LIC employees get 16% wage hike, arrears for two years; financial implications exceed ₹4,000 crore annually.
Centre has given its nod to a 16 per cent hike in basic wages for Life Insurance Corporation of India (LIC) employees, effective from August 2022, reported CNBC-TV18. This means that LIC workers will receive arrears for the past two years.
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This decision gives a hike to over 1 lakh employees and 30,000 pensioners of LIC. The financial implications are significant, with an estimated annual impact of over ₹4,000 crore for LIC, pushing its wage bill beyond ₹29,000 crore.
Moreover, earlier this month, the Union Cabinet, headed by Prime Minister Narendra Modi, announced a hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2024. The government approved a 4 per cent increase over the existing 46 per cent of Basic Pay/Pension, aiming to offset the impact of rising prices.
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The collective financial burden on the exchequer, encompassing both DA and DR, amounts to Rs.12,868.72 crore annually.
In addition to DA, the government increased transport allowance, canteen allowance, and deputation allowance by 25 per cent. House Rent Allowance also saw an uptick from 27 per cent, 19 per cent, and 9 per cent of basic pay to 30 per cent, 20 per cent, and 10 per cent, respectively. Gratuity benefits were raised by 25 per cent, with the ceiling increased from ₹20 lakh to ₹25 lakh.
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The incremental allowances will result in an annual burden of ₹9,400 crore on the exchequer.
This decision will positively impact approximately 49.18 lakh central government employees and 67.95 lakh pensioners.
The government said that the increase adheres to the accepted formula based on the recommendations of the 7th Central Pay Commission.
