The Committee of Secretaries will deliberate this week on a Coal Ministry’s proposal to provide performance related pay to executives of Coal India subsidiaries from consolidated funds.

The Department of Public Enterprises has opposed the Coal Ministry’s proposal.

“The Committee of Secretaries (CoS) is meeting on May 29 to deliberate on the Coal Ministry’s proposal for providing performance related pay from consolidates funds to executives of Coal India subsidiaries,” a Coal Ministry source said.

“After getting approved from the CoS, which is examining the matter, it will go to the Cabinet,” the source added.

In the absence of sufficient profit before tax, loss making CPSEs are not allowed to distribute performance related pay (PRP) and there is no concept of providing PRP based on the consolidated account of holding company.

The Coal Ministry has sought permission for allowing Coal India to determine the corpus of PRP due since 2007 on profit before tax based on its consolidated accounts and not from the individual accounts of its subsidiaries as required by the Department of Public Enterprises (DPE).

Coal India (CIL) would have to shell out about Rs 200 crore on account of PRP to its loss making subsidiaries, including Eastern Coalfields Ltd (ECL), if the proposal is accepted. The coal major has already incurred an additional Rs 6,500 crore burden on account of recent pay revision.

The Coal Ministry in its proposal has said that CIL is the holding company which appointed executives and controlled the cadre, transferring functionaries from one arm to another on promotion.

“It is unfair if the benefits of 2007 pay revision are not provided to some subsidiaries of CIL and unequal PRP among executives would create human resource problems,” a Coal Ministry official said.

At present as per the 2007 pay revision, PRP is directly linked to PBT and rating of a PSU besides performance of individual executives.

CIL which accounts for over 80 per cent of the domestic coal production has eight subsidiaries: ECL (West Bengal), BCCL (Jharkhand), Central Coalfields (Jharkhand), South Eastern Coalfields (Chhattisgarh), Western Coalfields (Maharashtra), Northern Coalfields (Madhya Pradesh), Mahanadi Coalfields (Orissa) and Central Mine Planning and Design Institute (Ranchi).

Of these, ECL and BCCL were loss-making in 2007-08.