03 May, 2024 12:32 PM

Finance Ministry notifies LIC’s 17% wage revision

Finance Ministry notifies LIC’s 17% wage revision

The Union Finance Ministry has recently notified the wage revision of LIC employees, which will benefit over 1.1 lakh employees in the state-run insurance company. The revision, which is about 17 per cent annual increase in the wages, with be applicable from August 1, 2022. 

The wage revision would see an annual implication of around Rs 4,000 crore, taking LIC’s overall wage bill per year to about Rs 29,000 crore, the Businessline reported.

The recent salary adjustment for employees of LIC aligns with the 17 percent wage increase implemented for more than 8.5 lakh bank employees as of November 2022. This adjustment was part of a bipartite wage settlement agreement reached between bank unions and the Indian Banks' Association (IBA).

It is to be noted that the Department of Financial Services (DFS) in the Finance Ministry went ahead with the wage revision even when the model code of conduct in place for the seven-phase Lok Sabha elections, which started last month. DFS has reportedly taken the Election Commission of India’s go ahead  before proceeding with the implementation of wage revision for LIC employees.

Wage revision in LIC takes place every five years. In March this year, the government approved a 17% salary hike for LIC employees. According to the notification released on Tuesday, April 30, this increase will be implemented starting from August 1, 2022. The previous salary adjustment for LIC employees took place in 2017.

Last year in September, the Finance Ministry approved a series of welfare measures, including enhancement of the gratuity limit and family pension, for the benefit of LIC agents and employees.

The welfare measures are based on the amendments to LIC (Agents) Regulations, 2017, Enhancement of Gratuity Limit, and Uniform Rate of Family Pension, among others, the finance ministry said in a statement.

Under this, the ministry approved the enhancement of gratuity limit from Rs 3 lakh to Rs 5 lakh for LIC agents benefitting more than 1.3 million of them.
The ministry also increased the term insurance cover for agents from the existing Rs 3,000-10,000 to Rs 25,000-1,50,000.

"This enhancement in term insurance will significantly benefit the families of deceased agents, offering them a more substantial welfare benefit,” the ministry said in a statement.

With regard to LIC employees, the ministry also approved family pension at a uniform rate of 30 per cent for the welfare of the families.

Incorporated in 1956 with an initial capital of Rs 5 crore, LIC posted a 49 per cent year-on-year increase in net profit at Rs 9,444.4 crore as compared to Rs 6,334.2 crore in December 2022 quarter. The enhances performance was driven by an increase in net income from investments and also growth in net premium income. It is yet to report its March quarter results for FY24

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