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ABOUT ESI SCHEME –INDIA

The promulgation of Employees' State Insurance Act, 1948(ESI Act), by the Parliament was the first major legislation on social Security for workers in independent India. It was a time when the industry was still in a nascent stage and the country was heavily dependent on an assortment of imported goods from the developed or fast developing countries. The deployment of manpower in manufacturing processes was limited to a few select industries such as jute, textile, chemicals etc. The legislation on creation and development of a fool proof multi-dimensional Social Security system, when the country's economy was in a very fledgling state was obviously a remarkable gesture towards the socio economic amelioration of a workface though limited in number and geographic distribution. India, notwithstanding, thus, took the lead in providing organized social protection to the working class through statutory provisions.

The ESI Act 1948, encompasses certain health related eventualities that the workers are generally exposed to; such as sickness, maternity, temporary or permanent disablement, Occupational disease or death due to employment injury, resulting in loss of wages or earning capacity-total or partial. Social security provision made in the Act to counterbalance or negate the resulting physical or financial distress in such contingencies, are thus, aimed at upholding human dignity in times of crises through protection from deprivation, destitution and social degradation while enabling the society the retention and continuity of a socially useful and productive manpower.

HISTORY

The scheme was inaugurated in Kanpur on 24th February 1952 (ESIC Day) by then Prime Minister Pandit Jawahar Lal Nehru. The venue was the Brijender Swarup Park, Kanpur and Panditji addressed a 70,000 strong gathering in Hindi in the presence of Pt.Gobind Ballabh Pant, Chief Minister Uttar Pradesh; Babu Jagjivan Ram, Union Labour Minister; Raj Kumari Amrit Kaur, Union Health Minister; Sh.Chandrabhan Gupt, Union Food Minister and Dr.C.L.Katial, the first Director General of ESIC.The scheme was simultaneously launched at Delhi as well and the initial coverage for both the centres was 1,20,000 employees. Our first prime Minister was the first honorary insured person of the Scheme and the declaration form bearing his signature is a prized possession of the Corporation.

It is important to mention here that it blossomed as the first social security scheme in 1944, when the Govt. of the day was still British.The first document on social insurance was "Report on Health Insurance" submitted to the Tripartite Labour Conference, headed by Prof. B.P.Adarkar, an eminent scholar and visionary. The Report was acclaimed as a worthy document and forerunner of the social security scheme in India and Prof. Adarkar was acknowledged as "Chhota Beveridge" by none other than Sardar Vallabhbhai Patel. Sir, William Beveridge, as all know, was one of the high priests of social insurance. The report was accepted and Prof. Adarkar continued to be actively associated with it till 1946. On his disassociation he strongly advocated management of the Scheme by an expert from ILO. In 1948 Dr. C.L.Katial, an eminent Indian doctor from London took over as the 1st Director General of ESIC and he steered the affairs of the fledgling Scheme till 1953.

Since the red letter day of 24th February in the annals of social security in India , there has been no looking back. A lighted lamp which is the logo of ESIC truly symbolises the spirit of the Scheme, lighting up lives of innumerable families of workers by replacing despair with hope and providing help in times of distress, both physical and financial.

During the 67 years of its existence, ESIC has grown from strength to strength and the Corporation owes it, most of all, to the commitment, dedication and perseverance of persons like Prof. Adarkar and Dr. Katial.

INTRODUCTION TO ESI SCHEME IN KERALA

The ESI Scheme was first implemented in the State of Kerala on 16.9.1956 in seven centres in the Revenue Districts of Kollam, Alleppey, Aluva, Ernakulam and Trichur and Kozhikode. Gradually the scheme was implemented from time to time in all the major centres covering the entire 14 districts in the State. With effect from 01.02.2017 the goal of total implementation was accomplished.

Initially factories employing 20 or more persons for wages and using power in the manufacturing process alone were brought under the provisions of the Act under Sec. 2(12) of the ESI Act. Subsequently, the scheme was extended under Section 1(5) of the ESI Act to other classes of Establishments viz, Shops, Hotels, Restaurants, Road Motor Transport Establishment, Cinemas including Preview Theatres and Newspaper Establishments in the state with effect from 30.03.1975. 

Further, the number of employees for applicability of coverage under Section 2 (12) in factories using power was reduced from 20 to 10 w.e.f. 20.10.1989.  ESI Scheme has been extended to Medical Institutions & Educational Institutions with effect from 06.09.2007 and 08.10.2007, respectively under Sec 1(5) of the ESI Act.

With effect from 01.06.2010, the applicability of ESI Act has been changed and now factories employing 10 or more persons are coverable irrespective of whether power is used in the manufacturing process or not and wages is payable or not. With effect from 28.06.2011, the Act has further been extended as per section 1(5) to the establishments wherein 10 or more persons are employed on any day during the preceding 12 months.

ADMINISTRATION

The Hqrs. of ESI Corporation is located at New Delhi and has 69 field offices which includes 24 Regional Offices, 40 Sub-Regional Offices, 2 Camp Offices and 3 Liaison Office throughout the country. Besides, these are 630 Branch Offices and 185 Pay Offices.

In Kerala we have One Regional Office at Thrissur headed by Additional Commissioner and Regional Director and 4 Sub Regional Offices at Kozhikode, Ernakulam, Kollam and Thiruvananthapuram each. These SROs are headed by Deputy Director in charge.

There are 54 Branch Offices and one DCBO (Dispensary cum Branch Office) through which various benefits are disbursed to the IPs. Medical side is looked after by State Govt through DIMS with 146 dispensaries and 9 ESIS Hospitals across the State. There are 3 ESIC run hospitals located at Udyogamandal, Ezhukone and Model Super Specialty Hospital at Asramam. These hospitals are under the direct control of HQs office and are run by Medical Supdts.

FINANCE

The ESI Scheme is financed mainly by contributions from employers and employees. The rate of contribution by employer is 4.75% of the wages payable to an employee and the employees’ contribution is 1.75% (3% and 1% wages in respect of employers’ and employees’ contribution in new areas where the Scheme is implemented for the first timew.e.f 06.10.2016 for a period of 2 years). In Kerala the period of reduced contribution is from 1.2.17 to 31.1.19.During the initial period of 3 years after implementation the total expenditure will be borne by corporation.

              The expenditure on provision of Medical Care (except in Delhi and dispensaries in Noida (U.P) where the scheme is directly administered by the Corporation) is shared between the Corporation and the concerned State Governments in the prescribed ratio of 7:1.

The maximum sharable amount is subject to the ceiling fixed by the Corporation from time to time. ESI Corporation presently has fixed the per capita ceiling of sharing expenditure with State Govts. u/s 58(3) of ESI Act, 1948 at Rs.3,000/- per Insured Person with sub ceiling of Rs.1,250/- for Administration and Rs.1,750/- for Others for the year 2018-19. The ceiling will be reviewed annually from 2020-21 on the basis of WPI and expenditure pattern of the States.

The ESI Scheme came into existence in Kerala on 16 September 1956. The Regional Office of the ESI Corporation in Kerala is at Thrissur. Until September 2005 there had been only  Regional Office in Kerala.

Considering the increase in the number of employers, employees and Insured Persons covered by the ESI scheme and with a view to giving better service to them, one by one Sub Regional Offices were opened at Kollam, Ernakulam, Kozhikode and Thiruvananthapuram. Presently there are about 5770 employers and 176360 Insured Persons within the area covered by the  Regional Office, Thrissur.

The following Branch Offices are functioning under the Regional Office:

1. Thrissur
2. Ollur
3. Alagappanagar
4. Irinjalakuda
5. Chalakudy
6. Koratty
7. Shoranur
8. Palakkad
9. Kanjikode

In addition, 22 Dispensaries and 3 Hospitals run by the state government - at Olarikkara,Mulankunnathukavu and Palakkad - also function under the Thrissur Regional Office.

Last updated / Reviewed : 2019-11-28