Dear Friends,
Change the perception
It is probably the world's best and innovative health insurance scheme for working class implemented in India about 64 years ago known as Employees State Insurance Scheme. It provides lot of benefits to workers and their families. The Govt. has ambitious plans to extend its benefits to unorganized sector also. But before spreading wings, Govt. should strengthen its functioning at service level to cater to the needs of present members. which is generally marred due to dual control of state and center. Medical services are provided by states which are far from satisfaction. What are the reasons that a very good scheme with good intent do not draw applauds from the class for which it is aimed at. It needs introspection and issues should be addressed.
BM gathered informal feedback from working class and employers too on the functioning of the scheme when it comes to delivery of medical services. The general perception is that ESI is ill equipped in terms of dispensaries infrastructure, competent doctors and supporting staff availability with positive attitude and access in times of real need. The medical services to working class working in factories and offices cannot be equated with general public health services. Workers need special attention. Moreover, both employer and employee pay for it. Whereas the administrative functioning of the scheme is perceived as satisfactory because of moving to digitalization, medical facilities are perceived as far from satisfaction. Insensitive medical staff, cumbersome procedures and corruption discourage employees from using its benefits to full potential. Claim settlement also needs to be simplified, free from malpractices.
Majority of workers are not even aware of the location of dispensaries and their timings in their areas. Govt. has not been able to keep pace with the growing expectations of working class when it comes to delivery of medical services. On the other hand employers find it complex when it comes to compliance part of the scheme. Conflicting judicial pronouncements make things difficult to understand.
Business environment is dynamic. Processes have changed and way of doing business is constantly changing. Govt. should make efforts to simplify the compliances free from excessive regulating approach with keeping an eye on constantly improving the medical services and attract working people to come and avail benefits.
This issue cover story is on this comprehensive scheme aimed to make it understand in simple way with clarity on complex issues like component of wages, liability in respect of outsourced jobs, situations where accidental benefits are available and overall benefits. The attempt is made to present the entire law in concise form. It has been done to meet the persistent demand of fellow professionals.
Anil Kaushik,
Business Manager -HR Magazine
B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India
Mob. : 09785585134 , 08302173422
Landline:01446550134
Business Manager :: HR Magazine
From India, Delhi
181Change the perception
It is probably the world's best and innovative health insurance scheme for working class implemented in India about 64 years ago known as Employees State Insurance Scheme. It provides lot of benefits to workers and their families. The Govt. has ambitious plans to extend its benefits to unorganized sector also. But before spreading wings, Govt. should strengthen its functioning at service level to cater to the needs of present members. which is generally marred due to dual control of state and center. Medical services are provided by states which are far from satisfaction. What are the reasons that a very good scheme with good intent do not draw applauds from the class for which it is aimed at. It needs introspection and issues should be addressed.
BM gathered informal feedback from working class and employers too on the functioning of the scheme when it comes to delivery of medical services. The general perception is that ESI is ill equipped in terms of dispensaries infrastructure, competent doctors and supporting staff availability with positive attitude and access in times of real need. The medical services to working class working in factories and offices cannot be equated with general public health services. Workers need special attention. Moreover, both employer and employee pay for it. Whereas the administrative functioning of the scheme is perceived as satisfactory because of moving to digitalization, medical facilities are perceived as far from satisfaction. Insensitive medical staff, cumbersome procedures and corruption discourage employees from using its benefits to full potential. Claim settlement also needs to be simplified, free from malpractices.
Majority of workers are not even aware of the location of dispensaries and their timings in their areas. Govt. has not been able to keep pace with the growing expectations of working class when it comes to delivery of medical services. On the other hand employers find it complex when it comes to compliance part of the scheme. Conflicting judicial pronouncements make things difficult to understand.
Business environment is dynamic. Processes have changed and way of doing business is constantly changing. Govt. should make efforts to simplify the compliances free from excessive regulating approach with keeping an eye on constantly improving the medical services and attract working people to come and avail benefits.
This issue cover story is on this comprehensive scheme aimed to make it understand in simple way with clarity on complex issues like component of wages, liability in respect of outsourced jobs, situations where accidental benefits are available and overall benefits. The attempt is made to present the entire law in concise form. It has been done to meet the persistent demand of fellow professionals.
Anil Kaushik,
Business Manager -HR Magazine
B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India
Mob. : 09785585134 , 08302173422
Landline:01446550134
Business Manager :: HR Magazine
From India, Delhi
1. Sir, congratulations for special issue of your HR Magazine on ESI matters. In your note as above, you have raised some important aspects so far as working of Employees' State Insurance Scheme (ESIS) is concerned. The issues raised are such which are pending since long and I feel that there seems to be very less initiative from the appropriate authorities to improve the working of said scheme.
2. However, so far as the administrative side of providing cash benefits is concerned, the working of the ESIC institutions has shown continued improvements since inception of the said scheme. In the beginning there was contribution stamp system, but the same was abolished about more than 31 years earlier. Now, online system of payment of contributions, submission of returns and payments of cash benefits to the insured persons have been introduced and I think, there is hardly any other social security scheme ( excluding medical benefit) which has improved to the satisfaction of its customers.
3. Your observations regarding short-comings in delivery of medical benefit under ESIS are correct. But the position is that there is no alternative for its improvements. Initially ESIS was drafted by Prof. B.P.Adarkar, who was an eminent social security expert and in his report he submitted to the Government of India in the year 1944, he recommended for unification of administrative as well as medical scheme under one authority. But, the Govt. of India allowed dual system i.e. the medical system was made separate and was given to the State Governments. So accordingly, the State Govts., run their ESIS hospitals and ESI dispensaries on the same standard as they are running their civil hospitals and civil dispensaries. Hardlly State Govts. realize that in respect of this scheme, the contributors i.e. poor workers have contributed from their pockets. A majority of State Govts. do not maintain separate accounts in respect of funds received from ESIC for medical facilities and there is hardly any separate system of accountability towards satisfaction of workers in respect of medical benefit (facilities). However, as you may have observed, the ESIC is running ESIS medical scheme in Delhi under its own control and perhaps in Delhi ESIS medical services are more better than other States. In order to improve the medical benefit under ESIS, it is necessary as suggested by Prof. Adarkar, the entire medical benefit should also be under the control and supervision of ESIC. ESIC had started to improve medical services by opening at least one Model Hospital in every State since the year 2002, but such improvements appear to be very minor considering vast infrastructure of ESI Hospitals and Dispensaries in a State.
4. You have also stated that "the Govt. has ambitious plans to extend its benefits to unorganized sector also" and to submit that such like contributory social security scheme are not meant for unorganised sector. In social security scheme like ESIS, there is concept of pooling of resources and risks, which is not possible in vast majority of unorganised sector. There is separate Act titled as "Unorganised Workers Social Security Act, 2008" under which the Central Govt. had made elaborate provisions for welfare of workers of unorganised sector. But since there is hardly any effect of this legislation on welfare of poor workers, the Govt. is now attempting to burden financially sound social security schemes like ESIS. If Govt. is so concerned about welfare of the working class in unorganised sector it must provide social security out of general taxation i.e. from Consolidated Fund of India. Burdening of Social Security Schemes like ESIS to provide benefits to unorganised sector will definitely make this scheme financially unsound in the long run.
5. I may further submit that you may be aware that 2nd National Commission on Labour in its Report, which was submitted to the Central Govt.in the year 2002 had made very good suggestions for improvements in the social security schemes for workers like ESIS & EPF, as well as suggested for consolidation of various labour laws, but I think, the Government has not been in a position to so far make changes / amendments etc. as suggested by said Commission. Therefore, despite of all the recommendations of the Commissions and Experts like Prof. Adarkar, as mentioned by me as above, the scheme is being run half-heartedly and perhaps the Govt. is satisfied with the present situation as mentioned by you. Now, the Central Govt. has come-up with another bill called "Small-Factories Bill" vide which it is suggested to make ESIS and EPF optional in factories employing less than 40 workers. Perhaps, as I understand this is being done to adopt hire and fire policies in factories / labour services and also to adopt a model on the basis of laissez faire policies presently being followed in developed economies like USA.
From India, Noida
2. However, so far as the administrative side of providing cash benefits is concerned, the working of the ESIC institutions has shown continued improvements since inception of the said scheme. In the beginning there was contribution stamp system, but the same was abolished about more than 31 years earlier. Now, online system of payment of contributions, submission of returns and payments of cash benefits to the insured persons have been introduced and I think, there is hardly any other social security scheme ( excluding medical benefit) which has improved to the satisfaction of its customers.
3. Your observations regarding short-comings in delivery of medical benefit under ESIS are correct. But the position is that there is no alternative for its improvements. Initially ESIS was drafted by Prof. B.P.Adarkar, who was an eminent social security expert and in his report he submitted to the Government of India in the year 1944, he recommended for unification of administrative as well as medical scheme under one authority. But, the Govt. of India allowed dual system i.e. the medical system was made separate and was given to the State Governments. So accordingly, the State Govts., run their ESIS hospitals and ESI dispensaries on the same standard as they are running their civil hospitals and civil dispensaries. Hardlly State Govts. realize that in respect of this scheme, the contributors i.e. poor workers have contributed from their pockets. A majority of State Govts. do not maintain separate accounts in respect of funds received from ESIC for medical facilities and there is hardly any separate system of accountability towards satisfaction of workers in respect of medical benefit (facilities). However, as you may have observed, the ESIC is running ESIS medical scheme in Delhi under its own control and perhaps in Delhi ESIS medical services are more better than other States. In order to improve the medical benefit under ESIS, it is necessary as suggested by Prof. Adarkar, the entire medical benefit should also be under the control and supervision of ESIC. ESIC had started to improve medical services by opening at least one Model Hospital in every State since the year 2002, but such improvements appear to be very minor considering vast infrastructure of ESI Hospitals and Dispensaries in a State.
4. You have also stated that "the Govt. has ambitious plans to extend its benefits to unorganized sector also" and to submit that such like contributory social security scheme are not meant for unorganised sector. In social security scheme like ESIS, there is concept of pooling of resources and risks, which is not possible in vast majority of unorganised sector. There is separate Act titled as "Unorganised Workers Social Security Act, 2008" under which the Central Govt. had made elaborate provisions for welfare of workers of unorganised sector. But since there is hardly any effect of this legislation on welfare of poor workers, the Govt. is now attempting to burden financially sound social security schemes like ESIS. If Govt. is so concerned about welfare of the working class in unorganised sector it must provide social security out of general taxation i.e. from Consolidated Fund of India. Burdening of Social Security Schemes like ESIS to provide benefits to unorganised sector will definitely make this scheme financially unsound in the long run.
5. I may further submit that you may be aware that 2nd National Commission on Labour in its Report, which was submitted to the Central Govt.in the year 2002 had made very good suggestions for improvements in the social security schemes for workers like ESIS & EPF, as well as suggested for consolidation of various labour laws, but I think, the Government has not been in a position to so far make changes / amendments etc. as suggested by said Commission. Therefore, despite of all the recommendations of the Commissions and Experts like Prof. Adarkar, as mentioned by me as above, the scheme is being run half-heartedly and perhaps the Govt. is satisfied with the present situation as mentioned by you. Now, the Central Govt. has come-up with another bill called "Small-Factories Bill" vide which it is suggested to make ESIS and EPF optional in factories employing less than 40 workers. Perhaps, as I understand this is being done to adopt hire and fire policies in factories / labour services and also to adopt a model on the basis of laissez faire policies presently being followed in developed economies like USA.
From India, Noida
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