PTI reported that Coal India Limited has signed a pact with its trade unions to increase wages by 25%, which would put an additional burden of INR 6,500 crore on the public sector unit.

The National Coal Wage Agreement has been signed and will be of five years tenure with effect from July 1st 2011. Increase in basic would be 88 per cent which will be reflected in all fixed allowances. As per the new pact, the house rent allowance in non urban areas would be 2% of basic per month instead of fixed amount of INR 150 a month.

The report quoted a CIL official as saying that “An agreement was signed between union representatives and CIL management late last night for increase in the wages under which minimum guaranteed benefit would be 25% of gross as on June 30th 2011.”

The hike will benefit over 370,000 workers of the world's largest coal producer.

At present, CIL and its subsidiaries spend about INR 20,000 crore annually on salaries of workers which is roughly over 40% of the cost of production.

(Sourced from PTI)