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Sarbajeet K. Sen

New Delhi , April 7

THE unnerving shadow of the Election Commission has fallen on the Life Insurance Corporation (LIC). Fearing a possible censure from the Commission, LIC and the Ministry of Finance have kept in abeyance the proposal for performance linked lump-sum incentive (PLLI) for the corporation's workforce for fiscal 2002-03.

According to sources, LIC had recently discussed with senior Finance Ministry officials the proposal for PLLI for the period. However, with impending elections, the proposal could not be ratified.

"I do not think that we can make any financial commitments at this point of time. The issue of PLLI is also linked to wage settlement," top LIC officials said. LIC sources said that despite the pending wage negotiations, the management had worked out a formula for PLLI for 2002-03 and had taken it to the Government. The exact amount of PLLI proposed by the corporation, however, could not be ascertained.

Finance Ministry officials also hinted that the announcement on PLLI could run contrary to the Election Commission's code of conduct. Starting from the previous five-year wage settlement which took effect from August 1, 1997, LIC has been paying graded PLLI to its staff based on the performance of the corporation during the year. For the five-year period, employees have received a total of 10.67 per cent as incentive payment through the PLLI scheme.

While nothing was paid for 1999-2000 as LIC's growth figures did not match the parameters, the PLLI for 2000-01 was 3 per cent, while 6 per cent was paid for 2001-02. In addition, employees were given incentive of 1.67 per cent as arrears for the first two years of the wage settlement during which negotiations had been held for revision of salaries.

For PLLI grant, the corporation's performance has to exceed the threshold levels fixed on three counts - growth in new policies, growth in first year premium income and growth in total premium income. The threshold levels for the growth in each of the parameters has been arrived at by taking a 14-year average of the corporations performance at the time of the earlier wage revision.

With the period of the previous wage settlement ending on July 31, 2002, negotiations are on between the LIC management and the unions for the next settlement. The last round of negotiation between the management and the unions to arrive at a settlement had been held in September 2003.

LIC had a total workforce of 1,17,138 employees including officers, development officers, clerical and supervisory staff.

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