The proposed scheme, which is under final stage of approval for superseding the scheme of 1988,provides for adoption of a uniform VRS policy dividing the PSUs into three categories and contemplates a revolving fund for directly funding the administrative ministries for VRS.

Hitherto, the VRS was available only to the permanent employees while the new schemes seeks to extend it to the badly workers and work-charged staff, though leaving its implementation up to the flexibility of the administrative ministries.

The permanent employees will get compensation even during the closure period of the enterprise while the closure period will not be counted in case of the badli workers nor will they get any money for the remaining period of service.

Yet another important provision is based on the Justice S.Mohan Pay Revision committee recommendations to notionally revise the wages (basic and DA) for two revisions that were due on 1st January 1987 and 1st January 1992 for the purpose of the calculation of VRS compensation, says a ""secret" not of the Department of Public Enterprises (DPE) put up for the government ‘s approval.
The committee of secretaries have already discussed the note at its two meetings and is soon likely to send them to the union cabinet for the final approval.

Model calculations provided in the "secret" note, which is in possession of this writer show an employee who has put in 32 years of service and 17 years more to go before reaching the retirement age will get Rs.1,83,397 if his basic is Rs.350 and Rs.2,72,150 if his basic is Rs.900.The compensation includes gratuity on basic plus DA plus ad hoc ,retrenchment compensation on basic plus DA plus ad hoc plus house rent allowance at the rate of 35 days of salary for each years of service and remaining period benefit at the rate of Rs.2500 multiplies by remaining service years or 25 days salary multiplied by remaining service years or 250 days of salary whichever is higher.

In case of the Badli workers , the minimum guaranteed compensation is Rs.16,000>the VRS is to be calculated at the rate of rs.4000 multiplied by years of service or gratuity for years in which 240 days attendance recorded plus retrenchment compensation at the rate of 35 days of salary per year, whichever is higher. A Badli workers for instance who has put in say 23 years of service but only 12 years of 240 days of attendance will get Rs.92,000(23xRs,4000).However, if he has put in 25 years of service of which 22 years with 240 days of attendance ,he will get Rs,1,22,705 since his gratuity plus retrenchment compensation will be higher.

NRF, which was launched by the then finance minister Manmohan Singh in 1992 with much fanfare for voluntary retirement and retraining and rehabilitation of the surplus staff," can cease to exist" as funds for VRS will now be given directly to the administrative ministries as budgetary grant or support ,says the note.

"VRS should be opened for a specified time limit and full provision of funds should be available with the administrative ministries to pay compensation to all those who retired within the specified period," says the "secret" note. It says the time-bound implementation will result in " early restructuring, rehabilitation and renewed profitability".

The Department of Public Enterprises is to monitor the scheme and provide regular reports to the cabinet secretariat. The finance ministry is to administer the revolving fund to be set up to meet requirements of the ministries by setting apart appropriation of disinvestment funds.

The DPE had undertaken a detailed review of the voluntary retirement scheme in vogue for the PSU employees since October 1988 as also several schemes coming into effect since then. The note says since inception in 1988 ,about 2,27 lakh employees in 170 enterprises had availed VRS as on March 31,1998.The biggest drawback ,as per the note was,’’ the delay in availability of funds under VRS from NRF."

The PSUs have been divided into three categories .The first one is of the profit making and financially sound enterprises like SAIL, Navaratnas and mini- Ratnas,who will get totally free hand to implement VRS schemes for their employees and executives but of course the cost will be met" out of their own resources."

The other two categories are of marginally profit making or loss making enterprises and sick and financially unlivable enterprises that, the report says,’ have necessarily to depend on budgetary resources for the VRS implementation".

GUJARAT PATTERN : The new scheme is patterned on Gujarat government’s most successful VRS introduced for its Gujarat State Textile Corporation’s textile workers two years ago, though it is yet to be decided whether the compensation will be given also one personal pay and HRA as in Gujarat or only on basic pay and DA.

The scheme is meant for the PSUs making marginal profit or marginal loss and hence it has been stressed that "VRS in these units must be tied up with the clear restructuring \ revivable improvement program so that the VRS funds form part of a larger package of making them more efficient and profitable".

The Textile Ministry of Kashiram Rana had pressed for adoption of the Gujarat pattern to provide an attractive package and it was his insistence to include temporary and badli workers of the textile industries that led to the decision to throw open the scheme to the badli workers of all industries.

The budget papers tabled in the Lok Sabha by finance minister Yashwant Sinha had hinted at the upcoming new scheme by stating that "budgetary arrangements regarding the NRF are being revised and pending the review, Rs 300 crores are being provided as Plan grants", which includes Rs.160 crores for the coal sector PSUs Rs132 crores lump sum. Another lump sum provision has been made in the budget for voluntary separation scheme at Rs.337 crores, the new name of the same VRS ,as against Rs.180 crores in the revised 1998-99 budget.

The government funded VRS scheme recently approved by the union cabinet for ten unviable PSUs of the Department of Heavy Industry is sought to be extended to 21 other PSUs declared unviable by BIFR as also to all such similarly placed enterprises. The concerned ministries have been asked to work out the cost which hall be provided in their budgets as a budgetary grant.

The " secret" note points out that performance under the voluntary retirement scheme has been "less than successful, primarily due to inadequate budgetary support,open -ended schemes and a multiplicity of schemes whose attractiveness has not been perceived by the employees". And those who opted for VRS found it difficult to obtain alternate employment which means" the NRF program of training and rehabilitation has been less than successful’’.

According to the note the department of heavy industry, ministry of textiles and department of chemicals and petro-chemcials have stated that the quantum of funds being made available under the NRF funds for VRS progamme is inadequate and that a revolving fund should be created which would give the administrative department flexibility to implement the VRS. They have also suggested that the funds should be made available at the beginning of the financial year to achieve the maximum results.

About the eligibility, the department of heavy industry has suggested that the existing condition of 10 years of service and 40 years age should be waived, according to the note . The ministry of textiles would like to cover workers which includes temporary and badli worker of the textile industries. The department of fertilizers has suggested that there are a number of non-operating sick units under the government in which formal decision of closure is being delayed for various reasons. In such cases, VRS would face retrechment. Department of chemicals and Petro-chemicals has suggested that VRS should be available through the NRF to the cooperative sector public enterprises as well.