New Delhi, Oct. 26: Oil and Natural Gas Corporation’s (ONGC) voluntary-retirement scheme (VRS) has flopped. It is reliably learnt that a mere 500-odd employees have come forward for the golden handshake offered by the oil giant.

The company, on the other hand, had set an ambitious target of retiring 10 per cent (4,000) of its 40,000 strong workforce through the VRS. While the official closing date for the scheme was September 30, a few applications are reported to have come in after this date.

Sources said the severance package offered was not attractive enough for the ONGC staff who hold well-paid secure jobs. The oil giant is also the richest company in the country and there is a considerable amount of prestige attached to working for the company.

The VRS offered to the employees had been drawn up by the department of public enterprises which was applicable to other public sector companies as well. It offers 60 days’ pay for each year of service with the company or the pay for the remaining number of months left to retire, whichever is lower. The ONGC management had earlier drawn up a scheme to offer 45 days’ pay for each year of service as a one-time payment and the employees would also continue to get the basic pay till their retirement age. This VRS package, however, was not cleared by the Union cabinet as it was considered too lavish.

The finance ministry had expressed the fear that the ONGC package would also be cited as a precedence by other PSUs for their retirement schemes. While ONGC, with a profit of over Rs 10,000 crore, can afford to pay such a severance package, other public sector undertakings such as Steel Authority of India (SAIL) and IDPL, for instance, will not be in a position to pay out such hefty sums.

However, the contrary argument was that why should an employee want to leave a plum ONGC job unless he was offered a very attractive package? Going by this logic, the ONGC package would have to be better than that offered by SAIL or IDPL.

The objective of the VRS was to shed surplus staff in non-core functions such as administration and lower the age profile of ONGC by fresh recruitment in core areas such as drilling and other oil exploration activities. This field-work is physically very demanding and a younger workforce is expected to give better results.