sub Major Subedar Nb Subedar Hav Naik Sepoy

27104 26720 24299 17214 17588 17400

89 Estimating cost to government

XLRI Jamshedpur

Figure 10-1: Sepoy CTG Pie Chart sepoy CTG breakup Medical post retirement 9%

Medical 4%

HBA benefit 4% TPBA Clas All CCA A1

Leave En 1%

CILQ C TA ReimbTFe CPMA Chldren conveyance TPBA 40% Ration Canteen Pension Gratuity HTA Clas All 1% LTC Chldren conveyance CCA A1 Additional Rail Concession 1% 1% Leaves Leave En Medical CILQ C 4% CPMA 0% Medical post retirement HBA benefit

Leaves 7%

LTC 1% HTA 1%

Additional Rail Concession 1%

Pension 15%

Gratuity 3% Canteen 0% Ration 6% ReimbTFe 0%

TA 0%

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.

90 Estimating cost to government

XLRI Jamshedpur
Figure 10-2: CTG Pie Chart Major/Lt. Cdr/Sqdrn. Leader
Major/Sqdn Leader/Lt Cdr

Medical care 2%

Leaves 5% Leave encashment 2%

Water 0% Elecy 0%

BP+DP+DA CCA HRA Transport Allowance Uniform Al
Furniture 0%

post retirementM 1% Childconveyance 1%

canteen 0% Special LTC 0%

Computer Loan subsidy 0% H loan Benefit Form D 1% 1% Car loan subsidy 0% Gratuity 1% KMA 0%

KMA Tuition pension Gratuity Ration HTA LTCA

LTCA 2% Ration 2% HTA 1%

BP+DP+DA 57%

Form D Special LTC H loan Benefit Car loan subsidy Computer Loan subsidy Childconveyance canteen Medical care post retirementM Leaves

pension 7%

Uniform Al 0%

Transport Allowance 2%

Leave encashment Furniture Elecy Water
CCA 1%

Tuition 0%

HRA 13%

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.

91 Estimating cost to government

XLRI Jamshedpur

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 encash 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:

92 Estimating cost to government

XLRI Jamshedpur

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

CTC
Standard package

A Gross pay
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)

B Benefits

C Variable pay

Telephones Non-productivity Newspapers linked bonus 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 Package for special A+B+C as above + any/some of the following or all of the following functions 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 Package for special A+B+C as in the first row + any/all of the following: geography 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 •

93 Estimating cost to government

XLRI Jamshedpur

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 2I/C Dy Comdt Asst Comdt Subedar Major Inspector Sub.Inspector ASI Havaldar/head constable Constable Follower 722.00 722.00 722.00 722.00 722.00 722.00 722.00 722.00 722.00 722.00 722.00

94 Estimating cost to government

XLRI Jamshedpur

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

Gross A city pay at A1 class city DG Addnl. DG IG DIG Comdt 2I/C Dy Comdt Asst Comdt Subedar Major Inspector Sub.Inspector ASI Havaldar/Head Constable Constable Follower
65236 56326 46426 41476 36278 30586 25636 20686 16638 16338 13863 10150 8120 7749 6622 59326 51226 42226 37726 33001 27826 23326 18826 15146 14846 12596 9220 7375 7037 6020

B1 city

B2 city

C city

UnCILQ classified city
54986 47426 39026 34826 30416 25586 21386 17186 13850 13725 11625 8475 6795 6480 5556 0 0 0 0 0 0 0 0 14010 13885 11765 8585 6889 6571 5638

59066 50966 41966 37466 32741 27566 23066 18566 14916 14791 12541 9165 7325 6987 5980

59006 50906 41906 37406 32681 27506 23006 18506 14886 14761 12511 9135 7308 6970 5965

55961 48266 39716 35441 30952 26036 21761 17486 14094 13969 11832 8625 6915 6594 5654

95 Estimating cost to government

XLRI Jamshedpur

Table 11-3: Table of CTG for CPMF CTG at A1 city A class city B1 class city B2 class city C class city Unclassifie d city 74618 65614 55665 49256 44132 37727 32156 25666 21669 21544 18742 14380 12072 11350 10070 21829 21704 18882 14490 12166 11441 10152 CILQ

DG Addnl. DG IG DIG Comdt 2I/C Dy Comdt Asst Comdt Subedar Major Inspector Sub.Inspector ASI Havaldar/head constable Constable Follower

84868 74514 63065 55906 49995 42727 36406 29166 24456 24156 20980 16055 13397 12619 11136

78958 69414 58865 52156 46718 39967 34096 27306 22964 22664 19713 15125 12652 11907 10533

78698 69154 58605 51896 46458 39707 33836 27046 22734 22609 19658 15070 12602 11857 10493

78638 69094 58545 51836 46398 39647 33776 26986 22704 22579 19628 15040 12585 11840 10478

75593 66454 56355 49871 44669 38177 32531 25966 21912 21787 18949 14530 12192 11464 10168

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.

96 Estimating cost to government

XLRI Jamshedpur

13 EMPLOYMENT SECURITY & COST OF NO-EASYEXIT
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

97 Estimating cost to government

XLRI Jamshedpur 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. 98 Estimating cost to government

XLRI Jamshedpur 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.

99 Estimating cost to government

XLRI Jamshedpur

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.

100 Estimating cost to government

XLRI Jamshedpur

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 101 Estimating cost to government

XLRI Jamshedpur 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 102 Estimating cost to government

XLRI Jamshedpur 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% 103 Estimating cost to government

XLRI Jamshedpur 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 104 Estimating cost to government

XLRI Jamshedpur 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 cutoff 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 nonmonetary 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 105 Estimating cost to government

XLRI Jamshedpur 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 nonmonetary 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 106 Estimating cost to government

XLRI Jamshedpur 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 107 Estimating cost to government

XLRI Jamshedpur 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 108 Estimating cost to government

XLRI Jamshedpur 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. 109 Estimating cost to government

XLRI Jamshedpur 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., 110 Estimating cost to government

XLRI Jamshedpur

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 111 Estimating cost to government

XLRI Jamshedpur

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. 112 Estimating cost to government

XLRI Jamshedpur 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 unappreciated by the organization when I think about what they pay me.’

113 Estimating cost to government

XLRI Jamshedpur 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.

114 Estimating cost to government

XLRI Jamshedpur 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% 115 Estimating cost to government

XLRI Jamshedpur 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. 116 Estimating cost to government

XLRI Jamshedpur

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.

117 Estimating cost to government

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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 118 Estimating cost to government

XLRI Jamshedpur 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 119 Estimating cost to government

XLRI Jamshedpur ‘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. 120 Estimating cost to government

XLRI Jamshedpur

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’ 121 Estimating cost to government

XLRI Jamshedpur 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’

122 Estimating cost to government

XLRI Jamshedpur 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’

123 Estimating cost to government

XLRI Jamshedpur 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’ 124 Estimating cost to government

XLRI Jamshedpur 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 quantum of various types of leave can be curtailed by compensating with cash’ ‘the

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’

125 Estimating cost to government

XLRI Jamshedpur 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 difficult for me to find a more challenging job in the private sector’. ‘it is not

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 126 Estimating cost to government

XLRI Jamshedpur standardization’ while 55% disagreed to the statement ‘the pay structure presently prevailing in government ensures efficiency’. Similarly 62% disagreed that ‘the pay ensures employee satisfaction.” An

structure presently prevailing in government

overwhelming majority (96%) of the respondents felt that ‘there is a pressing need to review and rationalize the pay structure to improve employee efficacy’

127 Estimating cost to government

XLRI Jamshedpur

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. 128 Estimating cost to government

XLRI Jamshedpur

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.
Industry pay rank in the industry Pay levels Broadband if any Pay differentials Lower Middle Senior pay range in each level components of CTC BASIC Supplementary all postion pay DA HRA CCA conveyance all telephone all Education all LTC Performance linked Pay Car schemes for managers cars for managers computer schemes for Mgrs. Housing loan interest subsidy PF Gratuity Pension Medical (nominal value) Furniture/AC LTC/holiday plan Esops pricing Job Security Orgn 1 Construction top payer 19 6 13% to 20% 13% to 20% 15% to 20% 60 to 130% y n y y y y y y y y y y y y y n Org 2 conglomerate 75th %tile 15 7 25% to 30% 35% to 40% 35% to 40% 65% to 120% y y n y y y y y y y y n y y y y y y y Org 3 Fin. 50th %tile na 6 15% to 20% 15% to 20% 15% to 20% 70 to 130% y y n y y y y Org 4 Mfg. 50th %tile NA 4 30 80 65 10 to 80% Y Y Y N Y Y Y

Y

y n y y

Y Y N Y Y

n can price but cannot should not be priced

be

Cannot be priced

129 Estimating cost to government

XLRI Jamshedpur

130 Estimating cost to government

XLRI Jamshedpur

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.

131 Estimating cost to government

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Items Government Minimum of pay scale of 2550 the lowest pay level No. of levels 34 HRA and CCA Canteen allowance 0 Education allowance 80

NTPC 3750 25 Similar to govt. 630-820 150

IOC 4600 17 475 200

HAL 2900 22 2500 NA

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 Post / Grade Basic Salary IOC Basic Salary Scale in govt % increase of CTC over govt pay A1 A B1 B2 C

I IV A

4600 5400 12000

S1 S9 S15

2550 5,000 8000

1.83 1.07 1.17

1.78 1.05 1.14

1.76 1.04 1.14

1.76 1.04 1.15

1.73 1.03 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 132 Estimating cost to government

XLRI Jamshedpur Post / Grade W-0 E2 S1 S15 Basic Salary of Basic salary NTPC (at the of Govt at the min. of scale min. of scale A1 3750 2550 1.23 8600 8000
0.97

A 1.30
1.02

B1 1.25
0.99

B2 1.25
0.99

C 1.30
1.03

133 Estimating cost to government

XLRI Jamshedpur

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.

134 Estimating cost to government

XLRI Jamshedpur

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) S1 S5 S9 S12 S15 S23 S33 3.81 3.91 3.60 3.50 3.46 3.48 3.22 3.42 3.42 3.20 3.09 3.04 3.09 2.85 The no. by which BP should be multiplied to arrive at CTG (C city) The no. by which BP should be multiplied to arrive at CTG (unclassified) 3.38 3.38 3.16 3.05 3.00 3.05 2.82

Table 16-2 CTG as multiple of Basic pay: Railways Grade/Post The no. by which BP should be multiplied to arrive at CTG (A1 city) S1 S5 S9 S12 S15 S17 S23 S33 4.11 4.07 3.93 3.86 3.81 3.72 3.74 3.38 The no. by which BP should be multiplied to arrive at CTG (C city) 3.72 3.66 3.53 3.45 3.38 3.27 3.35 3.01 The no. by which BP should be multiplied (unclassified) 3.72 3.63 3.49 3.41 3.35 3.27 3.31 2.98 to arrive at CTG

135 Estimating cost to government

XLRI Jamshedpur
Table 16-3 Armed Forces (PBOR): CTG as a multiple of basic pay Grade/Post The no. by which BP should be The no. by which BP should be multiplied to arrive at CTG (C city) The no. by which BP should be multiplied to arrive at CTG (C city)

multiplied to arrive at CTG (A1 city)

Sepoy Havaldar Subedar Major

5.35 4.78 4.02

4.91 4.34 3.67

4.86 4.28 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) Lieutnant/Sub Lieutnant/Flying Officer Major/Lt. Leader Vice Chief/Army 4.02 3.16 Cdr./Sqdn 3.56 3.18 3.80 The no. by which BP should be multiplied to arrive at CTG (C city) 3.38

Commander/FoC-inC/AOC-in-C

Table 16-5 CPMF: 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 should be multiplied to arrive at CTG (C city) DG 3.26 IG Comdt Asst Comdt Havaldar/head constable Constable Follower 3.46 3.50 3.65 4.19 4.14 4.27 3.06 3.12 3.25 3.25 3.76 3.90 3.03 2.40 3.21 3.77 3.75 3.86 The no. by which BP should be multiplied to arrive at CTG (unclassified city)

136 Estimating cost to government

XLRI Jamshedpur

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.

137 Estimating cost to government

XLRI Jamshedpur

Post / Grade

LTA

HTA

Telephones

Newspapers

Pension

Gratuity

Leave encash

Cost medical net Deductions 7.18% 9.24% 9.13% 8.84% 8.08% 7.77% 6.41% 5.59% 5.07% 4.67% 3.99% 4.02% 3.46% 3.44% 3.19% 2.88% 2.88% 2.41% 2.62% 2.30%

Medical insurance post retirement 5.53% 5.27% 5.20% 5.04% 4.61% 4.43% 3.66% 3.29% 2.99% 2.75% 2.35% 2.36% 2.10% 2.09% 1.94% 1.75% 1.75% 1.56% 1.60% 1.48%

Motor vehicle subsidy

computer advance subsidy

HBA interest subsidy per month 4.23% 4.12% 4.13% 4.16% 4.21% 4.25% 4.38% 4.44% 4.48% 4.53% 4.58% 4.61% 4.70% 4.70% 4.20% 4.26% 4.26% 4.34% 4.31% 4.26%

Ginsurance Benefit

Sum of all benefits

S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14 S15 S16 S17 S18 S19 S20

0.43% 0.55% 0.54% 0.52% 0.48% 0.46% 0.38% 1.00% 0.91% 0.83% 0.71% 0.72% 0.64% 0.63% 0.82% 0.74% 0.74% 0.66% 0.68% 0.63%

0.22% 0.27% 0.27% 0.26% 0.24% 0.23% 0.19% 0.50% 0.45% 0.42% 0.36% 0.36% 0.32% 0.32% 0.41% 0.37% 0.37% 0.33% 0.34% 0.31%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.35% 0.31% 0.31% 0.29% 0.26% 0.26% 0.23% 0.24% 0.22%

7.87% 7.67% 7.69% 7.73% 7.83% 7.90% 8.15% 8.26% 8.33% 8.43% 8.53% 8.57% 8.74% 8.75% 8.67% 8.80% 8.80% 8.96% 8.91% 8.81%

2.82% 2.74% 2.76% 2.76% 2.81% 2.83% 2.79% 2.51% 2.28% 2.10% 1.80% 1.81% 1.61% 1.60% 1.48% 1.34% 1.34% 1.19% 1.22% 1.13%

1.72% 1.68% 1.68% 1.69% 1.71% 1.73% 1.78% 1.80% 1.82% 1.84% 1.86% 1.87% 1.91% 1.91% 1.89% 1.92% 1.92% 1.96% 1.95% 1.92%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.44% 0.41% 0.35% 0.35% 0.31% 0.31% 0.29% 0.26% 0.26% 0.23% 0.24% 2.10%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.44% 0.41% 0.35% 0.35% 0.31% 0.31% 0.29% 0.26% 0.26% 0.23% 0.24% 0.35%

0.28% 0.27% 0.27% 0.48% 0.44% 0.42% 0.35% 0.31% 0.28% 0.57% 0.49% 0.49% 0.43% 0.43% 0.77% 0.69% 0.69% 0.62% 0.63% 0.59%

30.69% 32.58% 32.44% 32.23% 31.09% 30.68% 28.64% 28.19% 27.94% 27.37% 25.72% 26.21% 25.16% 25.11% 24.53% 23.81% 23.81% 22.93% 23.22% 24.32%

138 Estimating cost to government

XLRI Jamshedpur

Post / Grade

LTA

HTA

Telephones

Newspapers

Pension

Gratuity

Leave encash

Cost medical net Deductions 1.99% 1.89% 1.99% 1.71% 1.63% 1.52% 1.52% 1.71% 1.34% 0.80% 0.80% 0.67% 0.62% 0.54%

Medical insurance post retirement 1.29% 1.22% 1.29% 1.11% 1.05% 0.98% 0.98% 1.11% 0.86% 0.74% 0.74% 0.69% 0.64% 0.57%

Motor vehicle subsidy

computer advance subsidy

HBA interest subsidy per month 4.17% 4.20% 4.17% 4.27% 4.19% 3.89% 3.89% 4.27% 3.42% 2.92% 2.92% 2.75% 2.55% 2.25%

Ginsurance Benefit

Sum of all benefits

S21 S22 S23 S24 S25 S26 S27 S28 S29 S30 S31 S32 S33 S34

0.55% 0.52% 0.55% 0.47% 0.45% 0.71% 0.71% 0.47% 2.14% 1.37% 1.37% 1.29% 0.80% 0.70%

0.27% 0.26% 0.27% 0.23% 0.22% 0.35% 0.35% 0.23% 1.07% 0.68% 0.68% 0.64% 0.40% 0.35%

3.59% 3.40% 3.59% 3.08% 2.94% 2.73% 2.73% 3.08% 2.89% 2.46% 2.46% 2.32% 3.35% 2.95%

0.19% 0.18% 0.19% 0.16% 0.16% 0.15% 0.15% 0.16% 0.26% 0.33% 0.33% 0.31% 0.29% 0.25%

8.61% 8.68% 8.61% 8.81% 8.88% 8.95% 8.95% 8.81% 8.85% 9.20% 9.20% 9.29% 9.32% 9.47%

0.98% 0.93% 0.98% 0.84% 0.81% 0.75% 0.75% 0.84% 0.66% 0.56% 0.56% 0.53% 0.49% 0.43%

1.88% 1.90% 1.88% 1.93% 1.94% 1.96% 1.96% 1.93% 1.93% 2.01% 2.01% 2.03% 2.04% 2.07%

1.82% 1.73% 1.82% 1.56% 1.49% 1.39% 1.39% 1.56% 1.22% 1.04% 1.04% 0.98% 0.91% 0.80%

0.30% 0.29% 0.30% 0.26% 0.25% 0.23% 0.23% 0.26% 0.20% 0.17% 0.17% 0.16% 0.15% 0.13%

0.51% 0.48% 0.51% 0.44% 0.42% 0.39% 0.39% 0.44% 0.34% 0.29% 0.29% 0.27% 0.25% 0.22%

26.34% 25.87% 26.34% 25.04% 24.58% 24.13% 24.13% 25.04% 25.24% 22.63% 22.59% 21.93% 21.80% 20.73%

139 Estimating cost to government

XLRI Jamshedpur

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 140 Estimating cost to government

XLRI Jamshedpur 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 141 Estimating cost to government

XLRI Jamshedpur 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 142 Estimating cost to government

XLRI Jamshedpur 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.

143 Estimating cost to government

XLRI Jamshedpur

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.

144 Estimating cost to government

XLRI Jamshedpur

18 Annexure

18.1 Premium Rates of Mediclaim Policies
Premium Rates of Mediclaim Policies of Oriental Insurance Company Ltd. In India

Sum Insured

Domiciliary Hosp. Limit

Age in Years 3m-20 609 883 1179 1454 1728 1975 2221 2660 3100 3483 3867 4252 21-35 677 981 1310 1615 1920 2194 2468 2956 3444 3870 4297 4724 36-45 809 1174 1566 1932 2295 2623 2951 3534 4117 4627 5138 5647 46-55 1265 1836 2447 3026 3605 4142 4680 5672 6664 7573 8483 9392 56-60 1799 2604 3483 4310 5136 5912 6687 8133 9581 10925 12267 13611 61-70 2688 3886 5196 6436 7676 8846 10018 12222 14428 16494 18562 20628 above 70 3600 5203 6960 8683 10405 12040 13678 16778 19878 22805 25735 28663

50000 75000 100000 125000 150000 175000 200000 250000 300000 350000 400000 450000

10000 15000 20000 23750 27500 31250 35000 40000 45000 50000 50000 50000

145 Estimating cost to government

XLRI Jamshedpur

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.

Source: www.Indiastat.com

18.2 Age group wise expectation of life in India

Age Group-wise Expectation of Life in India (1901-2002) Census Year At Birth Male FeMale 1901 1911(a) 1921 1931(a) 1941 1951 146 Estimating cost to government Age 10 Male Female Age 20 Male Female Age 30 Male Female Age 40 Male Female Age 50 Male Female 9.53 Age 60 Male Female 10.02 10.11 Age 70 Male Female -

23.63 23.96 34.73 33.86 28.59 28.64 22.9

23.82 17.91 19.12 13.59 14.5

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 19.42 20.91 29.64 29.21 25.46 25.41 21.64 21.78 17.93 18.31 14.3 26.91 26.56 36.38 33.61 29.57 27.08 23.6 32.09 31.37 41.2 22.3 18.6

14.95 10.67 11.67 -

18.23 14.31 14.65 10.25 10.81 -

38.56 35.02 33.11 29.03 27.89 23.67 22.91 17.77 18.17 12.59 13.68 26.58 26.18 20.53 21.06 14.89 16.15 10.13 11.33 -

32.45 31.66 38.97 39.45 33.03 32.9

XLRI Jamshedpur

1961 1971(b) 1980(c ) 199094$ 199195@ 199296* 199397* 199498* 199599* 1996-00 1997-01 1998-02

41.89 40.55 45.21 43.78 36.9 46.4 54.1 59.4 44.7 54.7 60.4 48.8 56.1 57.3 47.7 58 59.3 41.1 47 48.1

35.63 29.03 27.86 22.07 22.37 16.45 17.46 11.77 12.98 39.9 49.2 50.3 33.5 38 39.1 32 41 41.6 25.9 29.3 30.3 25.4 32.5 32.8 19.2 21.4 22.1 19.7 24.3 24.2 13.6 14.6 15.1 13.8 17 16.5 -

-

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

-

-

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

-

-

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

-

-

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

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

61 61.3 61.6

62.7 63.6 63.3

57.9 58 58.2

60.9 61.3 61.5

48.6 48.7 48.9

51.9 52.2 52.4

39.7 39.8 40

43 43.3 43.6

31 31.2 31.4

34.1 34.4 34.7

22.8 23 23.2

25.5 25.7 26

15.8 16 16.1

17.8 18.1 18.3

-

-

Note : (a) : Expectation of life during the census years 1911 and 1931 relate to birth

147 Estimating cost to government

XLRI Jamshedpur

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.

148 Estimating cost to government

XLRI Jamshedpur

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.) 270320 86.98 0.42 0.09 11.98 13.65 18.02 9.1 24.7 2.75 0.65 7.76 0.87 9.04 10.81 196.81 1.16 5.39 320365 91.47 0.52 0.15 13.57 20.29 19.95 10.6 27.08 3.53 0.82 9.15 0.93 10.09 13.65 221.81 1.55 6 365410 95.26 0.58 0.27 14.86 27.9 22.26 12.46 29.72 4.54 1.11 10.67 1 11.09 16.36 248.1 1.93 6.87 410455 98.83 0.61 0.25 16.28 33.8 23.83 14.84 32.54 5.69 1.25 11.82 1.06 11.93 19.17 271.93 2.22 7.74 455510 101.91 0.68 0.27 17.18 44.28 25.63 16.92 34.02 6.5 1.55 12.94 1.13 12.73 20.94 296.67 2.52 8.29 510580 106.42 0.78 0.37 18.27 53.11 27.6 19.97 36.43 7.86 1.94 14.62 1.21 13.47 24.52 326.57 2.89 9.1 580690 110.83 0.82 0.48 19.91 63.89 30.2 24.76 40.29 10.1 2.35 15.97 1.26 14.9 29.96 365.74 3.44 9.62 690890 113.67 0.94 0.69 22.28 84.26 32.76 27.93 43.1 13.98 3.24 18.74 1.37 16.22 38.7 417.9 3.72 11.19 8901155 119.17 1.34 1.04 24.85 113.58 37.79 33.42 47.93 20.38 4.81 22.52 1.47 18.72 51.01 498.01 4.05 11.5 1155 & more 134 2.01 1.48 31.23 137.9 48.67 54.21 58.52 35.2 8.24 28.43 1.72 23.6 93.9 659.13 4.6 13.58 all classes 100.65 0.73 0.39 17.18 47.31 25.72 18.6 34.07 8.44 1.98 13.25 1.12 12.78 25.37 307.6 2.46 8.05

Item Cereal Gram Cereal Substitutes Pulses & Pulse Products Milk & Milk Products Edible Oil Egg, Fish & Meat Vegetables Fruits (Fresh) Fruits (Dry) Sugar Salt Spices Beverages, Etc. Total : Food Pan Tobacco

0-235 69.21 0.19 0.06 8.2 4.42 12.23 5 17.74 1.48 0.27 4.45 0.75 6.48 6.12 136.58 0.65 3.27

235-270 79.6 0.31 0.07 10.78 9.31 15.4 6.54 21.72 2.19 0.49 6.37 0.79 7.93 8.94 170.45 0.97 4.41

149 Estimating cost to government

XLRI Jamshedpur

Intoxicants Fuel And Light Clothing Footwear Education Medical: Institutional Medical: Non-Inst. Entertainment Minor Personal Effects Toilet Articles Other Hh Consumables Conveyance Other Consumer Services Rent Taxes And Cesses Durable Goods Total: Non-Food Total Expenditure Clothing:2nd Hand* Durable Goods:2nd Hand* Imputed Rent** Alternative Estimates Based On 365 Days Recall (For 5 Non-Food Categories Only) Clothing Footwear Education Medical-Institutional Durable Goods Total Expenditure

1.91 27.26 2.37 0.49 1.65 0.1 4.12 0.27 0.16 6.47 5.12 2.9 5.42 0.07 0.19 0.54 62.95 199.53 0.06 0 0

1.91 33.66 3.76 0.74 2.79 0.04 7.31 0.44 0.32 7.86 6.56 3.84 7.57 0.06 0.3 0.8 83.35 253.8 0.02 0 0

2.18 37.85 5.7 1 3.54 0.15 9 0.68 0.36 9.04 7.79 5.26 9.06 0.22 0.36 1.09 99.82 296.64 0.09 0 0

2.49 42.76 8.05 1.36 5.39 0.17 11.98 1.09 0.53 10.46 8.92 6.6 10.74 0.33 0.45 1.72 120.59 342.4 0.09 0.02 0

3.04 46.89 10.73 1.96 6.58 0.17 13.69 1.34 0.56 11.57 10.1 8.82 11.97 0.39 0.62 2.38 139.62 387.72 0.07 0.1 0

3.37 50.43 13.48 2.46 7.29 0.35 17.1 1.8 0.69 13.03 11.3 11.04 13.29 0.57 0.69 3.26 160.14 432.06 0.08 0.06 0

4.23 54.82 17.52 3.06 9.95 0.47 20.19 2.24 0.78 14.18 12.3 13.19 15.53 0.8 0.8 4.01 184.88 481.55 0.14 0.04 0

4.65 59.87 21.85 3.94 11.5 0.97 25.7 2.85 1.09 15.69 13.68 17.1 18.09 1.32 0.99 5.41 216.68 543.25 0.12 0.13 0

5.23 66.49 29.07 4.99 15.55 2.37 33.82 3.92 1.42 18.02 15.56 22.29 21.96 2.37 1.24 7.29 264.66 630.4 0.15 0.22 0

6.17 76.3 44.53 7.54 25.77 5.23 44.67 5.72 2.01 21.01 18.41 34.84 31.75 3.65 1.65 12.93 357.09 775 0.28 0.4 0

7.89 90.9 63.39 10.61 35.87 12.07 66.05 9.17 2.78 25.45 22.6 55.8 47.57 7.53 2.51 26.18 501.93 999.94 0.28 1.5 0

16.07 114.58 136.43 20.43 87.24 169.57 109.65 20.2 4.58 33.6 30.13 121.07 99.06 28.56 5.84 282.27 1297.45 1956.57 0.33 21.44 0

4.52 56.84 25.33 4.24 14.9 10.03 26.93 3.46 1.13 14.96 13.02 21.03 21.18 2.77 1.12 19.23 251.19 558.78 0.14 1.24 0

19.83 2.18 2.93 1.18 4.59 225.11

23.44 2.68 4.55 2.17 5.84 284.36

25.44 3.08 5.42 2.02 6.85 328

28.84 3.59 7.24 4.15 7.42 376.93

32 4.29 8.74 4.12 10.17 425.24

34.33 4.73 10.17 4.54 10.64 469.66

37.06 5.33 12.76 5.76 13.31 520.78

40.42 6.13 14.93 8.22 16.64 585.92

44.55 7.19 19.6 9.89 20.1 672.44

51.95 8.74 30.26 15.1 29.49 814.44

63.75 11.18 43.01 22.28 54.21 1046

85.41 15.15 93.36 55.21 141.91 1651.65

39.05 5.86 18.06 9.41 21.74 579.17

Note : * : included in total expenditure. ** : not included in total expenditure. Source : National Sample Survey Organization.

150 Estimating cost to government

XLRI Jamshedpur

18.4 Percentage distribution of responses to survey
Percentage distribution in the general category
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 Statement I like my present job very much I am overall very satisfied with my job Many of our rules & procedures make doing a good job difficult The present job gives me enough opportunities to utilize my talents The HRA I am entitled to is inadequate to meet my accommodation expenditure I feel I am being paid a fair amount of work I do I am not satisfied with the benefits I receive I should be given the option to decide on the pay mix at the beginning of every year I feel un-appreciated by the organization when I think about what they pay me The amount of pay I currently receive is comparable to what I think it should be There is a pressing need to review and rationalize the pay structure to improve employee efficiency The pride I derive by being a government servant is very important to me My job as a government servant provides me with adequate time and opportunity to pursue my other interests I do not mind the relatively less salary in Government Service as the joy of serving the nation is a reward in itself Though I am entitled, I do not have government accommodation The pay structure presently prevailing in government (pay + allowances + nonmonetary & retirement benefits) ensures employee satisfaction The society looks down upon the government servants Don't Know 0.32 0.82 2.07 1.25 1.65 0.78 0.89 12.58 5.08 1.92 1.2 1.74 0.67 Agree 89.05 68.47 77.09 47.9 77.85 46.45 67.06 55.87 62.97 29.16 95.21 83.4 46.94 Disagree 10.63 30.71 20.84 50.86 20.5 52.77 32.06 31.56 31.96 68.93 3.59 14.87 52.4

14 15

1.45 4.57

54.23 56.48

44.32 38.95

16

1.51

36.81

61.68

17

3.65

46.41

49.95

151 Estimating cost to government

XLRI Jamshedpur
18 19 20 21 22 23 24 Government granted accommodation is a 1.85 great benefit Being a Government Servant saves me from 3.67 compromising on my values and ethics Almost everyone in the government sector 6.63 avails his/her LTA facility The joy of associating with the government is a significant non-monetary benefit to me Hardly anyone gets government quarters, though they are entitled I am satisfied that, a government servant, I enjoy excellent leave benefits and holidays The pride of being a government servant is more important than the pay and monetary benefits I feel that various department/services in Government have too many allowance and benefits of sundry nature, which call for standardization By being a government employee I am serving the country I am happy working with the government sector as it gives me a secure job. The pay structure presently prevailing in government (pay + allowances + nonmonetary & retirement benefits) is not conductive to efficiently The pay structure presently prevailing in government (pay + allowances +nonmonetary & retirement benefits) ensures efficiency Those who do well on the job stand a fair chance of being promoted in my organisation The Annual Performance Evaluation practiced in our organization help employees in their developmental plans There are no rewards for those who work here When I do a good job, I receive the recognition for it that I should receive My organisation encourages employees to plan for their career growth 6.44 3.31 0.62 1.69 77.58 74.79 59.31 56.15 58.91 60.82 45.28 20.58 21.54 34.06 37.41 37.78 38.57 53.04

25

12.57

58.11

29.32

26 27

0.94 0.62

90.06 85.67

9 13.72

28

3.93

65.48

30.6

29

2.58

37.61

59.82

30

1.37

35.05

63.59

31 32 33 34 35

5.71 2.66 1.47 1.95

45.32 60.07 51.32 38.92 76.58

48.97 37.27 47.21 59.13 22.48

There is too little chance for promotion on 0.94 my job

152 Estimating cost to government

XLRI Jamshedpur
36 37 The opportunity for career growth is 1.27 adequate in my organization I don't feel my efforts are rewarded the way 3.49 they should be Even if my job is not as high paying as a private sector job, it is the job security that 0.61 make me continue here A secure job is more important to me than a 0.44 high paying job It is necessary to reduce the minimum qualifying service to 5 years, for entitlement 5.62 of pension -with a proportionate reduction in the pension amount I feel that, taking all the benefits and pay together, the pay package in Government 1.88 Service is comparable to the private sector The pride of association with the government does offset the lower pay 6 (compared to the private sector) to some extent By giving more cash to the employees, government can do away with the pension 3.27 plan & let employees plan their pension Looking at the monetary aspects alone, I feel that the pay is less in Government service compared to the private sector Government should let employees plan their own pension so that they can exit at their will If one puts the non-monetary along with monetary benefits of pay, it more than equals the pay in the private sector 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 Longer service in government sector makes one less attractive to private sector recruiters The 20 years mandatory service forces employees to spend that many years in service with the sole objective of getting pension 0.86 32.72 66.8 66.01 29.72

38

84.74

14.65

39

72.9

26.66

40

56.5

37.88

41

26.16

71.96

42

59.11

34.89

43

43.31

53.42

44

91.64

7.5

45

4.57

52.79

42.64

46

7.89

22.22

69.89

47

3.87

43.77

52.36

48

14.21

58.04

27.75

49

3.26

79.48

17.27

153 Estimating cost to government

XLRI Jamshedpur
50 Private sector recruiters have an aversion to 19.92 recruit from government sector With my qualifications, finding and attractive job in private sector will not be 8.11 difficult A reduction in the minimum qualifying service for pension will go a long way in 6.31 evolving a flexible exit policy for the government servants With my experience, finding an attractive 8.84 jon in private sector will not be difficult 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 Medical benefits and allowances in government sector is more attractive than in the private sector I would prefer if the government gives me equivalent cash instead of giving me various benefits I feel that all the benefits currently being given should be converted into cash and paid as part of pay Employees should be allowed to choose the extent of cash component as against the non-monetary benefits I feel that the government servants enjoy more paid leave than necessary 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 The quantum of various types of leave can be curtailed by compensating with cash 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 I fell that the cash component in the pay packet should be must more than turn nonmonetary benefits Pay the government sector should have more focus on cash aspects than retirement benefits as employees can allocate their resources wisely The leave travel allowance is one of the most attractive benefits we are entitled to 51.23 28.85

51

64.01

27.88

52

76.75

16.95

53

62.13

29.03

54

3.33

45.11

51.56

55

3.86

33.45

62.69

56

6.66

66.58

26.76

57

3.97

52.55

43.48

58 59

5.79 2.32

76.04 31.06

18.17 66.63

60

5.56

68.09

26.36

61

1.69

69.58

28.73

62

3.01

46.47

50.52

63

5.42

77.37

17.22

64

2.54

56.43

41.04

65

4.25

51.22

44.53

154 Estimating cost to government

XLRI Jamshedpur
66 67 Medical benefits in any organisation is inadequate to meet the needs of the 0.83 employees The medical benefits and allowances are 2.16 certainly attractive in my organisation 64.69 39.19 34.48 58.65

155 Estimating cost to government

XLRI Jamshedpur

Annexe 2: Percentage Distribution of CPMF Data

1 2 3 4 5 6 7 8 9 10

11

12

13

14

15

I like my present job very much 29.77 I am overall very satisfied with my 11.68 job I some times feel my job is 3.13 meaningless Many of our rules & procedures 21.37 make doing a good job difficult The job is pretty interesting to fully 14.96 engage myself in. The present job gives me enough 7.98 opportunities to utilize my talents As a CPMF employee I hardly get any benefits from the government’s 28.21 HRA policy I am not satisfied with the benefits I 22.65 receive I feel I am being paid a fair amount 9.13 for the work I do I feel un-appreciated by the organization when I think about what 14.39 they pay me I should be given the option to decide on the pay mix[1] at the beginning of 18.09 every year. The amount of pay I currently receive is comparable to what I think 4.84 it should be. The HRA I am entitled to is inadequate to meet my 33.19 accommodation expenditure The leave travel allowance is one of the most attractive benefits we are 8.83 entitled to There is a pressing need to review and rationalize the pay structure to 45.73 improve employee efficacy

41.88 17.52 35.33 24.36 9.54 5.98 39.03 18.38 35.75 14.81 26.21 15.10 35.61 11.97 33.48 16.24 22.25 16.12 30.63 21.23

3.70

2.14 3.70 1.28 89.17 9.54

12.54 7.69 5.13 3.28 71.37 25.36 4.84 9.69 8.12 65.67 2.71 18.66 78.63 4.13 4.42 2.99 78.77 18.23

11.82 8.69 8.83 5.13 65.53 29.34 16.24 10.83 20.23 3.42 49.29 47.29 7.41 9.40 7.69 6.70 2.42 75.78 21.79 5.98 10.54 1.71 72.36 25.93

18.54 8.84 22.25 2.85 47.50 49.64 10.97 7.41 9.40 5.98 66.24 27.78

34.90 11.40

6.55

3.85 13.25 11.97 64.39 23.65

13.53 12.11

20.09 15.24 30.20 3.99 30.48 65.53

28.35 6.98

7.55

5.84 14.10 3.99 68.52 27.49

28.21 16.10

13.68 15.24 15.81 2.14 53.13 44.73

39.03 7.12

3.13

0.71 1.28 2.99 91.88 5.13

156 Estimating cost to government

Total Agree

No. Statement MD DK SA SA SD SD A

Total Disagree

XLRI Jamshedpur

16 17 18 19 20 21

22

23

24

25

26

27

28

29

Almost everyone in the government 16.38 sector uses his/her LTA facility Being a Government Servant saves me from compromising on my values 18.66 and ethics By being a government employee I 44.73 am serving the country Government granted accommodation 31.05 is a great benefit Hardly anyone gets government 18.09 quarters, though they are entitled I am happy working with the government sector as it gives me a 26.07 secure job. I am satisfied that, as a government servant, I enjoy excellent leave 10.68 benefits and holidays I do not mind the relatively less salary in Government Service as the 14.98 joy of serving the nation is a reward in itself I enjoy the full benefits of the 12.82 government granted accommodation I feel that various departments/services in Government have too many allowances and 21.65 benefits of sundry nature, which call for standardization My job as a government servant provides me with adequate time and 6.55 opportunity to pursue my other interests The government adequately compensates me for the hardship I 7.56 undergo due to my postings in difficult areas The government compensates me adequately for the separation from 5.27 the family The joy of associating with the government is a significant non- 8.40 monetary benefit to me

40.60 14.96 41.17 16.38 36.18 5.70 37.04 12.82 34.76 15.81 45.01 17.24

12.39 2.28 5.84 7.55 71.94 20.51 6.27 6.55 5.13 3.99 6.27 7.26 76.21 16.52 1.71 4.27 0.85 86.61 12.54 3.56 9.54 0.85 80.91 18.23

14.39 6.84 6.98 3.13 68.66 28.21 5.56 2.14 2.85 1.14 88.32 10.54

21.37 16.67

18.23 7.98 23.65 1.42 48.72 49.86

33.95 17.83

13.69 5.56 11.70 2.28 66.76 30.96

30.34 22.22

13.68 6.27 13.11 1.57 65.38 33.05

36.18 12.39

6.55

4.42 9.54 9.26 70.23 20.51

13.68 11.97

12.96 13.82 38.89 2.14 32.19 65.67

20.26 11.41

9.99

11.98 36.52 2.28 39.23 58.49

14.81 10.11

10.83 10.11 44.59 4.27 30.20 65.53

29.34 20.94

13.39 4.99 10.83 12.11 58.69 29.20

157 Estimating cost to government

XLRI Jamshedpur

30

31

32

33

34

35 36 37 38 39

40

41 42 43 44

The pay structure presently prevailing in government (pay + allowances + non-monetary & 5.84 retirement benefits) ensures efficiency The pay structure presently prevailing in government (pay + allowances + non-monetary & 8.26 retirement benefits) ensures employee satisfaction The pay structure presently prevailing in the Government (pay + allowances + non-monetary & 14.39 retirement benefits) is not conducive to efficiency The pay structure presently prevailing in the Government (pay + allowances + non-monetary & 20.37 retirement benefits) is not conducive to employee satisfaction The pride I derive by being a government servant is very 16.95 important to me The pride of being a government servant is more important than the 10.26 pay and monetary benefits The society looks down upon the 9.26 government servants Though I am entitled, I do not have 12.39 government accommodation I don't feel my efforts are rewarded 16.24 the way they should be My organization encourages employees to plan for their career 7.98 growth The Annual Performance Evaluation practiced in our organization help 5.98 employees in their developmental plans The opportunity for career growth is 5.13 adequate in my organization There are no rewards for those who 14.81 work here There is too little chance for 51.00 promotion on my job Those who do well on the job stand a 9.12 fair chance of being promoted

17.38 20.66

13.82 10.40 27.35 4.56 43.87 51.57

14.39 18.95

17.24 10.68 28.06 2.42 41.60 55.98

42.31 13.53

10.54 5.41 9.26 4.56 70.23 25.21

36.89 13.25

11.82 4.13 8.55 4.99 70.51 24.50

44.87 18.38

6.84

3.85 3.99 5.13 80.20 14.67

28.63 19.37 25.50 14.96 22.93 16.38 36.61 17.81 24.22 14.39

12.96 9.97 14.96 3.85 58.26 37.89 12.25 9.69 24.07 4.27 49.72 46.01 10.83 11.82 19.80 5.84 51.71 42.45 10.68 5.84 7.69 5.13 70.66 24.22 12.54 10.83 27.64 2.42 46.58 51.00

31.34 15.53

9.69

9.69 22.36 5.41 52.85 41.74

18.09 11.68 23.22 17.81 25.78 8.83 17.09 11.68

10.68 8.97 42.45 2.99 34.90 62.11 16.52 10.68 11.54 5.41 55.84 38.75 4.99 2.14 4.56 2.71 85.61 11.68

12.54 11.40 33.76 4.42 37.89 57.69

158 Estimating cost to government

XLRI Jamshedpur

45 46 47

48

49

50

51

52

53

54

55

56

57

When I do a good job, I receive the recognition for it that I should 11.68 receive A secure job is more important to me 22.08 than a high paying job Even if my job is not as high paying as a private sector job, it is the job 24.64 security that makes me continue here A reduction in the minimum qualifying service for pension will go a long way in evolving a more 26.78 flexible exit policy for the government servants By giving more cash to the employees government can do away 20.66 with a pension plan and let employees plan their pension Government should let employees plan their own pension so that they 20.94 can exit at their will I feel that, taking all the benefits and pay together, the pay package in 12.82 Government Service is comparable to the private sector If one puts the non-monetary along with monetary benefits of pay, it 4.99 more than equals the pay in the private sector It is necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension - 20.83 with a proportionate reduction in the pension amount Keeping in mind the intangible benefits such as status, position, power, that we as government 14.25 servants enjoy, we are better off than comparable employees of private sector. Longer service in government sector is seen as a liability by private sector 9.69 recruiters Looking at the monetary aspects alone, I feel that the pay is less in 42.23 Government service compared to the private sector It is not difficult for me to land a better paying job in the private sector 13.98 if I so desire.

32.34 17.24 35.19 12.96 42.02 16.67

11.11 7.69 15.38 4.56 61.25 34.19 11.40 4.84 13.11 0.43 70.23 29.34 4.70 3.70 7.12 1.14 83.33 15.53

41.74 9.54

6.13

5.84 5.27 4.70 78.06 17.24

24.79 9.83

8.83

7.41 23.65 4.84 55.27 39.89

33.76 10.11

6.41

6.84 18.09 3.85 64.81 31.34

17.24 9.69

16.67 15.38 25.36 2.85 39.74 57.41

17.09 11.54

12.68 11.82 32.62 9.26 33.62 57.12

31.95 10.13

7.56

7.99 16.98 4.56 62.91 32.52

37.04 16.67

10.97 6.27 10.97 3.85 67.95 28.21

34.05 17.52

10.11 6.55 6.27 15.81 61.25 22.93

39.66 7.85

3.57

2.14 2.43 2.14 89.73 8.13

33.38 17.40

15.55 5.42 8.27 5.99 64.76 29.24

159 Estimating cost to government

XLRI Jamshedpur
58 Private sector recruiters have an aversion to recruit from government 8.12 sector The 20 years mandatory service forces employees to spend that many 23.93 years in service with the sole objective of getting pension A 10.00 AM to 5.00PM job is an important reason why I continue in 8.13 the government service, rather than opting for a private sector job It is not difficult for me to find a more challenging job in the private 12.68 sector. The pride of association with the government does offset the lower pay 13.96 (compared to the private sector) to some extent With my qualifications, finding an attractive job in private sector will 11.54 not be difficult. The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e., 8.55 EL, CL & SL, as compared to the private sector With my experience, finding an attractive job in private sector will 12.96 not be difficult. I would prefer if the government gives me equivalent cash instead of 26.39 giving me various benefits Pay in the government sector should have more focus on cash aspects than 18.09 retirement benefits as employees can allocate their resources wisely Employees should be allowed to choose the extent of cash component 29.20 as against the non-monetary benefits I am separated from my family for most part of the year and there is no 34.90 compensating factor for this separation I feel that all the benefits currently being given should be converted into 27.49 cash and paid as part of pay 28.49 17.38 16.95 6.13 8.69 14.25 53.99 31.77

59

48.01 14.25

3.42

3.28 4.13 2.99 86.18 10.83

60

20.68 10.41

13.55 14.12 25.25 7.85 39.23 52.92

61

33.62 18.38

13.25 6.27 9.54 6.27 64.67 29.06

62

27.78 21.51

11.54 4.84 8.83 11.54 63.25 25.21

63

30.06 24.36

14.81 5.84 6.55 6.84 65.95 27.21

64

26.64 22.79

14.96 6.41 14.39 6.27 57.98 35.75

65

38.03 21.94

9.40

5.13 6.84 5.70 72.93 21.37

66

33.24 17.40

7.70

4.42 8.84 2.00 77.03 20.97

67

35.90 15.81

10.26 5.98 10.40 3.56 69.80 26.64

68

41.45 10.26

6.55

3.28 3.28 5.98 80.91 13.11

69

34.19 11.40

5.70

5.27 6.70 1.85 80.48 17.66

70

32.76 11.11

10.26 6.70 8.26 3.42 71.37 25.21

160 Estimating cost to government

XLRI Jamshedpur

71

72

73 74

75

76

77

78

79

I feel that Pay in the government should focus more on cash aspects, 22.51 and leave the retirement benefits planning to the individual employees I feel that Pay in the government should focus more on cash aspects, and less on retirement benefits, 18.52 because employees can plan and fund their own retirement benefits I feel that the cash component in the pay packet should be much more 26.35 than the non-monetary benefits I feel that the government servants 7.55 enjoy more paid leave than necessary I think the cash component of the pay in the government sector is too low compared to the non-monetary 14.67 benefits that the government employees get The quantum of various types of leave can be curtailed by 18.09 compensating with cash Medical benefits in my organization is inadequate to meet the needs of the 18.95 employees Medical benefits and allowances in government sector is more attractive 5.56 than in the private sector The medical benefits and allowances are certainly attractive in my 6.70 organization

30.20 13.11

6.98

6.98 16.38 3.85 65.81 30.34

26.35 14.10

12.11 6.70 17.38 4.84 58.97 36.18

36.75 11.82 16.10 12.25

8.69

4.42 5.70 6.27 74.93 18.80

15.81 14.39 29.77 4.13 35.90 59.97

37.32 17.95

13.11 6.13 6.41 4.42 69.94 25.64

29.77 15.24

10.68 3.13 18.95 4.13 63.11 32.76

35.04 14.10

11.40 7.12 11.11 2.28 68.09 29.63

19.23 12.54

15.95 11.40 29.77 5.56 37.32 57.12

21.97 17.12

12.41 13.12 23.97 4.71 45.79 49.50

161 Estimating cost to government

XLRI Jamshedpur

Annexe -3 Percentage Distribution of Defence Data
Total Disagree Statement MD DK No. Total Agree

SA

SA

SD

1 2 3 4 5 6 7 8

I like my present job very much

14.66

37.70 26.70 9.69 6.81 4.45 0.00 79.06 20.94 14.36 12.79 10.97 11.75 30.29 13.05 33.94 53.00 17.94 30.87 17.15 16.36 12.93 0.00 53.56 46.44 23.59 9.92 5.90 8.04 11.80 11.26 63.00 25.74 5.79 10.26 12.11 7.89 58.95 1.05 20.00 78.95 26.91 24.80 17.68 6.86 12.40 2.11 60.95 36.94 31.66 23.22 9.76 3.96 3.17 4.75 78.36 16.89 15.75 19.95 20.73 16.01 23.36 1.05 38.85 60.10

I would prefer that my son/daughter 6.79 joins the armed forces I am overall very satisfied with my 4.75 job I am separated from my family for most part of the year due to the 29.49 nature of my job I feel my job is meaningless 3.95 My job is pretty interesting to full 9.23 engage myself in. Many of our rules & procedures 23.48 make doing a good job difficult The present job gives me enough 3.15 opportunities to utilize my talents An employee of the armed forces saves a considerable amount of 6.77 money by availing of the canteen services Armed forces are in receipt of a number of travel concessions that 6.86 serve their needs The rations that I receive as an armed force employee is a substantial 2.65 benefit to me The pay package compensates for my absence from my family for most 2.91 part of work life The HRA I am entitled to is inadequate to meet my 47.91 accommodation expenditure The hardship allowance I receive when posted in difficult areas serves 5.93 its purpose I feel I am being paid a fair amount 2.91 of work I do There are no rewards for those who 29.02 work here I am not satisfied with the benefits I 31.32

9

16.67 21.35 10.16 12.50 23.44 9.11 44.79 46.09

10

17.15 13.72 10.55 12.14 19.53 20.05 37.73 42.22

11

9.52 19.05 11.38 11.90 16.67 28.84 31.22 39.95

12

6.08 8.20 7.94 10.32 47.35 17.20 17.20 65.61

13

20.68 7.59 4.97 5.24 12.04 1.57 76.18 22.25

14 15 16 17

9.43 10.78 5.39 13.21 35.04 20.22 26.15 53.64 8.73 11.11 12.17 23.81 41.01 0.26 22.75 76.98 22.69 12.66 12.66 11.87 8.44 2.64 64.38 32.98 30.26 17.63 8.68 6.84 3.95 1.32 79.21 19.47

162 Estimating cost to government

SD

A

XLRI Jamshedpur receive I should be given the option to decide on the pay mix at the beginning of 18.73 every year Armed forces canteen services is a very significant benefit provided by 9.21 the government I feel un-appreciated by the organisation when I think about what 22.43 they pay me The leave travel allowance is one of the most attractive benefits we are 6.30 entitled to The amount of pay I currently receive is comparable to what I think 1.32 it should be There is a pressing need to review and rationalize the pay structure to 68.60 improve employee efficiency Armed forces are beneficiaries of a number of allowances that civilian 15.67 employees do not receive The pride I derive by being a government servant is very 26.51 important to me My job as a government servant provides me with adequate time and 7.55 opportunity to pursue my other interests I do not mind the relatively less salary in Government Service as the 4.70 joy of serving the nation is a reward in itself Though I am entitled, I do not have 26.72 government accommodation The pay structure presently prevailing in government (pay+allowances+non-monetary & 4.69 retirement benefits) ensures employee satisfaction The society looks down upon the 13.54 government servants Government granted accommodation 26.11 is a great benefit Being a Government Servant saves me from compromising on my values 13.10 and ethics Almost everyone in the government 7.11 sector avails his/her LTA facility

18

33.77 14.78 9.23 3.96 7.39 12.14 67.28 20.58

19

29.47 20.00 9.47 7.63 18.68 5.53 58.68 35.79

20

29.29 23.75 8.18 4.75 4.49 7.12 75.46 17.41

21

19.69 19.95 16.80 16.01 19.95 1.31 45.93 52.76

22

3.44 9.26 17.46 21.96 44.97 1.59 14.02 84.39

23

23.48 4.49 1.32 0.53 0.79 0.79 96.57 2.64

24

19.06 12.27 9.92 9.14 23.50 10.44 47.00 42.56

25

40.68 13.12 7.09 4.99 7.35 0.26 80.31 19.42

26

16.41 20.05 16.93 14.32 24.74 0.00 44.01 55.99

27

13.84 19.06 12.79 13.84 34.99 0.78 37.60 61.62

28

34.13 10.85 6.61 6.08 10.32 5.29 71.69 23.02

29

5.21 12.24 16.93 19.53 40.89 0.52 22.14 77.34

30 31 32 33

24.22 20.05 11.98 11.46 15.10 3.65 57.81 38.54 35.25 15.14 5.22 5.22 8.09 4.96 76.50 18.54 30.48 15.78 13.10 6.95 15.24 5.35 59.36 35.29 25.79 18.16 15.53 9.74 14.74 8.95 51.05 40.00

163 Estimating cost to government

XLRI Jamshedpur

34 35 36 37

38

39

40

41

42 43

44

45

46

47

I feel that the government servants 6.61 enjoy more paid leave than necessary The joy of associating with the government is a significant non- 2.63 monetary benefit to me Hardly anyone gets government 19.21 quarters, though they are entitled I am satisfied that, a government servant, I enjoy excellent leave 10.32 benefits and holidays The pride of being a government servant is more important than the 2.39 pay and monetary benefits I feel that various department/services in Government have too many allowance and 16.14 benefits of sundry nature, which call for standardization The pay structure presently prevailing in government (pay + allowances + non-monetary & 32.63 retirement benefits) ensures employee satisfaction The pay structure presently prevailing in government (pay + allowances + non-monetary & 29.52 retirement benefits) is not conductive to efficiently By being a government employee I 27.44 am serving the country I am happy working with the government sector as it gives me a 15.83 secure job. The pay structure presently prevailing in government (pay + allowances +non-monetary & 2.90 retirement benefits) ensures efficiency Those who do well on the job stand a fair chance of being promoted in my 8.85 organisation The Annual Performance Evaluation practiced in our organization help 4.21 employees in their developmental plans When I do a good job, I receive the recognition for it that I should 4.74 receive

12.96 15.08 13.23 13.49 36.24 2.38 34.66 62.96 15.53 26.84 16.32 9.74 21.58 7.37 45.00 47.63 26.84 22.37 13.16 7.63 5.00 5.79 68.42 25.79 26.98 20.90 10.32 7.67 23.28 0.53 58.20 41.27

11.94 18.83 16.98 13.26 35.28 1.33 33.16 65.52

22.49 17.20 8.20 5.82 9.79 20.37 55.82 23.81

35.00 15.26 7.63 3.16 3.42 2.89 82.89 14.21

34.84 17.29 7.45 3.72 4.26 2.93 81.65 15.43

40.37 18.73 3.43 1.85 5.80 2.37 86.54 11.08 31.93 29.82 7.12 7.65 6.33 1.32 77.57 21.11

8.71 16.09 22.43 15.57 32.19 2.11 27.70 70.18

19.01 13.28 10.16 11.72 36.46 0.52 41.15 58.33

17.37 17.11 13.95 8.16 28.68 10.53 38.68 50.79

21.84 19.21 17.37 13.16 22.89 0.79 45.79 53.42

164 Estimating cost to government

XLRI Jamshedpur
48 49 50 51 52 53 My organisation encourages employees to plan for their career 3.45 growth There is too little chance for 34.04 promotion on my job The opportunity for career growth is 3.67 adequate in my organization I don't feel my efforts are rewarded 21.26 the way they should be Even if my job is not as high paying as a private sector job, it is the job 14.36 security that make me continue here A secure job is more important to me 7.39 than a high paying job It is necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension - 23.62 with a proportionate reduction in the pension amount I feel that, taking all the benefits and pay together, the pay package in 4.42 Government Service is comparable to the private sector The pride of association with the government does offset the lower pay 7.41 (compared to the private sector) to some extent By giving more cash to the employees, government can do away 12.34 with the pension plan & let employees plan their pension Looking at the monetary aspects alone, I feel that the pay is less in 64.66 Government service compared to the private sector Government should let employees plan their own pension so that they 24.15 can exit at their will If one puts the non-monetary along with monetary benefits of pay, it 3.71 more than equals the pay in the private sector A 10.00 AM to 5.00PM job is an important reason why I continue in 6.63 the government service, rather than opting for a private sector job Longer service in government sector makes one less attractive to private 21.28 sector recruiters It is not difficult for me to find a 20.63 more challenging job in the private 9.81 20.42 16.98 11.14 36.07 2.12 33.69 64.19 27.44 13.19 10.55 6.60 7.12 1.06 74.67 24.27 13.65 12.86 16.80 16.54 35.43 1.05 30.18 68.77 31.50 20.21 11.55 8.14 3.94 3.41 72.97 23.62 36.55 25.07 8.88 6.01 7.83 1.31 75.98 22.72 24.80 30.08 9.76 12.93 13.72 1.32 62.27 36.41

54

22.83 10.76 6.30 5.77 21.00 9.71 57.22 33.07

55

3.64 5.19 10.13 13.77 58.70 4.16 13.25 82.60

56

14.55 14.29 15.08 14.55 30.95 3.17 36.24 60.58

57

16.80 13.65 8.14 7.87 38.32 2.89 42.78 54.33

58

27.23 2.88 2.36 0.79 1.31 0.79 94.76 4.45

59

21.52 9.97 8.14 6.56 24.67 4.99 55.64 39.37

60

4.77 4.24 10.61 13.00 56.76 6.90 12.73 80.37

61

17.77 14.06 9.81 10.88 36.07 4.77 38.46 56.76

62 63

22.61 15.43 13.03 9.84 11.44 6.38 59.31 34.31 30.95 17.46 8.47 6.35 10.58 5.56 69.05 25.40

165 Estimating cost to government

XLRI Jamshedpur sector. The 20 years mandatory service forces employees to spend that many 26.39 years in service with the sole objective of getting pension It is not difficult for me to find a more challenging job in the private 19.47 sector. Private sector recruiters have an aversion to recruit from government 7.71 sector With my qualifications, finding and attractive job in private sector will 22.11 not be difficult The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e. 4.46 EL, CL & SL, as compared to the private sector A reduction in the minimum qualifying service for pension will go 22.61 a long way in evolving a flexible exit policy for the government servants With my experience, finding an attractive job in private sector will 19.53 not be difficult Keeping in mind the intangible benefits such as status, position, power, that we as government 1.83 servants enjoy, we are better off than comparable employees of private sector. I would prefer if the government gives me equivalent cash instead of 27.39 giving me various benefits I feel that all the benefits currently being given should be converted into 30.79 cash and paid as part of pay Employees should be allowed to choose the extent of cash component 21.81 as against the non-monetary benefits I think the cash component of the pay in the government sector is too low compared to the non-monetary 17.15 benefits that the government employees get The government should increase cash component instead of giving us the 28.84 canteen benefit

64

31.13 20.32 5.80 2.11 6.33 7.92 77.84 14.25

65

35.00 18.42 8.68 4.74 8.16 5.53 72.89 21.58

66

28.19 19.41 8.78 7.71 5.85 22.34 55.32 22.34

67

33.68 21.05 8.68 4.21 3.95 6.32 76.84 16.84

68

12.07 15.75 13.91 17.85 33.07 2.89 32.28 64.83

69

36.44 18.35 4.26 2.66 4.52 11.17 77.39 11.44

70

33.07 16.67 11.98 5.73 5.47 7.55 69.27 23.18

71

12.79 18.28 15.14 16.45 33.16 2.35 32.90 64.75

72

17.29 6.65 7.18 4.52 14.89 22.07 51.33 26.60

73

21.05 11.05 7.89 6.05 15.00 8.16 62.89 28.95

74

32.98 17.82 6.38 5.32 5.59 10.11 72.61 17.29

75

35.88 16.09 10.82 5.80 5.28 8.97 69.13 21.90

76

19.58 6.88 7.67 11.11 16.14 9.79 55.29 34.92

166 Estimating cost to government

XLRI Jamshedpur
77 The quantum of various types of leave can be curtailed by 25.13 compensating with cash I feel that Pay in the government should focus more on cash aspects and less on retirement, benefits 14.47 because employees can plan and fund their own retirement benefits I feel that Pay in the government should focus more on cash aspects and less on retirement, benefits 18.42 because employees can plan and fund their own retirement benefits I fell that the cash component in the pay packet should be must more than 31.66 turn non-monetary benefits Pay the government sector should have more focus on cash aspects than 14.96 retirement benefits as employees can allocate their resources wisely I would prefer if the government gives me equivalent cash instead of 23.36 giving me various benefits Medical benefits in any organisation is inadequate to meet the needs of the 21.41 employees Medical benefits and allowances in government sector is more attractive 6.81 than in the private sector The medical benefits and allowances are certainly attractive in my 5.73 organisation 26.98 15.61 8.73 4.50 16.93 2.12 67.72 30.16

78

23.42 15.53 10.00 12.11 21.58 2.89 53.42 43.68

79

21.05 16.58 10.79 11.05 20.00 2.11 56.05 41.84

80

34.04 17.15 3.96 2.37 3.69 7.12 82.85 10.03

81

24.15 16.80 12.07 9.71 19.16 3.15 55.91 40.94

82

30.18 16.27 8.40 7.87 10.50 3.41 69.82 26.77

83

18.54 15.14 15.93 14.62 13.84 0.52 55.09 44.39

84

17.28 14.66 16.49 13.09 27.49 4.19 38.74 57.07

85

10.94 23.44 15.89 16.93 24.74 2.34 40.10 57.55

167 Estimating cost to government

XLRI Jamshedpur Annexe 4: Percentage Distribution of Railways

1 2 3 4 5 6 7 8 9 10 11 12

13 14 15 16

17

18

I like my present job very much 46.55 I am overall very satisfied with my 21.43 job I feel my job is meaningless 1.79 Many of our rules & procedures 21.82 make doing a good job difficult The job is pretty interesting to fully 12.07 engage myself in. The present job gives me enough 5.26 opportunities to utilize my talents I am not satisfied with the benefits I 18.97 receive I feel I am being paid a fair amount 15.79 for the work I do I feel that employees use the railway passes facility at the most 8.77 50% pf their entitlement I feel that railway passes given to 25.86 us is a significant benefit I feel that the railway passes that 7.02 we get mostly go unused I feel un-appreciated by the organization when I think about 8.93 what they pay me I should be given the option to decide on the pay mix[1] at the 3.64 beginning of every year. I believe that railways employees 3.57 have too many allowances The allowances available to railway 6.90 employees need rationalization The amount of pay I currently receive is comparable to what I 1.75 think it should be. The HRA I am entitled to is inadequate to meet my 36.21 accommodation expenditure The leave travel allowance is one of the most attractive benefits we are 3.57 entitled to

32.76 13.79 39.29 14.29 0.00 5.36 40.00 16.36 44.83 22.41 31.58 14.04 15.52 12.07 26.32 28.07 45.61 15.79 46.55 12.07 15.79 22.81 21.43 16.07

1.72 3.45 8.93 8.93 1.79 1.79 9.09 3.64 3.45 10.34 24.56 14.04 18.97 10.34 7.02 12.28 12.28 7.02 12.07 3.45 15.79 5.26 26.79 12.50

1.72 0.00 93.10 7.14 0.00 75.00 85.71 3.57 7.14 9.09 0.00 78.18 6.90 0.00 79.31 10.53 0.00 50.88 24.14 0.00 46.55 10.53 0.00 70.18 5.26 5.26 70.18 0.00 0.00 84.48 33.33 0.00 45.61 10.71 3.57 46.43

Agree

No.

Statement MD DK SA SA SD SD A

6.90 25.00 89.29 21.82 20.69 49.12 53.45 29.82 24.56 15.52 54.39 50.00

20.00 9.09 5.36 12.50 51.72 15.52 21.05 17.54

18.18 16.36 12.50 14.29 8.62 3.45 22.81 12.28

23.64 9.09 32.73 51.79 0.00 21.43 6.90 6.90 74.14 24.56 0.00 40.35

58.18 78.57 18.97 59.65

34.48 12.07

3.45 5.17

8.62 0.00 82.76

17.24

23.21 14.29

16.07 7.14

23.21 12.50 41.07

46.43

168 Estimating cost to government

Disagree

XLRI Jamshedpur

19 20 21 22 23 24 25

26

27

28

29

30

31

32

There is a pressing need to review and rationalize the pay structure to 35.09 improve employee efficacy Almost everyone in the government 13.79 sector uses his/her LTA facility Being a Government Servant saves me from compromising on my 17.24 values and ethics By being a government employee I 55.17 am serving the country Government granted 10.34 accommodation is a great benefit Hardly anyone gets government 8.62 quarters, though they are entitled I am happy working with the government sector as it gives me a 41.38 secure job. I am satisfied that, as a government servant, I enjoy excellent leave 13.79 benefits and holidays I do not mind the relatively less salary in Government Service as the 12.07 joy of serving the nation is a reward in itself I feel that the government servants enjoy more paid leave than 6.90 necessary I feel that various departments/services in Government have too many 17.24 allowances and benefits of sundry nature, which call for standardization My job as a government servant provides me with adequate time and 10.71 opportunity to pursue my other interests A 10.00 AM to 5.00PM job is an important reason why I continue in 8.93 the government service, rather than opting for a private sector job The joy of associating with the government is a significant non- 5.26 monetary benefit to me

50.88 10.53 17.24 15.52 46.55 18.97 25.86 13.79 32.76 27.59 13.79 15.52 37.93 10.34

1.75 0.00 13.79 18.97 1.72 1.72 1.72 1.72 5.17 15.52 20.69 20.69 5.17 5.17

1.75 0.00 96.49 13.79 6.90 46.55 13.79 0.00 82.76 1.72 0.00 94.83 8.62 0.00 70.69 18.97 1.72 37.93 0.00 0.00 89.66

3.51 46.55 17.24 5.17 29.31 60.34 10.34

34.48 10.34

17.24 8.62

15.52 0.00 58.62

41.38

25.86 13.79

17.24 15.52

13.79 1.72 51.72

46.55

12.07 10.34

17.24 18.97

32.76 1.72 29.31

68.97

25.86 13.79

3.45 12.07

17.24 10.34 56.90

32.76

28.57 16.07

10.71 12.50

21.43 0.00 55.36

44.64

25.00 7.14

16.07 14.29

26.79 1.79 41.07

57.14

29.82 24.56

21.05 7.02

12.28 0.00 59.65

40.35

169 Estimating cost to government

XLRI Jamshedpur

33

34

35

36

37

38 39 40 41 42

43

44 45 46

The pay structure presently prevailing in government (pay + allowances + non-monetary & 5.17 retirement benefits) ensures efficiency The pay structure presently prevailing in government (pay + allowances + non-monetary & 1.72 retirement benefits) ensures employee satisfaction The pay structure presently prevailing in the Government (pay + allowances + non-monetary & 7.14 retirement benefits) is not conducive to efficiency The pay structure presently prevailing in the Government (pay + allowances + non-monetary & 12.50 retirement benefits) is not conducive to employee satisfaction The pride I derive by being a government servant is very 17.54 important to me The pride of being a government servant is more important than the 7.02 pay and monetary benefits The society looks down upon the 1.79 government servants Though I am entitled, I do not have 1.75 government accommodation I don't feel my efforts are rewarded 21.43 the way they should be My organization encourages employees to plan for their career 3.45 growth The Annual Performance Evaluation practiced in our 5.17 organization help employees in their developmental plans The opportunity for career growth 1.72 is adequate in my organization There are no rewards for those who 12.28 work here There is too little chance for 21.05 promotion on my job

18.97 13.79

17.24 18.97

25.86 0.00 37.93

62.07

25.86 20.69

13.79 24.14

13.79 0.00 48.28

51.72

35.71 8.93

21.43 7.14

16.07 3.57 51.79

44.64

28.57 12.50

21.43 10.71

7.14 7.14 53.57

39.29

45.61 22.81

7.02 3.51

3.51 0.00 85.96

14.04

17.54 19.30 21.43 19.64 28.07 12.28 25.00 17.86 13.79 22.41

19.30 10.53 21.43 17.86 17.54 10.53 17.86 8.93 10.34 20.69

26.32 0.00 43.86 14.29 3.57 42.86 26.32 3.51 42.11 7.14 1.79 64.29 27.59 1.72 39.66

56.14 53.57 54.39 33.93 58.62

15.52 17.24

12.07 10.34

37.93 1.72 37.93

60.34

13.79 12.07 31.58 15.79 28.07 19.30

22.41 20.69 21.05 10.53 12.28 7.02

29.31 0.00 27.59 8.77 0.00 59.65 12.28 0.00 68.42

72.41 40.35 31.58

170 Estimating cost to government

XLRI Jamshedpur

47 48 49

50

51

52

53

54

55

56

57

58

Those who do well on the job stand 3.51 a fair chance of being promoted When I do a good job, I receive the recognition for it that I should 5.17 receive A secure job is more important to 24.14 me than a high paying job Even if my job is not as high paying as a private sector job, it is 31.03 the job security that makes me continue here A reduction in the minimum qualifying service for pension will go a long way in evolving a more 28.57 flexible exit policy for the government servants By giving more cash to the employees government can do 8.77 away with a pension plan and let employees plan their pension Government should let employees plan their own pension so that they 8.62 can exit at their will I feel that, taking all the benefits and pay together, the pay package 5.36 in Government Service is comparable to the private sector If one puts the non-monetary along with monetary benefits of pay, it 1.82 more than equals the pay in the private sector It is necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension - 7.14 with a proportionate reduction in the pension amount The intangible benefits such as status, position, power, that we as government servants enjoy, we are 8.93 better off than comparable employees of private sector. Longer service in government sector is seen as a liability by 7.41 private sector recruiters

10.53 10.53 32.76 15.52 27.59 24.14

28.07 7.02 15.52 12.07 0.00 10.34

40.35 0.00 24.56 18.97 0.00 53.45 13.79 0.00 75.86

75.44 46.55 24.14

41.38 15.52

5.17 5.17

1.72 0.00 87.93

12.07

33.93 14.29

8.93 1.79

8.93 3.57 76.79

19.64

14.04 7.02

5.26 14.04

49.12 1.75 29.82

68.42

18.97 22.41

10.34 3.45

34.48 1.72 50.00

48.28

7.14 14.29

17.86 16.07

39.29 0.00 26.79

73.21

3.64 10.91

18.18 30.91

29.09 5.45 16.36

78.18

30.36 17.86

12.50 14.29

14.29 3.57 55.36

41.07

26.79 10.71

8.93 8.93

35.71 0.00 46.43

53.57

38.89 12.96

16.67 1.85

12.96 9.26 59.26

31.48

171 Estimating cost to government

XLRI Jamshedpur

59

60

61

62

63

64

65

66

67

68

69

70

It is difficult for me to land a better paying job in the private sector if I 7.27 so desire Looking at the monetary aspects alone, I feel that the pay is less in 33.93 Government service compared to the private sector Private sector recruiters have an aversion to recruit from 8.77 government sector The 20 years mandatory service forces employees to spend that 13.79 many years in service with the sole objective of getting pension It is difficult for me to land a better paying job in the private sector if I 10.34 so desire With my qualifications, finding an attractive job in private sector will 8.77 not be difficult The pride of association with the government does offset the lower 7.14 pay (compared to the private sector) to some extent The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e., 3.51 EL, CL & SL, as compared to the private sector With my experience, finding an attractive job in private sector will 7.02 not be difficult Employees should be allowed to choose the extent of cash 17.24 component as against the nonmonetary benefits I feel that all the benefits currently being given should be converted 13.79 into cash and paid as part of pay I feel that Pay in the government should focus more on cash aspects, and leave the retirement benefits 8.62 planning to the individual employees

27.27 18.18

12.73 5.45

20.00 9.09 52.73

38.18

46.43 8.93

1.79 1.79

7.14 0.00 89.29

10.71

17.54 19.30

17.54 8.77

10.53 17.54 45.61

36.84

44.83 18.97

15.52 1.72

5.17 0.00 77.59

22.41

25.86 15.52

15.52 12.07

8.62 12.07 51.72

36.21

26.32 15.79

19.30 14.04

5.26 10.53 50.88

38.60

39.29 26.79

3.57 5.36

14.29 3.57 73.21

23.21

19.30 15.79

12.28 24.56

24.56 0.00 38.60

61.40

21.05 22.81

14.04 12.28

10.53 12.28 50.88

36.84

43.10 12.07

12.07 5.17

6.90 3.45 72.41

24.14

43.10 6.90

12.07 8.62

15.52 0.00 63.79

36.21

15.52 15.52

17.24 5.17

36.21 1.72 39.66

58.62

172 Estimating cost to government

XLRI Jamshedpur

71

72

73

74

75

76

77

78

79

I feel that Pay in the government should focus more on cash aspects, and less on retirement benefits, 8.62 because employees can plan and fund their own retirement benefits I feel that the cash component in the pay packet should be much 22.41 more than the non-monetary benefits I think the cash component of the pay in the government sector is too low compared to the non-monetary 7.27 benefits that the government employees get I would prefer if the government gives me equivalent cash instead of 17.86 giving me various benefits Pay in the government sector should have more focus on cash aspects than retirement benefits as 8.62 employees can allocate their resources wisely The quantum of various types of leave can be curtailed by 15.79 compensating with cash Medical benefits in my organisation is inadequate to meet the needs of 22.81 the employees Medical benefits and allowances in government sector is more 3.57 attractive than in the private sector The medical benefits and allowances are certainly attractive 3.57 in my organization

12.07 17.24

17.24 10.34

32.76 1.72 37.93

60.34

44.83 5.17

10.34 5.17

6.90 5.17 72.41

22.41

38.18 18.18

14.55 7.27

7.27 7.27 63.64

29.09

32.14 17.86

7.14 8.93

16.07 0.00 67.86

32.14

24.14 17.24

12.07 12.07

24.14 1.72 50.00

48.28

36.84 14.04

7.02 7.02

19.30 0.00 66.67

33.33

28.07 15.79

8.77 12.28

12.28 0.00 66.67

33.33

17.86 1.79

28.57 12.50

35.71 0.00 23.21

76.79

10.71 17.86

26.79 17.86

23.21 0.00 32.14

67.86

173 Estimating cost to government

XLRI Jamshedpur Annexe 5: Percentage Distribution of Postal Data
Disagree

1 2 3 4 5 6 7 8 9

I like my present job very much 28.87 I am overall very satisfied with my 17.71 job I feel my job is meaningless 2.07 Many of our rules & procedures 15.54 make doing a good job difficult The job is pretty interesting to fully 18.32 engage myself in. The present job gives me enough 8.76 opportunities to utilize my talents I am not satisfied with the benefits I 21.13 receive I feel I am being paid a fair amount 8.25 for the work I do I feel un-appreciated by the organization when I think about 12.44 what they pay me I should be given the option to decide on the pay mix[1] at the 19.69 beginning of every year. The amount of pay I currently receive is comparable to what I think 7.29 it should be. The HRA I am entitled to is inadequate to meet my 45.08 accommodation expenditure The leave travel allowance is one of the most attractive benefits we are 10.53 entitled to There is a pressing need to review and rationalize the pay structure to 63.92 improve employee efficacy Almost everyone in the government 20.83 sector uses his/her LTA facility Being a Government Servant saves me from compromising on my 23.83 values and ethics By being a government employee I 62.89 am serving the country Government accommodation is a 22.51 great benefit Hardly anyone gets government 8.81 quarters, though they are entitled

49.48 29.17 1.55 36.27 46.07 30.41 35.57 20.10 36.27

16.49 2.58 27.08 16.15 6.74 1.55 21.24 6.22 19.37 8.38 13.40 10.31 13.40 8.76 17.01 15.46 15.03 13.47

2.06 0.52 0.00 94.85 5.15 4.69 5.21 0.00 73.96 26.04 7.25 78.2 2.59 10.36 87.05 4

12.4 7.77 0.52 73.06 26.42 4 4.19 3.66 0.00 83.77 16.23 17.5 19.0 0.52 52.58 46.91 3 7 13.9 6.70 0.52 70.10 29.38 2 15.9 23.2 0.00 45.36 54.64 8 0 8.29 10.8 3.63 63.73 32.64 8 10.8 17.1 59.07 23.83 8 0

10

31.61

7.77 5.18

7.77

11

12.50

11.98 15.63

22.9 27.6 2.08 31.77 66.15 2 0 3.11 5.18 1.04 83.94 15.03 15.2 1.05 64.74 34.21 6

12

31.09

7.77 6.74

13

35.26

18.95 10.53

8.42

14 15 16 17 18 19

30.41 30.21 43.01 25.77 43.46 34.72

1.55 1.55 16.67 10.42 13.99 7.25 3.61 1.03 16.23 6.81 17.10 16.58

0.52 1.03 1.03 95.88 3.09 7.81 10.9 3.13 67.71 29.17 4

4.15 5.70 2.07 80.83 17.10 1.55 4.64 0.52 92.27 7.22 4.19 5.24 1.57 82.20 16.23 8.81 11.4 2.59 60.62 36.79 0

174 Estimating cost to government

Agree

No Statement MD DK SA SA SD SD A

XLRI Jamshedpur
I am happy working with the 20 government sector as it gives me a 33.51 secure job. I am satisfied that, as a government 21 servant, I enjoy excellent leave 18.65 benefits and holidays I do not mind the relatively less salary in Government Service as the 17.53 22 joy of serving the nation is a reward in itself I feel that the government servants 23 enjoy more paid leave than 4.15 necessary I feel that various departments/services in Government 24 have too many allowances and 11.86 benefits of sundry nature, which call for standardization My job as a government servant provides me with adequate time and 25 8.25 opportunity to pursue my other interests The joy of associating with the 26 government is a significant non- 9.42 monetary benefit to me The pay structure presently prevailing in government (pay + 27 allowances + non-monetary & 4.66 retirement benefits) ensures efficiency The pay structure presently prevailing in government (pay + 28 allowances + non-monetary & 3.11 retirement benefits) ensures employee satisfaction The pay structure presently prevailing in the Government (pay + 29 allowances + non-monetary & 13.40 retirement benefits) is not conducive to efficiency The pay structure presently prevailing in the Government (pay + 30 allowances + non-monetary & 15.46 retirement benefits) is not conducive to employee satisfaction The pride I derive by being a 31 government servant is very 19.07 important to me The pride of being a government 32 servant is more important than the 9.38 pay and monetary benefits 38.14 15.46 4.12 2.58 6.19 0.00 87.11 12.89

44.04

15.03 8.29

5.70 7.77 0.52 77.72 21.76

22.16

21.13 9.79

13.4 14.9 1.03 60.82 38.14 0 5 15.0 43.0 1.04 24.35 74.61 3 1

9.84

10.36 16.58

26.29

11.34 10.82

6.19

23.2 10.3 49.48 40.21 0 1

26.29

21.65 11.86

13.9 17.5 0.52 56.19 43.30 2 3 16.7 8.90 6.28 61.26 32.46 5

33.51

18.32 6.81

23.83

12.44 21.24

16.5 17.6 3.63 40.93 55.44 8 2

10.36

21.76 22.28

14.5 24.8 3.11 35.23 61.66 1 7

32.99

11.86 12.37

17.0 7.73 4.64 58.25 37.11 1

30.93

15.46 10.82

14.4 8.25 4.64 61.86 33.51 3

41.75

26.29 4.64

1.55 5.15 1.55 87.11 11.34 14.0 23.9 1.56 45.83 52.60 6 6

19.27

17.19 14.58

175 Estimating cost to government

XLRI Jamshedpur
33 34 35 36 The society looks down upon the 9.33 government servants Though I am entitled, I do not have 8.33 government accommodation I don't feel my efforts are rewarded 14.95 the way they should be My organization encourages employees to plan for their career 2.59 growth The Annual Performance Evaluation practiced in our organization help 5.70 employees in their developmental plans The opportunity for career growth is 4.19 adequate in my organization There are no rewards for those who 23.44 work here There is too little chance for 37.50 promotion on my job Those who do well on the job stand 6.70 a fair chance of being promoted When I do a good job, I receive the recognition for it that I should 6.77 receive A secure job is more important to 35.60 me than a high paying job Even if my job is not as high paying as a private sector job, it is the job 31.09 security that makes me continue here A reduction in the minimum qualifying service for pension will go a long way in evolving a more 19.47 flexible exit policy for the government servants By giving more cash to the employees government can do away 14.43 with a pension plan and let employees plan their pension Government should let employees plan their own pension so that they 10.31 can exit at their will 13.99 40.10 30.93 25.39 11.92 9.33 11.98 6.77 13.40 10.31 7.77 10.36 17.6 2 10.4 2 13.9 2 34.7 3.11 35.23 61.66 2 18.7 3.65 60.42 35.94 5 12.8 3.61 59.28 37.11 9

13.4 38.8 1.55 35.75 62.69 7 6 11.4 20.7 5.18 51.81 43.01 0 3 21.9 27.2 1.05 38.22 60.73 9 3 14.0 7.29 2.60 60.42 36.98 6 7.81 6.25 0.00 77.60 22.40 13.4 39.1 0.52 36.60 62.89 0 8 12.5 30.7 0.52 44.79 54.69 0 3 6.28 7.85 0.00 83.25 16.75

37

36.27

9.84 10.88

38 39 40 41 42 43

17.80 21.88 30.21 17.53 21.88 31.94

16.23 11.52 15.10 15.63 9.90 8.33 12.37 10.31 16.15 11.46 15.71 2.62

44

44.04

16.58 3.11

1.04 4.15 0.00 91.71 8.29

45

44.21

11.05 9.47

1.05 8.95 5.79 74.74 19.47

46

21.13

9.79 6.70

7.22

37.1 3.61 45.36 51.03 1 37.6 7.73 40.72 3

47

20.10

10.31 5.67

8.25

176 Estimating cost to government

XLRI Jamshedpur

48

49

50

51

52

53

54

55

56

57

58

59

60

I feel that, taking all the benefits and pay together, the pay package in 5.70 Government Service is comparable to the private sector If one puts the non-monetary along with monetary benefits of pay, it 4.19 more than equals the pay in the private sector It is necessary to reduce the minimum qualifying service to 5 years, for entitlement of pension - 18.56 with a proportionate reduction in the pension amount The intangible benefits such as status, position, power, that we as government servants enjoy, we are 10.82 better off than comparable employees of private sector. Longer service in government sector is seen as a liability by private sector 6.74 recruiters It is not difficult for me to land a better paying job in the private 10.31 sector if I so desire. Looking at the monetary aspects alone, I feel that the pay is less in 50.52 Government service compared to the private sector Private sector recruiters have an aversion to recruit from government 7.61 sector The 20 years mandatory service forces employees to spend that 15.79 many years in service with the sole objective of getting pension A 10.00 AM to 5.00PM job is an important reason why I continue in 8.95 the government service, rather than opting for a private sector job It is not difficult for me to find a more challenging job in the private 9.38 sector. With my qualifications, finding an attractive job in private sector will 8.76 not be difficult. The pride of association with the government does offset the lower 6.74 pay (compared to the private sector) to some extent

11.40

7.77 13.47

16.0 45.0 0.52 24.87 74.61 6 8

12.04

9.95 18.32

22.5 23.0 9.95 26.18 63.87 1 4

21.65

10.31 9.28

7.73

27.8 4.64 50.52 44.85 4

38.66

20.62 9.28

8.76 7.73 4.12 70.10 25.77

31.61

13.99 3.63

6.74

11.9 25.3 52.33 22.28 2 9

22.68

23.71 12.37

10.3 12.3 56.70 32.99 8.25 1 7

37.63

4.64 3.09

1.55 2.06 0.52 92.78 6.70

25.54

16.85 11.41

3.80 9.24

25.5 50.00 24.46 4

40.53

20.00 7.89

7.89 5.79 2.11 76.32 21.58

32.63

14.74 9.47

14.2 18.9 1.05 56.32 42.63 1 5 13.5 7.29 59.38 33.33 4

32.81

17.19 11.46

8.33

28.87

24.74 15.46

6.70 6.70 8.76 62.37 28.87

31.61

25.39 11.92

9.33 9.33 5.70 63.73 30.57

177 Estimating cost to government

XLRI Jamshedpur
The relatively lesser salary we get in Government is, to a large extent, compensated by leave benefits, i.e., 7.29 EL, CL & SL, as compared to the private sector With my experience, finding an attractive job in private sector will 8.29 not be difficult. Employees should be allowed to choose the extent of cash component 31.61 as against the non-monetary benefits I feel that all the benefits currently being given should be converted into 28.35 cash and paid as part of pay I feel that Pay in the government should focus more on cash aspects, 7.77 and leave the retirement benefits planning to the individual employees I feel that Pay in the government should focus more on cash aspects, and less on retirement benefits, 8.25 because employees can plan and fund their own retirement benefits I feel that the cash component in the pay packet should be much more 27.46 than the non-monetary benefits I think the cash component of the pay in the government sector is too low compared to the non-monetary 19.90 benefits that the government employees get I would prefer if the government gives me equivalent cash instead of 27.84 giving me various benefits Pay in the government sector should have more focus on cash aspects than retirement benefits as 9.95 employees can allocate their resources wisely The quantum of various types of leave can be curtailed by 27.46 compensating with cash Medical benefits in my organization is inadequate to meet the needs of 34.72 the employees Medical benefits and allowances in government sector is more attractive 5.67 than in the private sector The medical benefits and allowances are certainly attractive in my 9.95 organization

61

21.35

22.92 14.06

11.9 18.2 4.17 51.56 44.27 8 3

62

26.94

20.21 20.73

6.22 7.77 9.84 55.44 34.72

63

34.20

12.44 9.33

3.11 5.70 3.63 78.24 18.13 12.3 2.06 68.04 29.90 7 39.9 2.59 36.27 61.14 0

64

27.32

12.37 10.31

7.22

65

17.10

11.40 11.40

9.84

66

19.07

8.25 13.40

9.28

39.1 2.58 35.57 61.86 8

67

42.49

9.33 9.84

5.18 2.59 3.11 79.27 17.62

68

38.22

11.52 9.95

9.95 8.90 1.57 69.63 28.80

69

24.23

18.04 9.79

6.19

11.3 2.58 70.10 27.32 4

70

26.70

15.18 13.09

5.24

23.5 6.28 51.83 41.88 6

71

42.49

10.88 6.22

3.63 8.81 0.52 80.83 18.65 12.9 0.52 68.91 30.57 5 38.6 5.67 34.54 59.79 6

72

25.39

8.81 8.29

9.33

73

20.10

8.76 12.37

8.76

74

8.38

20.42 14.14

11.5 34.0 1.57 38.74 59.69 2 3

178 Estimating cost to government

XLRI Jamshedpur

179 Estimating cost to government

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