Government clears pay hikes for PSGIC, NABARD staff and pension revisions for RBI retirees

Just ahead of the Union Budget 2026, the Central government has approved wage revisions for employees of Public Sector General Insurance Companies (PSGICs) and the National Bank for Agriculture and Rural Development (NABARD), along with pension revisions for retirees of the Reserve Bank of India (RBI) and NABARD, according to a statement issued by the Press Information Bureau (PIB) on January 23.

The decision is expected to benefit around 46,322 serving employees, 23,570 pensioners and 23,260 family pensioners, the Finance Ministry said, providing relief amid rising cost-of-living pressures.

PSGIC wage structure

For PSGICs, the revised wage structure will be implemented retrospectively from August 1, 2022. The overall wage bill is set to increase by 12.41%, including a 14% rise in basic pay and dearness allowance. The revision will apply to 43,247 employees across PSGICs and also includes an increase in the employer’s contribution to the National Pension System (NPS) from 10% to 14% for employees who joined service after April 1, 2010.

PSGIC pension

The government has pegged the total financial outgo for the PSGIC wage and pension-related revisions at Rs 8,170.30 crore. This includes Rs 5,822.68 crore towards arrears, Rs 250.15 crore for enhanced NPS contributions and Rs 2,097.47 crore for family pension revisions. PSGICs covered under the decision include National Insurance Company, New India Assurance, Oriental Insurance, United India Insurance, General Insurance Corporation of India and Agricultural Insurance Company of India.

In addition, the government has approved a uniform family pension rate of 30% for PSGICs, effective from the date of notification in the official gazette. This revision will benefit 14,615 family pensioners out of the 15,582 existing beneficiaries under the scheme.

NABARD wage structure

For NABARD, the pay revision will come into effect from November 1, 2022, with an increase in pay and allowances of around 20% across Group A, B and C employees. The revision is expected to benefit nearly 3,800 serving and retired employees. The Finance Ministry estimates the additional annual wage bill at approximately Rs 170 crore, with arrears amounting to about Rs 510 crore.

NABARD pension

The government has also approved pension and family pension revisions for NABARD retirees who were directly recruited by the institution and retired before November 1, 2017. The revision aligns their pension with that of ex-RBI NABARD retirees. This move will result in a one-time arrear payout of Rs 50.82 crore and an additional monthly pension outgo of ₹3.55 crore for 269 pensioners and 457 family pensioners.

RBI pension

Separately, pension and family pension for RBI retirees have been revised with a 10% increase on basic pension plus dearness relief, effective November 1, 2022. The revision will benefit 30,769 beneficiaries, including 22,580 pensioners and 8,189 family pensioners. The total financial implication is estimated at Rs 2,696.82 crore, comprising Rs 2,485.02 crore in arrears and Rs 211.80 crore as recurring annual expenditure.

The Finance Ministry said the revisions are aimed at ensuring meaningful financial relief while preserving dignity and income security for employees and retirees.

Taken together, the measures are expected to benefit around 46,322 employees, 23,570 pensioners and 23,260 family pensioners. The revisions are aimed at providing tangible financial relief to employees of PSGICs and NABARD, as well as pensioners and family pensioners of RBI and NABARD, helping them better manage rising living costs while preserving dignity and social security in retirement.