Government greenlights a 17% salary increase for 110,000 LIC employees

The government has sanctioned a 17% salary increase for over 110,000 LIC employees of the insurance behemoth Life Insurance Corporation of India (LIC). This approval follows shortly after the government greenlit a comparable raise for public sector bank employees.

LIC announced that the salary increase for its employees will take effect from August 1, 2022. Additionally, the insurer expressed gratitude to the government for raising the NPS contribution from 10% to 14% for approximately 24,000 employees who joined after April 1, 2010.

It was mentioned that over 30,000 LIC pensioners and family pensioners received a one-time ex-gratia payment. Earlier this week, the government approved a 17% salary increase for bank employees, effective from November 1, 2022.

Earlier this month, the government increased the dearness allowance (DA) to 50% of basic pay from the current rate of 46% effective from January 1 this year, benefiting over a crore employees and pensioners ahead of the Lok Sabha elections 2024.

During the December quarter of FY2024, LIC witnessed a 49% year-on-year increase in net profit, reaching ₹9,444.4 crore compared to ₹6,334.2 crore in the same period last year. The improved performance was primarily driven by an increase in net income from investments and growth in net premium income.

In the quarter, India’s largest insurer saw a 4.6% growth in net premium income. LIC’s net income from investments rose by 12% year-on-year to ₹95,266.8 crore in the December quarter from ₹84,869 crore in Q3FY2023. However, management expenses increased by 32% year-on-year to ₹18,193.8 crore.

On Friday, LIC’s shares closed 3.54% lower at ₹924.85 each on the BSE.

What is included in the revision?

LIC revises employee wages every five years.

This revision includes raising NPS contribution from 10% to 14% for around 24,000 employees who joined after April 1, 2010. It also involves a one-time ex-gratia payment to LIC pensioners, recognizing their valuable contributions to the organization, benefiting over 30,000 pensioners and family pensioners. Previously, the government increased the quantum of family pension, benefiting more than 21,000 family pensioners.

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