STATEMENT ON REDUCTION OF CONTRIBUTION ON ESI

04 July 2019

The TUCI condemns the decision of the Central Government to reduce the rate of contribution towards ESI. No doubt there is at present a reserve of over Rs. 80000 crores with the ESIC. However, this is an illusory surplus. The fact is that though the collection of the ESI is going up and though the number of persons covered has increased massively, the facilities have not kept pace. The number of beds available under the ESI Scheme has hardly grown in proportion to the growth of the coverage. At the same time, the conditions in most ESI hospitals are abysmal and very often even the basic medicines and facilities are not available. This shows that the Government has been using the ESI Scheme as a convenient conduit to collect money which is then lent to Government and state establishments through FDs and bonds at a nominal rate.

The present cut in rates is now an attempt to give further benefits to the corporates in the country. Employers in the country will profit to the extent of thousands of crores of rupees each year by this concession.

The Directors of ESI had suggested that a reduction in the rates be made with the rate for managements being brought down to 4% (from 4.75%) and the rate for employees being brought down to 1% (from 1.75%). However the Government has disregarded this suggestion and reduced the amount to be contributed by managements even further to 3.25%.

The Government’s argument that this is being done for the benefit of the employees so that they can get more carry home wages and that due to the reduction of the burden on the employers more workers will be brought into the formal sector holds no water. If this was the case, the government could well have taken on all the burden upon itself as a social burden. As a principle, TUCI believes that social security is the burden of the employer. It is the employer who was responsible for all Workmen’s Compensation before the enacting of the ESI Act. The State may take over this burden from employer but then this must be recovered by proper taxation of the employers. The present move is merely a further unfolding of the neo-liberal principle whereby the whole of the insurance sector, including for employees, will be handed over to the private sector.

The TUCI calls upon all workers and all democratic individuals and organisations to vigorously oppose this move of the Government which is a step to privatising the future safety and well being of all employees.

Workers of the world unite !

Oppose the move to reduce the contribution to ESI for managements !

We demand proper functioning of all ESI facilities and enhancement of facilities provided !

2429 K2_VIEWS
Kabeer Katlat

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