The Finance Ministry has notified the wage revision of LIC employees with effect from August 1, 2022, bringing relief to over 1.1 lakh employees of the Corporation. The move would lead to 17 per cent annual increase in wage bill for LIC.
This wage revision could see an annual implication of around ₹4,000 crore, taking LIC’s overall wage bill per year to about ₹29,000 crore.
This move of the Department of Financial Services (DFS) in the Finance Ministry to notify the wage hike is significant as it comes at a time when there is model code of conduct in place for the ongoing seven phased general elections. DFS is understood to have obtained the Election Commission’s nod before proceeding with the implementation of wage revision for LIC employees.
Interestingly, the latest wage hike for LIC employees is in sync with the 17 per cent wage increase handed out to over 8.5 lakh bank employees with effect from November 2022 under a bipartite wage settlement agreement entered between bank unions and the Indian Banks Association (IBA).
LIC undertakes wage revision exercise once in every five years. In March this year, the Centre had decided to make this 17 per cent wage increase for LIC employees. The notification issued on Tuesday (April 30) said that it would come into effect from August 1, 2022. The last raise to LIC employees was given in 2017.
An one-time ex-gratia payment to LIC pensioners, as a gesture of appreciation of their contribution to the organisation, also forms part of the revision. This will benefit more than 30,000 pensioners and family pensioners.
The government had earlier enhanced quantum of family pension which had benefited more than 21,000 family pensioners.
Many stock market analysts contend that increased employee expenses due to the wage hike could pressure profit margins, making LIC less attractive to investors.
For the quarter ended December 31,2023, LIC recorded a 49 per cent year-on-year increase in net profit at ₹9,444.4 crore (₹6,334.2 crore). The enhances performance was driven by an increase in net income from investments and also growth in net premium income.