Four workmen unions of Coal India finally settled for a 20% hike in salaries along with a 4% rise in dearness allowance on Tuesday. An agreement to this effect has been signed by the unions and the Coal India management on Tuesday.
The hike is salaries is expected to result in an additional outgo that would range between Rs 3,500 crore and Rs 4,000 crore per year. The company spent Rs 33,514 crore on account of salaries wages and other payments to employees last year. Salaries account for almost 50% of cost of production of coal.
Nevertheless, the company has already made provisions of about Rs 3,000 crore salary hike which is expected to be implemented since June 2016.
Salaries are negotiated every five years which fell due in June 2016. Last time, the company allowed a 25% hike. However, this time the company could not afford a similar hike and negotiations took more than a year.