The Central Government has officially approved wage and pension revisions for employees and retirees of Public Sector General Insurance Companies (PSGICs), the National Bank for Agriculture and Rural Development (NABARD), and the Reserve Bank of India (RBI).
This decision is expected to benefit approximately 46,322 employees and over 46,000 pensioners and family pensioners across these institutions. According to the government, the move “reflects Government’s continued commitment and emphasis on social security and financial well-being of employees and pensioners.”
For those working in Public Sector General Insurance Companies, the wage revision will be effective from August 1, 2022. This update includes a 12.41 per cent hike in the total wage bill and a 14 per cent increase in basic pay and dearness allowance. Additionally, the government has increased the National Pension System (NPS) contribution from 10 per cent to 14 per cent for employees who joined after April 2010. Family pensions for this sector have also been revised to a uniform rate of 30 per cent, a change described as a “gesture of appreciation for their valuable contribution to the organisation.”
NABARD employees will see a pay and allowance increase of approximately 20 per cent, effective from November 1, 2022. This revision applies to all Group ‘A’, ‘B’, and ‘C’ employees. Furthermore, the government has brought the pensions of NABARD retirees in line with those of former RBI-NABARD retirees.
At the Reserve Bank of India, retirees will see their pension and family pension enhanced by 10 per cent on basic pension plus dearness relief. The government stated that this specific decision was “taken in line with the government’s commitment to ensuring fair, adequate and sustainable retirement benefits for senior citizens and dependants.”
The financial implications of these revisions involve a significant expenditure across all three institutions, totalling several thousand crores in arrears and recurring costs.
For the Public Sector General Insurance companies, the total outgo is estimated at Rs 8,170.30 crore. The pay revision at NABARD entails an additional annual wage bill of approximately Rs 170 crore and total arrears of about Rs 510 crore, while its pension revision requires a one-time payment of Rs 50.82 crore. Finally, the revision for the Reserve Bank of India has an estimated total financial implication of Rs 2,696.82 crore, which “includes a one-time expenditure of Rs 2,485.02 crore towards arrears and a recurring annual expenditure of Rs 211.80 crore.”