Finance Ministry Grants 17% Wage Increase for 1.1 Lakh LIC EmployeesThe Finance Ministry has officially notified a wage revision effective from August 1, 2022, for over 1.1 lakh employees of the Life Insurance Corporation of India (LIC). This comes amidst the ongoing seven-phased Lok Sabha elections, and a Model Code of Conduct (MCC) is in place.
The hike is estimated to result in a 17 percent annual increase in LIC’s wage bill, amounting to approximately Rs 4,000 crore. The revised wage bill is set to increase LIC’s overall annual wage expenditure to about Rs 29,000 crore.
Reports indicate that the Department of Financial Service (DFS) secured the necessary clearance from the Election Commission before proceeding with the implementation of the wage hike for LIC employees.
Notably, this wage revision aligns with a similar 17 percent wage increase granted to over 8.5 lakh bank employees starting from November 2022 under a bipartite wage settlement agreement between bank unions and the Indian Banks Association (IBA). Notably, LIC conducts wage revision exercises once every five years, with the last raise for employees occurring in 2017.
The latest notification also includes a one-time ex-gratia payment to LIC pensioners, benefiting more than 30,000 pensioners and family pensioners.
Despite the positive impact on employee morale, some market analysts express concerns about the potential strain on profit margins due to increased employee expenses following the wage hike, raising questions about LIC’s investor appeal.
On a financial front, LIC’s performance for the quarter ended December 31, 2023, with a substantial 49 percent year-on-year increase in net profit, amounting to Rs 9,444.4 crore compared to Rs 6,334.2 crore in the previous year.