For employees of four public sector general insurance companies effective from August 2017, the Finance Ministry has announced an average 12% pay increase.
A gazette notification dated October 14, 2022 stated, “This Scheme may be called the General Insurance (Rationalisation of Pay Scales and other Conditions of Service of Officers) Amendment Scheme, 2022,”
It added that officials and workers will receive arrears for five years and that this wage revision would take effect on August 1, 2017, and that it would apply to people who had worked for these companies. It further stated that the subsequent revision, which is scheduled in August 2022, will take the form of variable pay based on both the employer’s and the employee’s performance.
The imposition of remuneration linked to employee performance and corporate performance is not well received by the unions. “We are having strong reservations against the way the wage revision has been done after the wait of 64 months. Linking wages with performance seems to be illogical as we employees undertake so many government schemes,” General Insurance Employees’ All India Association (GIEAIA) general secretary Trilok Singh said.
He added that state-owned insurance company employees, not those from the private sector, are what make all government programmes successful, thus there is no equal playing field for public sector insurance companies. Data from year to year show that the private sector has lagged, he continued. Singh emphasised that although unions are not opposed to reforms, they should be implemented with consideration for the public sector structure of these companies.
The General Insurance Business (Nationalisation) Amendment Act, which was announced by the government last year, will enable it to reduce its ownership of state-owned general insurers to below 51%. An official source estimated that the combined wage bill for New India Assurance, National Insurance, Oriental Insurance, and United India Insurance will be close to Rs 8,000 crore due to the 12% raise plus five years of arrears.
Every five years, wages are revised for public sector banks and insurance firms. The following pay raise for insurance company employees is scheduled to begin in August 2022.