FinMin wants AI to recast, phase out incentive scheme

New Delhi: While struggling national carrier Air India is likely to get relief from the government on Saturday, it will be with riders. Rationalising and phasing out the productivity-linked incentive over a period of time by merging it with salary is one of the conditions the finance ministry will push for while agreeing for a package that includes equity infusion and soft loans.
The committee of secretaries (CoS), chaired by Cabinet secretary K M Chandrasekhar, scheduled to meet tomorrow will discuss the finance ministry’s proposal, said a government official. “Nearly 40 per cent of the airline’s total annual wage bill of Rs 3,000 crore accounts for PLIs, which falls outside the guidelines of the department of public enterprises,” he added.Air India will also present to the CoS a detailed financial turnaround plan and put forward its board’s views on wage restructuring and the controversial proposal to halve the productivity-linked incentive (PLI) that was rejected by the company’s unions.
28/08/09 Smita Aggarwal/Gunjan Pradhan Sinha/Indian Express

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Categories: NACIL Aug 2009