Centre to shell out over Rs 13,500 crore on wage and pension revisions: Who gets how much

The Central Government has approved a set of long-pending wage and pension revisions for key institutions in India’s financial sector, covering employees of Public Sector General Insurance Companies (PSGICs), staff of the National Bank for Agriculture and Rural Development (NABARD), and retirees of the Reserve Bank of India (RBI) and NABARD. The decisions underscore the government’s emphasis on employee welfare, retirement security and institutional stability at a time of rising cost of living and longer post-retirement lifespans.

For PSGICs, the approval marks a significant upgrade in employee compensation and post-retirement support. The wage revision, effective from August 1, 2022, entails an overall increase of 12.41% in the wage bill, including a 14% hike in basic pay and dearness allowance. Around 43,247 employees across six insurers—National Insurance Company, New India Assurance, Oriental Insurance, United India Insurance, General Insurance Corporation of India and Agricultural Insurance Company—will benefit. The package also raises the National Pension System (NPS) contribution to 14% for employees who joined after April 1, 2010, strengthening long-term retirement savings.

In addition, the government has approved a uniform 30% increase in family pension for PSGICs, benefiting 14,615 family pensioners. The combined financial impact of wage arrears, enhanced NPS contributions and higher family pension payouts amounts to Rs 8,170.30 crore, making it the largest fiscal outlay among the three institutions.

NABARD’s revision package is more balanced between serving employees and retirees. The pay revision, effective November 1, 2022, provides an average 20% increase in pay and allowances for Group A, B and C employees, covering around 3,800 serving and former staff. Alongside this, the government has approved pension parity for NABARD retirees recruited directly by the institution and who retired before November 1, 2017, bringing them at par with ex-RBI NABARD retirees.

Financially, NABARD’s pay revision will raise the annual wage bill by about Rs 170 crore, with arrears of approximately Rs 510 crore. The pension revision will involve a one-time arrear payout of Rs 50.82 crore and an additional recurring pension outgo of Rs 3.55 crore per month, benefiting 269 pensioners and 457 family pensioners.

For RBI retirees, the decision is focused exclusively on pension adequacy. The government has approved a 10% increase in pension and family pension on basic pension plus dearness relief, effective November 1, 2022. This translates into an effective 1.43-times increase in basic pension, significantly enhancing monthly income for 30,769 beneficiaries, including 22,580 pensioners and 8,189 family pensioners. The total financial implication stands at Rs 2,696.82 crore, comprising Rs 2,485.02 crore in arrears and a recurring annual outgo of Rs 211.80 crore.