The government issued a six-point instruction to PEs about a week ago following growing complaints regarding distribution of various allowances by PEs in the name of incentives to the employees. [break]
The ministry has asked PEs to distribute pension and gratuity to employees only on the basis of salary that they were drawing at the time of their retirement.
The finance ministry has barred distribution of additional allowance of Rs 1,000 to employees who are also entitled to receive Rs 1,000 as provisioned in the freshly hiked remuneration.
Some PEs are found to have distributed this allowance despite the government instructions.
Through the budget for fiscal year 2013/14, the government hiked salary of civil servants, including those working with state undertakings, and also provisioned allowance of Rs 1,000 per month.
The ministry has also instructed the PEs not to adjust the salary of their chief executives on the basis of salary hike announced through the budget.
Chief executives of PEs are appointed through PE Management Board. Their salary, allowance, and perks and benefits are fixed by the board as per their set term.
A senior finance ministry official said the Agricultural Development Bank Limited was found to have raised salary of its chief executive by 18 percent in line with the pay hiked announced through the budget speech.
“PEs should provide salary and other benefits to their chief executives as per the Terms of Reference (ToR). But ADBL was found flouting the rule,” the official said.
Some PEs are also found to have distributed different types of allowances to their employees, flouting instructions of their concerned regulators on different occasions.
“Some PEs have become so defiant that they are not only distributing such ´unnatural´ allowances, but also ignoring instruction to recover the amount from the concerned employees,” Krishna Prasad Devkota, joint secretary at the MoF, told Republica.
Showing serious objection to the growing trend of increasing remuneration of employees without taking consent by the finance ministry, the ministry has issued strong instruction making officials involved in taking such decisions accountable for the loss incurred on the PEs.
The ministry has also warned that the government will recover the amount from the officials concerned involved in such financial indiscipline. “We will take action against anyone found flouting our instruction,” Devkota added.
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