Govt doubles calculation ceiling for payment of productivity-linked bonus

In a move that is likely to benefit about 40 lakh non-gazetted central government employees, the finance ministry on Tuesday announced doubling of the calculation ceiling to R7,000 per month for payment of productivity-linked bonus (PLB) and non-productivity linked bonus (ad-hoc bonus) for 2014-15 and 2015-16.

The announcement comes ahead of a planned strike to be held on September 2 by central trade unions. “Accordingly, the PLB or ad-hoc bonus, as the case may be… shall be re-worked out based on the calculation ceiling of monthly emoluments of Rs 7,000 instead of Rs 3,500,” the department of expenditure said in an office memorandum.

The revision in salary ceiling for calculation of bonus for the government employees, including railways, could entail an annual cost of R3,000 crore on the exchequer, sources said. The labour ministry would also ask all the central PSUs to replicate this as well, they said.

RSS-backed Bharatiya Mazdoor Sangh (BMS) welcomed the government’s decision on PLB and ad-hoc bonus by calling off a proposed strike on September 2. “The Central government will pay bonus for the years 2014-15 and 2015-16 based on revised norms,” BMS said in a statement.

“We welcome it and are satisfied by the increase in minimum wages. BMS will not participate in the (September 2) strike,” BMS general secretary Virjesh Upadhyay said, according to PTI.

In October last year, the government had approved payment of PLB equivalent to 78 days’ wages for railways for 2014-15. The total payments were estimated at R1,030 crore. A PLB of 78 days’ wages was earlier paid for the financial years 2010-11, 2011-12, 2012-13 and 2013-14.

This article originally appeared in the The Financial Express on August 31, 2016.

Read the article Govt doubles calculation ceiling for payment of productivity-linked bonus in the original context.

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