Productivity-linked and ad hoc payouts to cover 31 lakh employees.

In another move to push demand, the Union Cabinet on Wednesday moved to put over Rs. 3,700 crore in the hands of the nearly 31 lakh staff of Central government organisations by approving a productivity linked bonus (PLB) and a non-productivity linked (ad hoc) bonus for 2019-20.

According to a government statement, the PLB will cover 16.97 lakh non-gazetted employees of commercial government establishments such as Railways, Posts, Defence, EPFO, and ESIC, with a financial implication of Rs. 2,791 crore. The non-PLB, or ad hoc, bonus of Rs. 946 crore will benefit 13.70 lakh employees.

The bonus ahead of Vijayadashami and Diwali will encourage the middle-class to go out and spend and thus add to the demand in the economy, Minister of Information and Broadcasting Prakash Javadekar told reporters.

Government establishments involved in commercial activity give PLB to non-gazetted employees. At the same time, non-gazetted employees of various Central ministries and departments get an ad hoc bonus. Though the bonus equivalent to days in an accounting year varies for different set-ups, the ceiling for payment calculation is the same — Rs. 7,000 for non-gazetted employees and Rs. 1,200 for casual labourers.

Shiv Gopal Mishra, President, All India Railwaymen’s Federation, said over 11 lakh Railway workers will get bonus equivalent to 78 days of emoluments. Based on the ceiling, an employee can get up to Rs. 17,902. “The announcement shows the government’s commitment and acknowledges the work put in by Railway men during the pandemic,” he said.

In the Defence department, the days for calculation of bonus vary from 26 to 40 for civilian employees. For non-gazetted employees of various Central ministries and departments, it is 30 days.

Bonus is paid to non-gazetted employees before Durga Puja/Dasara, for their performance in the preceding year. The government said the amount will be disbursed immediately.

Past bonuses

For 2018-19, the Railways had given out PLB of around Rs. 2,024 crore. Other government organisations, too, had offered PLB as well as the ad hoc bonus.

In 1979-80, the Railways became the first government undertaking to introduce PLB.

The main consideration then was the important role of the Railways as an infrastructural support in the performance of the economy as a whole. A PLB was considered more desirable vis-à-vis payouts under the Payment of Bonus Act, 1965.