Employees' State Insurance

Social security scheme in India

Logo of the Employees' State Insurance Corporation

The Employees' State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers. It is managed by the Employees' State Insurance Corporation (ESIC), an autonomous corporation under the Ministry of Labour and Employment, Government of India. The scheme was introduced to provide socio-economic protection to workers in the organized sector and their dependents.

History

The ESI scheme was inaugurated in 1952, following the enactment of the Employees' State Insurance Act, 1948. The Act was the first major legislation on social security for workers in independent India. The scheme was initially implemented in Kanpur and Delhi, and has since expanded to cover millions of workers across the country.

Coverage

The ESI scheme applies to all factories and other establishments with 10 or more employees. It provides coverage to employees earning ₹21,000 or less per month (as of 2023). The scheme is designed to protect employees against financial distress arising out of sickness, maternity, disability, and death due to employment injury.

Benefits

The ESI scheme offers a range of benefits to insured persons and their families, including:

• Medical Benefit: Comprehensive medical care for insured persons and their families.
• Sickness Benefit: Cash compensation during periods of certified sickness.
• Maternity Benefit: Paid leave for insured women during pregnancy and after childbirth.
• Disablement Benefit: Compensation for temporary or permanent disablement due to employment injury.
• Dependants' Benefit: Pension to dependents in case of death due to employment injury.
• Funeral Expenses: A lump sum payment towards funeral expenses of the deceased insured person.

Administration

The Employees' State Insurance Corporation (ESIC) administers the ESI scheme. The corporation is governed by a board of directors representing employees, employers, the central and state governments, and the medical profession. The ESIC is responsible for setting up hospitals and dispensaries, and for ensuring the delivery of medical and cash benefits to insured persons.

Funding

The ESI scheme is funded through contributions from both employers and employees. Employers contribute 3.25% of the wages payable to employees, while employees contribute 0.75% of their wages. The state governments also contribute a share towards the medical benefit expenses.

Challenges and Reforms

Despite its wide coverage, the ESI scheme faces several challenges, including underutilization of services, administrative inefficiencies, and the need for modernization of facilities. Recent reforms have focused on improving service delivery, expanding coverage, and enhancing the quality of medical care.

Related pages

• Social security in India
• Ministry of Labour and Employment (India)
• Employees' Provident Fund Organisation