Thursday, 25 Aug 2011
Investment banking major JP Morgan said that state run mining giant Coal India, which is under pressure from labor unions for a salary hike, could see its wage costs rise by as much as 19% this fiscal.
JP Morgan in a research note said that "The wage cost increase from July 1 would impact the non executive segment, which is 85% of the wage bill. We are building in a total wage cost increase of 19% in FY12E, which includes the inflation impact and the wage agreement hike.”
Four of the five trade unions of Coal India have put up their wage demands to the management, demanding salary hikes ranging from 100% to 500% which is likely to put severe financial pressure on the company.
The current average basic salary of Coal India worker is about INR 8,320 per month.
While the Left-backed All-India Trade Union Congress has asked for a revised salary of INR 16,000 per month, the Hind Khadan Mazdur Federation has asked for a minimum revised basic salary of INR 40,000 per month.
At present, Coal India and its subsidiaries spend about INR 20,000 crore on salaries every year, accounting for over 40% of the cost of production.
The unions have also demanded better parity between workers on its payroll and workers on a contract, as well as between workers and officers.
(sourced from ET)
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