The Telegraph
Since 1st March, 1999
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ONGC job-cut scheme trips on red tape

New Delhi, June 9: ONGC’s golden handshake proposal for 10 per cent of its work force has been snagged in red tape for over a year. A meeting of the committee of secretaries, scheduled to be held last Wednesday to discuss the issue, has now been postponed to the third week of June.

Petroleum secretary B.K. Chaturvedi told The Telegraph that the ONGC proposal will be sent for Cabinet clearance only after the approval of the committee of secretaries.

The proposal under which 4,000 employees of its 40,000 strong work force were willing to accept the voluntary retirement scheme was not cleared by the Cabinet as the finance ministry had raised objections that the ONGC compensation package was too liberal and would set a trend for other PSUs as well.

The thinking was that while ONGC as the richest corporate house in the country could afford to pay the separation package, other PSUs such as SAIL and IDPL would not be able to pay this amount. Yet, the employees would cite this example as a precedent. This could raise the possibility of the government having to dole out the money instead. This would have serious implications for the budget. The proposal was, therefore, referred to a committee of secretaries.

However, the flip side of the coin is why should an employee want to leave a plum ONGC job unless he is offered a very attractive package' Going by this logic, the ONGC separation package would have to be better than an IDPL or SAIL offer.

The objective of the ONGC VRS proposal was to shed surplus staff in non-core functions such as administration and lower the age profile with new recruitment in core are as such as drilling and exploration work. This field work is physically strenuous and a younger workforce can give better results.

Fresh recruitment of young staff would enable the company to shift some of the older staff to desk jobs and replace them with younger employees in the field. Since oil exploration is entering the more difficult frontier areas such as deep sea this assumes even greater importance.

The ONGC management is apparently nursing the grouse that although the government has given navratna companies extensive powers on paper, in practice the decisions are still being bogged down in bureaucratic red tape.

Downstream oil companies like Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) have also submitted VRS proposals for government clearance. Sources disclose that the HPCL proposal has identified 1,000 non-management employees and 250 in the management category as surplus. The VRS will entail an outgo of Rs 260 crore for the company.

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