The Finance Ministry has notified an average 12 per cent wage hike for employees of four public sector general insurance companies effective from August 2017. 

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"This Scheme may be called the General Insurance (Rationalisation of Pay Scales and other Conditions of Service of Officers) Amendment Scheme, 2022," a gazette notification dated October 14, 2022 said. 

This wage revision is effective from August 1, 2017 and applicable to those who were in the service of these companies, it said, adding that officers and employees will get arrears for five years. 

The next revision due from August 2022 will be in the form of a variable pay based on the performance of the company and the employee, it added. 

Unions are not happy with imposition of pay linked to performance of the company and their performance. 

"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. 

There is no level playing field for public sector insurance companies, he said, adding, employees of state-owned insurance firms make all the government schemes successful and not the private sector. 

Data year after year indicates that the private sector has been laggard, he added. 

Singh emphasised that unions are not against reforms but it should be done keeping in mind the public sector nature of these companies. 

Last year, the government notified the General Insurance Business (Nationalisation) Amendment Act which will allow the government to cut its stake in state-owned general insurers to below 51 per cent. 

With the 12 per cent hike along with five years of arrears, wage bill for New India Assurance, National Insurance, Oriental Insurance and United India Insurance would be around Rs 8,000 crore, an official source said. 

Wage revision for public sector banks and insurance companies are done every five years. The next wage revision for employees of insurance companies are due from August 2022.