The policy of the Corporation in granting exemption under section eighty seven and ninety one of the Act

 

The Corporation at its meeting held on 12th Sept 1985 implanted a sub-Committee under the chairmanship of Miss Meera Seth, Addl. Secretary, Ministry of Labour to look at the policy of the exemption.

The Sub-Committee after careful consideration of all pros and cons of exemption had opined that any liberalisation of exemption policy wouldn't solely be contrary to the ideas of Social Security however additionally against the objectives of the ESI scheme and against the larger interest of the staff themselves. The Sub-Committee was, therefore, not in favor of granting exemption from the Act at all to any manufacturing plant or institution.

(i) Whereas Section 87 permits grant of exemption for a period not exceeding one year at a time, no such time limit has been specified for exemptions granted under Section 88 and 90 which may be specified, and

 

(ii) The conditions of superiority or similarity of benefits as stipulated under Section 90 may also be stipulated as one of the conditions for grant of exemption under Section 87. The Recommendations of the Sub-Committee were accepted by the ESI Corporation at its meeting held on 20th February 1986.

 

1. Extension of ESI Scheme to new sectors of employment

The Committee on Perspective Planning (1972) of the ESI Corporation which had been appointed, inter-alia to work out a viable program for phased extension of the Scheme, had formulated the following criteria for extension of the Scheme to a larger cross-section of wage earners:-

 

(a) Need for health insurance protection;

 

(b) Feasibility of building upon expanding viable medical facilities; and

 

(c) Amenability of the establishments to enforcement by the Corporation.

Applying the above-mentioned criteria, the Committee came to the conclusion that extension of the scheme should be accomplished in three phases, as given below:-

 

(i) In the first phase, factories run with power and employing 10 to 19 workers; factories run without power employing 20 or more workers and shops, cinemas including preview theater, road motor transport undertakings, and newspaper establishments, hotels, and restaurants employing 20 or more workers are to be covered.

 

(ii) The organized mines and plantations might be covered in the second phase. In the case of mines and plantation, the recommendation of the Committee was to extend the Scheme only partially i.e. only the cash benefits might be provided since medical care was already available to the workers free of cost.

 

(iii) The unorganized or semi-organized sectors about which accurate statistical data is not available would come later in the third phase.

 

In pursuance of the above recommendations, an extension of the scheme to the categories of establishments included in the first phase has already been carried out. Further, the threshold for

coverage of factories has been reduced from 20 to 10 or more persons irrespective of whether power is used in the manufacturing process or not. The scheme has also been extended to educational institutions in 20 States/UTs and to private medical institutions in 18 States/UTs. Seventeen (17) State Governments have also reduced the threshold for coverage of shops and other establishments from 20 to 10 or more persons.

 

A provision has been made in the Act vide Employees' State Insurance (Amendment) Act, 2010 under which medical care from underutilized ESI Hospitals can be provided to other beneficiaries on

payment of user charges.

 

2. Provision of social security for workers in the unorganized sector

Out of the total workforce of about 459 million in India, 27.55 million workers are in the organized sector, (17.67 million in the public sector, and 9.87 million in the private sector) and the rest are in the unorganized sector. The ESI Act covers workers in the organized sector only. At present, about 15.5 million workers (i.e. 56.26% of the organized sector) are covered under the Employees' State Insurance Act, which represents only about 3.37% of the total workforce in the country. The remaining workers in the organized sector to which the ESI Act does not apply remain outside the social security umbrella due to the following reasons:-

 

(i) Employees of Central and State Govts. Who are provided social protection under the rules of the

respective Governments;

 

(ii) Workers of factories/establishments employing less than 10 persons.

 

(iii)Workers of factories/establishments situated in the non-implemented areas, where the ESI Scheme has not been implemented;

 

(iv) Workers of seasonal factories/establishments;

 

(v) Workers drawing wages exceeding Rs.15,000/- per month.

 

• The workers employed in the organized sector and working in the smaller factories and establishments can be brought under the ESI Scheme by gradually lowering the threshold limit for coverage under the ESI Act. Likewise, the workers who are drawing wages above the wage limit
• Rs.15,000/- per month can be brought under the ambit of the ESI Scheme by enhancing or removing the wage limit altogether. Vide ESI (Amendment) Act, 2010, the threshold limit for coverage of factories has been brought down to 10 or more persons irrespective of whether power is used in the
• manufacturing process or not. Seventeen State Governments have also reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Rest of the State
• Governments are also in the process of doing so. Many State Governments have also extended the
• provisions of the Act to educational and private medical institutions. Factories and establishments located in non-implemented areas having a sufficient concentration of workers are being brought under the ESI Act gradually as per the phased program drawn in consultation with the State Governments.

 

As the ESI Scheme framed under the ESI Act, 1948 provides a uniform package of benefits at a

uniform rate of contribution; and employer-employee relationship is a pre-requisite for extension of the scheme is not suited for an extension to workers in the unorganized sector in its present form.

However, as per amendment in the ESI Act, 1948 w.e.f. 01/06/2010 vide ESI (Amendment) Act, 2010, medical benefit under the scheme can be extended to other beneficiaries on payment of user charges subject to the framing of schemes by the Central Government. Further the Govt. of India, Ministry of Labour & Employment has introduced a Scheme called "Rashtriya Swasthya Bima Yojana" for providing social security to BPL (Below Poverty Line) persons/families in the unorganized sector.

 

3. Amendments in the ESI Act vide ESI (Amendment) Act, 2010

The ESI Act, 1948, has been amended vide ESI (Amendment Act, 2010 w.e.f 01.06.2010. The

Salient features of the Amendment Act are as under:-

 

Facilitating coverage of smaller factories employing 10 or more persons.

 

Enhancing age limit of dependent children for eligibility to dependants benefit from 18 years to 25 years.

 

Extending medical benefit to dependant minor brother/sister in case of IPs not having their own family and whose parents are also not alive.

 

Streamlining the procedure for assessment of dues from defaulting employers (time limit of 5 years for assessment).

 

Providing an Appellate Authority within the Corporation against the assessment to avoid unnecessary litigation.

 

Continuing medical benefit to insured persons retiring under the VRS scheme or taking premature retirement.

 

Treating commuting accidents as employment injury.

 

Opening of medical/dental/paramedical/nursing colleges to improve the quality of medical care.

 

Making an enabling provision for extending medical care to other beneficiaries against payment of user charges to facilitate providing of medical care from underutilized ESI Hospital to the BPL families covered under the Rashtriya Swasthaya Bima Yojana and other schemes framed by Central Government.

 

Reducing duration of notice period for extension of the Act to new classes of establishments from six months to one month.

 

Empowering State governments to set up autonomous Corporations for administering medical benefits in the State for bringing autonomy and efficiency in the working.