The Union Finance Ministry has recently announced the wage revision for employees of the Life Insurance Corporation of India (LIC). This decision will benefit over 1.1 lakh employees working in the state-run insurance company. The wage revision will result in a 17 percent annual increase in salaries and will be applicable from August 1, 2022. The revision is expected to have an annual implication of around Rs 4,000 crore, bringing LIC’s overall wage bill per year to about Rs 29,000 crore.
Alignment with Bank Employees’ Wage Increase
The recent salary adjustment for LIC employees is in line with the 17 percent wage increase that was implemented for more than 8.5 lakh bank employees starting from November 2022. This adjustment was a part of a bipartite wage settlement agreement between bank unions and the Indian Banks’ Association (IBA).
Implementation Despite Election Code of Conduct
It is noteworthy that the Department of Financial Services (DFS) in the Finance Ministry proceeded with the wage revision even during the ongoing Lok Sabha elections, which have a model code of conduct in place. The DFS reportedly obtained the Election Commission of India’s approval before proceeding with the implementation of the wage revision for LIC employees.
Regular Wage Revisions in LIC
Wage revisions in LIC take place every five years. In March of this year, the government approved a 17 percent salary hike for LIC employees. As per the notification released on April 30, 2024, this increase will be implemented starting from August 1, 2022. The previous salary adjustment for LIC employees had taken place in 2017.
Welfare Measures for LIC Agents and Employees
Last year in September, the Finance Ministry approved a series of welfare measures for the benefit of LIC agents and employees. These measures were based on amendments to LIC (Agents) Regulations, 2017, and included enhancements to the gratuity limit and family pension.
Under these measures, the ministry approved an increase in the gratuity limit from Rs 3 lakh to Rs 5 lakh for LIC agents, benefiting over 1.3 million of them. Additionally, the term insurance cover for agents was increased from the existing range of Rs 3,000-10,000 to Rs 25,000-1,50,000. This enhancement in term insurance aims to provide significant welfare benefits to the families of deceased agents.
For LIC employees, the ministry approved a uniform family pension rate of 30 percent for the welfare of their families.
LIC’s Performance
Established in 1956 with an initial capital of Rs 5 crore, LIC has reported a 49 percent year-on-year increase in net profit at Rs 9,444.4 crore in the December 2022 quarter, compared to Rs 6,334.2 crore in the previous year. This enhanced performance was driven by an increase in net income from investments and growth in net premium income. LIC is yet to report its financial results for the March quarter of FY24.
Then why not 5 Days Banking can be implemented ???
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“The DFS reportedly obtained the Election Commission of India’s approval before proceeding with the implementation of the wage revision for LIC employees”.