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Revised VRS package in place for Karnataka PSU employees

Madhumathi D.S.

BANGALORE, Aug. 15

A REVISED and more attractive VRS package is now in place for employees of Karnataka's PSUs, and comes with added ex-gratia benefits.

Unlike the earlier November 1997 scheme with age and service criteria, the new guidelines notified on August 10 apply prospectively to all regular employees of the 78 PSUs, according to Mr Abhay Prakash, Director General of the Karnataka State Bureau of Public Enterprises. KSBPE has been designated the nodal agency to oversee the State's PSU restructuring programme.

There are additional ex-gratia benefits, though the maximum compensation stays at Rs 5 lakh per employee. Conditions such as 10 years of minimum service and an age bar of 45 years have been scrapped.

Though the new exit formula is essentially meant for the 15 enterprises earmarked for privatisation or closure in Phase 1 of PSU reforms, it may also find takers from profiting enterprises which are planning to rightsize themselves. Under the earlier sch eme, only 300 odd employees from two defunct PSUs opted for the VRS.

Surplus staff have been tentatively estimated at 12,000 out of a total PSU staff strength of 1.66 lakh. Individual enterprises will now have to assess their extra numbers. The Government expects to complete Phase 1 by March 2002, which may mean VRS for s ome 5,000 employees by then.

The entire PSU restructuring process is due to be completed by March 2005. It was unrolled last year with the setting up of a Public Sector Restructuring Commission chaired by Mr P. Padmanabha.

The S.M. Krishna Government has also included these reforms as part of its comprehensive Rs 5,000-crore Economic Restructuring Programme funded by the World Bank over the next four years.

PSUs implementing the VRS have been told to sustain the scheme mainly out of internal resources. However, the needy ones may also access State support through a budgetary provision Rs 100 crore and a Rs 200-crore World Bank aid.

The norms have been revised and modelled in tune with the Central guidelines of May 2000, Mr Abhay Prakash told Business Line.

Benefits of PF, gratuity, earned leave and other dues have been retained from the earlier package. The ex-gratia payment will, however, be computed on the basis of 35 days for each completed year of service and 25 days for each year remaining before supe rannuation. This will be subject to a minimum salary (basic + DA) of 45 days and maximum of 60 days for each completed year. The settlement process would be completed in 90 days.