New Inspection Policy – 2014: Another merry playground for Consultants!

(An organisation entrusted with the statutory duty of providing benefits to the voiceless section of the society has to meaningfully activate Sec. 45 and detect the coverable employees and extend them the benefit provisions, in time. It is possible to do so under the existing provisions of the Act. The New Inspection Policy-2014 must be modified accordingly to help advance the purpose of the Act).

Nothing remains constant, including the Inspection Policy in the ESIC. But, when new policies are framed, the elementary requirement in the policy-making division of the authorities is to record the existing procedure and explain how that procedure is wrong, why a change is needed and how it would improve things.

We are not sure whether such exercise had been done in an intensive manner before bringing out the New Inspection Policy. It was a matter of common knowledge that the earlier New Inspection Policy of 2008 was a totally flawed one and was impractical besides inviting ridicule from the employers and staff alike. Details in this regard had been taken to the knowledge of the authorities both from within and from outside. But, nobody was listening. The attitude of self-righteousness had done great damage to the organisation and also to the working population since then. The legal luminary Nani Palkivala once said that the Income Tax Act was the playground for the lawyers and auditors. The consultants who look after the ESIC related work in factories would also say the same thing in respect of the inspection policies of the ESIC.

The details and defects in this inspection policies and procedures had, already, been brought out in the following posts in this website:

But, the present New Inspection Policy goes still further in diluting the responsibility cast on the employers to ensure that the coverable employees are covered in time, on their own.

An employer in Rohini had been regularly paying contribution only in respect of 25 employees, but always in time. He took care to see that he was never in the Defaulters List. As the Sub-Region in charge had a doubt about the constancy in the number of employers, for years, he arranged for surprise inspection by a team of officers. They found that there had actually been 400 employees. Now, the present New Inspection Policy would entrust this analysis to the machine which would only see whether there is 30% variation in compliance meriting inspection. Naturally, the employers like the above mentioned one would be chuckling behind their chairs, when they find this peculiar yardstick entrusted to machines.

Secondly, how can an SSO conduct 20 inspections a month and also feed the data in the System within 3 days of each inspection? Why not he be permitted to send his report to the Regional Office where the staff can be directed to feed the data in the System? Those who issue this kind of instructions must come forward and demonstrate how that could be done. Proper work study is essential before prescribing modified yardsticks, so that the instrutions would command respect.

Thirdly, it is a matter of concern that a direction that invited ridicule among the staff for the past 6 years is continued still, although with slight modification. That is about the certificate insisted upon to be furnished by the SSOs at the close of the financial year. In 2010 also, Para – 11 of the then New Inspection Policy said that a certificate must be given at the end of the financial year that “No coverable unit is left uncovered and no coverable employee is left uncovered in the covered units and all have been issued ESIC cards”. This kind of certificate necessitated confirmation of the position as on 31 March a single day of the year, when the succeeding months of April and May were, funnily,  earmarked for intensive surveys. Now, the latest New Inspection Policy dated 01.08.2014 says, “At the end of the financial year, SSO will give a certificate that “no coverable employees” in the units inspected by him is left unreported in his/her inspection division”. The SSO cannot give a certificate like that unless he visits all the concerned factories once again on a single day at the close of the year. This kind of instructions must be avoided. The SSOs have already given their reports withing 3 days of their inspection. They cannot give any further certificate once again without inspecting the factories, as the change in the number of employees is a daily phenomenon.

Fourthly, in Para – D, it is mentioned that even in the case of non submission of records, only “chronic and wilful” defaulters must be prosecuted. It is not clear what is “chronic and wilful” when the offence has, actually, been committed and the SSO has sent his report with evidence regarding non-production. In the Local Office Manual while dealing with Sec – 84 it has been mentioned that “all” the cases must be prosecuted. Such instruction in para 11.53 of the Local Office Manual is intended to ensure that there is no allegation of discrimination. The word “chronic and wilful” in Para -D is therefore not correct.

Rest, in the next Post!


1 Comment

Filed under Inspections

One response to “New Inspection Policy – 2014: Another merry playground for Consultants!


    I am happy to read the FLOURISHING ESIC after a small break. It is much interesting to know the merits and demerits of the instructions being issued by the higher Authorities.The motive of the certificate being obtained by the SSOs as on 31st March every year is not for the interest of the Corporation but to use for punishing the Poor SSOs in case of necessity.This is rightly pointed out in this post.Further limiting of inspection once 5 years and selection of ledger verification for only 1 year would definitely decrease in the revenue of the Corporation when the development/ expansion on medical side is on full swing.It would be appropriate to increase the no. of strength of the SSOs to the maximum or atleast based on the workload or to fillup the sanctioned strength so that aim could be achieved.
    Uploading of Inspection Report within 3 days would be a painful task to the SSOs when he has to report on the deails of Outside Job as per the existing instructions.This is possible only with the help of employers who readily produced the ledgers with details.It would be much appreciable if everything goes in a smooth manner as expected by the Authorities

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