At least some folks now have reason to smile in these otherwise grim times. Even as the private sector lives in fear of pink slips and salary cuts, it’s champagne time in the public sector.

Top guns of public sector units (PSUs) will no longer have a reason to complain about their poor pay packets, as many will soon be drawing salaries more than the President of India.

The Cabinet on Thursday green-signalled a bonanza for public sector executives and non-unionized supervisors with salaries of chairpersons of top ranked PSUs now set to more than double from Rs 27,750-32,500 to Rs 80,000-1,25,000. The feel-good follows the pay revision of central government employees two months ago.

The Cabinet’s acceptance of the Jagannadha Rao committee’s pay revision recommendations comes just ahead of Assembly elections in Rajasthan and Delhi, and raises the possibility of the Election Commission seeing the move as a poll sop. It als comes amid political speculation about general elections next February.

The government is likely to argue that the sixth pay commission payouts promises to increase spending and help spur a slowing economy.

The revision relates to dearness allowance, house rent allowance, leased accomodation, city compensatory allowance and other allowances with effect from January 1, 2007 which will ensure substantial arrears for CPSU staff.

The new scales will impact 1.2 lakh non-unionised supervisory staff and 2.58 lakh board-level officers in 216 operational Central PSUs, minister of state in the PMO Prithviraj Chavan said after the Cabinet meeting.

While the new pay structure would be implementable from January 1, 2007, the new allowances would accrue to employees only after the decisions is notified by individual units, Chavan said.

The Cabinet relied on the Committee of Secretaries recommendations to classify PSUs into four categories – A, B, C and D, instead of five categories – A+, A, B, C and D recommended by the Rao Committee in May.

There are 247 CPSUs, of which 216 are in operation. In all 16.14 lakh are employed by these PSUs — of them, 12.36 lakh are unionised workmen who negotiate their wages directly with their respective companies.

The government decision comes at a time when concern over rising expenditure and deficits has taken a backseat in view of the perceived need to get the economy moving. The political fallout of high interest rates has been worrying the government for some time now and with sectors like real estateflagging, it is felt that some increase in disposable income is absolutely essential.