State general insurers to get free hand on wages

After announcing a package of managerial autonomy for public sector banks, the Union finance ministry proposes to dismantle the uniformity in wage negotiations for the four public sector general insurance companies.

It is understood that the ministry, in its talks with the General Insurers' Public Sector Association of India this week, has made it clear that the four state-owned insurers can decide on their own wage bills separately.

Any decision taken by one of the four companies is not binding on the other three entities. This means employees of one state insurance company may not necessarily get the same hike as his or her counterpart in another state insurance company. An announcement to this effect is expected next week.

"The trend is quite clear now. The finance ministry wants to begin addressing the autonomy issue from the most sensitive aspect "" labour," said an industry observer.

The Life Insurance Corporation of India is also expected to get some level of managerial autonomy, though this would involve amendment to the LIC Act, stated senior executives.

Section 48 & 49 outlines the government's powers to decide the terms and conditions of employment, both in terms of employees and insurance agents. This is expected to be modified.

"The government is trying to give autonomy to all public sector enterprises," said senior insurance executives.

Under the Insurance Act 1938, individual insurance companies are permitted to decide wage revision separately, without it being binding on all. The wage revision of the four state-owned general insurance companies is due since August 2002.

Executives of New India Assurance Company, one of the four general insurance outfits, said the management has offered a hike of 8.5 per cent, which would add about Rs 84 crore monthly to the wage bill for the four companies. State insurance company employees, however, have rejected the offer.

The trade unions want a much higher salary hike.

"The rise in inflation, growth of business and the change in the environment is the base for our demanding a significant increase in salaries," said Bhartiya Vima Karmchari Sena Labour Wing of Shiv Sena, which has asked for a 23 per cent hike in wages.