First Published: Fri, Sep 20 2013. 11 32 PM IST Livemint.com
Salary cap raised for availing ESI benefits
All workers who draw a salary of up to Rs.25,000 will get medical benefits from facilities that ESIC runs directly or has a tie-up with
Prashant K. Nanda
Labour minister Sis Ram Ola says besides workers, their families will also benefit from the increase. The government has expanded the number of people eligible for Employees’ State Insurance (ESI), which provides medical care to industrial workers and their dependents, by increasing the salary cap of beneficiaries to Rs25,000 from Rs15,000, ignoring opposition from employers.
The labour ministry’s move, which sceptics say is politically motivated as it comes in the run-up to a round of state elections and a national election next year, will directly benefit an additional 4.5 million industrial workers.
The revision in the ceiling means that all industrial workers who draw a salary of up to Rs.25,000 will benefit from medical and hospitalization facilities at more than 1,550 clinics and hospitals that the Employees’ State Insurance Corporation (ESIC) runs directly or has a tie-up with. Every month, eligible employees contribute 1.75% of their salary and employers contribute 4.75% to the ESI corpus.
“It will benefit millions of our industrial workers across India. Besides workers, it is their families who will also benefit from the increase in ceiling,” labour minister Sis Ram Ola said on Friday.
The decision was taken despite objections from employers’ representatives at a closed-door meeting in Delhi on Thursday.
“Several members opposed the move, but the labour minister advocated for it and passed the proposal,” said an internal note reviewed by Mint.
The last increase in the salary ceiling for ESI was made in May 2010, when it was raised to Rs.15,000 from Rs.10,000. Currently, around 15 million workers directly benefit from the employees’ insurance provisions, and after the revision, the total number of insured people will increase to 20 million. If one includes beneficiaries from the families of the insured workers, at least 65 million people, largely in urban areas, will benefit from the scheme.
While the government believes that the decision was made to widen the social security safety net, experts and an employers’ association said that the move was populist in nature, keeping in mind the impending Lok Sabha election next year and state assembly elections in states such as Delhi and Rajasthan this year. The labour minister belongs to Rajasthan.
“The ministry has taken a stand to increase the wage ceiling and it will benefit the people at the grass roots. With elections coming, the ruling party will benefit,” said G. Sanjeeva Reddy, president of Indian National Trade Union Congress, a national trade union associated with the Congress party.
Though the ESI clinics have a reputation for poor service and inadequate treatment, insured individuals are entitled to avail of facilities like outpatient treatment, specialized consultations, hospitalization and referral services in tertiary-care hospitals. They are entitled to get medicines, ambulance services and immunization schemes among other family welfare services.
“The ministry did not listen to the employers’ representatives properly in the meeting,” said Michael Dias, secretary of the Employers’ Association in Delhi. “The bigger picture is: primary treatment for which maximum number of workers go to ESI dispensaries is inadequate.”
Since people are not even getting satisfactory services now, increasing the pool of beneficiaries will only worsen the situation, he said.
From the corporate sector point of view, Dias said, the move would lead to labour unrest in companies and less salary. “Since the employers and employees will contribute to the ESI corpus, the take-home salary will be less for those who are now getting added to the ESI pool. A reduction in salary and poor medical service will lead to labour protests and industrial unrest,” Dias added.
When the ESI provisions were first introduced in 1952, the wage ceiling was Rs.400, Dias said. “It took 16 years to get revised to Rs.500; how come the labour ministry is increasing the ceiling by almost Rs.10,000 in just three years,” he asked.
Reddy, however, said that the increase in ESI ceiling will now influence the demand for increasing the minimum wage for getting covered under the employees’ provident fund (EPF).
The current ceiling for mandatory EPF deduction is Rs.6,500 and the demand is for making it at least Rs.10,000.
From India, Bangalore
10Salary cap raised for availing ESI benefits
All workers who draw a salary of up to Rs.25,000 will get medical benefits from facilities that ESIC runs directly or has a tie-up with
Prashant K. Nanda
Labour minister Sis Ram Ola says besides workers, their families will also benefit from the increase. The government has expanded the number of people eligible for Employees’ State Insurance (ESI), which provides medical care to industrial workers and their dependents, by increasing the salary cap of beneficiaries to Rs25,000 from Rs15,000, ignoring opposition from employers.
The labour ministry’s move, which sceptics say is politically motivated as it comes in the run-up to a round of state elections and a national election next year, will directly benefit an additional 4.5 million industrial workers.
The revision in the ceiling means that all industrial workers who draw a salary of up to Rs.25,000 will benefit from medical and hospitalization facilities at more than 1,550 clinics and hospitals that the Employees’ State Insurance Corporation (ESIC) runs directly or has a tie-up with. Every month, eligible employees contribute 1.75% of their salary and employers contribute 4.75% to the ESI corpus.
“It will benefit millions of our industrial workers across India. Besides workers, it is their families who will also benefit from the increase in ceiling,” labour minister Sis Ram Ola said on Friday.
The decision was taken despite objections from employers’ representatives at a closed-door meeting in Delhi on Thursday.
“Several members opposed the move, but the labour minister advocated for it and passed the proposal,” said an internal note reviewed by Mint.
The last increase in the salary ceiling for ESI was made in May 2010, when it was raised to Rs.15,000 from Rs.10,000. Currently, around 15 million workers directly benefit from the employees’ insurance provisions, and after the revision, the total number of insured people will increase to 20 million. If one includes beneficiaries from the families of the insured workers, at least 65 million people, largely in urban areas, will benefit from the scheme.
While the government believes that the decision was made to widen the social security safety net, experts and an employers’ association said that the move was populist in nature, keeping in mind the impending Lok Sabha election next year and state assembly elections in states such as Delhi and Rajasthan this year. The labour minister belongs to Rajasthan.
“The ministry has taken a stand to increase the wage ceiling and it will benefit the people at the grass roots. With elections coming, the ruling party will benefit,” said G. Sanjeeva Reddy, president of Indian National Trade Union Congress, a national trade union associated with the Congress party.
Though the ESI clinics have a reputation for poor service and inadequate treatment, insured individuals are entitled to avail of facilities like outpatient treatment, specialized consultations, hospitalization and referral services in tertiary-care hospitals. They are entitled to get medicines, ambulance services and immunization schemes among other family welfare services.
“The ministry did not listen to the employers’ representatives properly in the meeting,” said Michael Dias, secretary of the Employers’ Association in Delhi. “The bigger picture is: primary treatment for which maximum number of workers go to ESI dispensaries is inadequate.”
Since people are not even getting satisfactory services now, increasing the pool of beneficiaries will only worsen the situation, he said.
From the corporate sector point of view, Dias said, the move would lead to labour unrest in companies and less salary. “Since the employers and employees will contribute to the ESI corpus, the take-home salary will be less for those who are now getting added to the ESI pool. A reduction in salary and poor medical service will lead to labour protests and industrial unrest,” Dias added.
When the ESI provisions were first introduced in 1952, the wage ceiling was Rs.400, Dias said. “It took 16 years to get revised to Rs.500; how come the labour ministry is increasing the ceiling by almost Rs.10,000 in just three years,” he asked.
Reddy, however, said that the increase in ESI ceiling will now influence the demand for increasing the minimum wage for getting covered under the employees’ provident fund (EPF).
The current ceiling for mandatory EPF deduction is Rs.6,500 and the demand is for making it at least Rs.10,000.
From India, Bangalore
Dear All,
In a bid to widen the social security safety net, the Labour Minister, Mr. Sis Ram Ola has announced that the people drawing a salary upto Rs. 25,000/- shall be covered under the ESI Scheme.
Currently, the benefit is available to people drawing a salary upto Rs. 15,000/- only.
As per information available, the decision has been taken on Thursday, 19th September 2013.
The last increase in the salary ceiling for ESI was made in May 2010, when it was raised to Rs.15,000/- from Rs.10,000/-.
The move would impact the take home salary of the employees currently in the salary bracket of Rs. 15,000/- to Rs. 25,000/-. Further, it would have an impact of increasing the ESI contribution as well as compliance for the employers.
Lets get ready to increase size of our ESI contribution list
It came into Vijayavani News paper in in Karnataka on 22nd Sept 2013
From India, Madras
In a bid to widen the social security safety net, the Labour Minister, Mr. Sis Ram Ola has announced that the people drawing a salary upto Rs. 25,000/- shall be covered under the ESI Scheme.
Currently, the benefit is available to people drawing a salary upto Rs. 15,000/- only.
As per information available, the decision has been taken on Thursday, 19th September 2013.
The last increase in the salary ceiling for ESI was made in May 2010, when it was raised to Rs.15,000/- from Rs.10,000/-.
The move would impact the take home salary of the employees currently in the salary bracket of Rs. 15,000/- to Rs. 25,000/-. Further, it would have an impact of increasing the ESI contribution as well as compliance for the employers.
Lets get ready to increase size of our ESI contribution list
It came into Vijayavani News paper in in Karnataka on 22nd Sept 2013
From India, Madras
Dear All,
I too heard the same news floating round the corners. just confirmed. It is said that ESIC department is completely ready to take this forward but waiting for the final orders from authorities.
They might get the orders soon..if it happens in October then the increased limit INR 25,000 will be applicable from Oct 2013 or else from Nov 2013. But the hike is too much, it will also affect employees under executive cadre and drawing 20+.
Lets hope some changes happen to this or else get ready to increase the contribution..
Is there any way out to avoid this...
Thanks!
From India, New Delhi
I too heard the same news floating round the corners. just confirmed. It is said that ESIC department is completely ready to take this forward but waiting for the final orders from authorities.
They might get the orders soon..if it happens in October then the increased limit INR 25,000 will be applicable from Oct 2013 or else from Nov 2013. But the hike is too much, it will also affect employees under executive cadre and drawing 20+.
Lets hope some changes happen to this or else get ready to increase the contribution..
Is there any way out to avoid this...
Thanks!
From India, New Delhi
Dear All,
It has been circulating for sometime that an increase in ESI limit was expected.
And as Saunee has stated that the final approval is only awaited.
However on the other side there is news circulating that a proposed hike in PF limit maybe expected of upto 15,000/-..
Can anyone share some info on that subject as well.
As of now no update is given on the bonus limit, if it is proposed to increase as well.
From India, Mumbai
It has been circulating for sometime that an increase in ESI limit was expected.
And as Saunee has stated that the final approval is only awaited.
However on the other side there is news circulating that a proposed hike in PF limit maybe expected of upto 15,000/-..
Can anyone share some info on that subject as well.
As of now no update is given on the bonus limit, if it is proposed to increase as well.
From India, Mumbai
Today ESIC has increased Limit to Rs. 25000/- from Rs. 15000/-. Details are awaited. Pramod Thakar
From India, Pune
From India, Pune
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NOTICE GO 4 ESI LIMIT 15000[1].pdf