FM clears 12% wage hike, arrears for PSU normal insurance coverage sector

The Finance Ministry has authorized a 12 per cent wage hike with 5 years arrears for the general public sector normal insurance coverage trade. Finance Minister Nirmala Sitharaman, who had earlier refused to provide her last approval to the wage hike proposal until unions of the PSU insurance coverage corporations agree for the “performance linked future wage revision” had modified her thoughts to approve the proposal, sources stated.

The FM’s approval has reached the Department of Financial Services (DFS) for its mandatory notification and implementation, trade sources stated. PSU normal insurance coverage corporations have additionally come out with the brand new wage construction for numerous classes of workers after the wage revision.

The authorities had earlier rejected the demand of unions for a pay parity with Life insurance coverage Corporation (LIC) and ECGC.

However, trade observers have now raised questions in regards to the skill of the three loss making corporations (Oriental Insurance Company, United Insurance Company, and National Insurance Company) to bear the burden of upper salaries and arrears of their workers until the federal government infuses extra funds into these corporations. With the 12 per cent hike together with 5 years of arrears, wage invoice for NIC will likely be round Rs 2,177 crore, Rs 2,080 crore for New India Assurance (NIA), Rs 2,135 crore for OIC and Rs 1,752 crore for UII. There will likely be a complete outgo of Rs 8,146 crore from all 4 corporations for assembly wage revision bills, analysts stated. Analysts stated the trade will see a lot of workers, notably above 50, availing VRS (voluntary Retirement Scheme) after receiving their revised salaries.

The authorities final yr had authorized a 16 per cent wage revision with arrears for the staff of IPO-bound LIC and had even finalised a hike of 15 per cent with arrears for the PSU banking trade in 2020.