Is reduction in ESIC contributions in the interest of workers?

Government has amended the ESIC Rules and has notified reduced rates of ESI Contribution applicable for employers (reduced from 4.75% to 3.25%) and for Employees (reduced from 1.75% to 0.75%), with effect from 1 July 2019. Government has justified this amendment saying that this will increase take home salary of employees, reduce the financial liability of establishments and boost further enrolment of employers and workers in ESI scheme. When viewed from the interest of workers, for whose benefit this scheme exists, it is clear that the government action is not in the best interest of workers.

ESI scheme covers employees of the organised sectors who have salaries upto Rs. 21,000/- per month. Insurance cover includes, comprehensive medical benefits including OPD facilities, medicines and specialist treatment on referral, temporary disability benefit, maternity benefit, extended sickness benefit and other benefits. As per the 2017-18 Annual report of ESIC, total number of workers insured stood at 3.43 crores, while the number of family members covered in the scheme stood at close to 10 crores. The total subscriptions collected in the financial year was over 20,000 crore Rupees, the total disbursements for medical and other claims was over 8,000 crores. The total revenue surplus generated was approximately 14,320 crore Rupees.

Thus it can be seen that the scheme is a very important scheme for the workers of organised sector. It is financially stable and has large amount of surplus funds. However, it’s facilities are lacking for the number of subscribers. Just to get an idea, the number of ESI dispensaries where workers have to start their treatment is about 1500. Given that there are over 13 crore covered persons, it means on an average there are over 86,000 people to be served in a dispensary. This clearly shows that the facilities are grossly adequate.

Workers who have tried to get sickness benefit from ESIC know that to get any treatment, worker has to spend the whole day in the dispensary. First there is a queue for registering and getting the papers to see a doctor, then there is a long line for the doctor. Because of acute shortage of doctors, many times workers can wait in the doctor’s line only to find that doctor is no longer available for some reason. They would be expected to visit the dispensary again if they want the treatment. Even after seeing the doctor, they will have to stand in another long line to get medicines. Once again, many times they will find that the medicine prescribed in not in stock.

There is a lot of frustration in utilising the ESIC benefit and lot of workers have given up going to the ESIC dispensaries altogether. What workers want from the scheme is more dispensaries, more doctors, better managed facilities to ensure shorter lines and fast treatment. It means, that the facilities have to be expanded multifold.

The surplus funds available with ESIC should be used to improve these facilities. However, what the government appears to be doing is to give up its responsibility of providing useful service to the workers for which the workers and employers have themselves contributed.

It may be mentioned here that ESIC subscriptions increased markedly when the wage ceiling of coverage was also enhanced from Rs 15,000 per month to Rs 21,000 from January 1, 2017. This resulted in increased funds available for ESIC. These should be utitised to rapidly increase the services by building additional dispensaries and paying doctors and staff well to attract them to the ESIC medical facilities.

With the cutting down of subscription from 6.5% to 4% of workers’ salaries, i.e., by more than a third, subscriptions are expected to yet again increase as more employers will be willing to join the scheme. At the same time, the funds available for providing facilities for workers will start reducing. The facilities are going to become even more stressed and the health and other benefit for workers will become totally unusable for all practical purposes. This shows that the move by the government is against the interest of the workers.

There is another sinister aim in the way Central government is moving with regard to ESIC. Knowing how the Central government has followed policies that has rendered many public sector enterprises sick, so that it can justify handing these over in private hands, it is not far fetched that the government is systematically moving to make the ESIC financially sick. The government in all likelyhood will use the frustration of workers and financial sickness of ESIC to justify handing the hundreds of hospitals and thousands of dispensaries into private hands. Thus, rendering one more asset created to serve the working people useless and altogether depriving them of it by handing the valuable land, buildings and infrastructure to private capitalists.

Government’s policy towards ESIC, once again, shows that the Indian State works to benefit a minority of exploiters at the expense of the interest of working population. It is incompatible with the desire of the people for a society that ensures their prosperity and security. People must not have any illusion about the existing state of the capitalist class and work to usher in a state of workers and peasants, which alone can ensure their prosperity and security of the working people.

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