Run the ESIC corruption-free! Do not run down the ESIC!!

“What ideas individuals may attach to the term “Millennium” I know not; but I know that society may be formed so as to exist without crime, without poverty, with health greatly improved, with little, if any misery, and with intelligence and happiness increased a hundredfold; and no obstacle whatsoever intervenes at this moment except ignorance to prevent such a state of society from becoming universal.”


Robert Owen, 1.1.1816 when he opened the

Institute for the Formation of Character.


The ideal of all matured human beings would only be to see a society that is free from poverty, ill-health and crime so that human potential is allowed to develop in a positive manner increasing the happiness of the living beings all around. In this backdrop, the organisations that provide variety of social security measures to the humanity play a pivotal role. In the Indian context, the ESIC provides and is intended to provide an unmatched security-net to the insured population.

But, with the assumption of power by the BJP, there are many forces acting from within the ESIC and the Ministry of Labour to sabotage the noble scheme. While there can be no arguments for status quo, or to justify the status quo, the steps taken to bring changes must be to improve the social security measures and not to expose the ordinary people to money-sharks in the medical insurance sector. But, the politicians find it irresistible to yield to the moneybags. So, acton is being taken by some people in power to dilute the benefits provided by the ESIC and make it easier for the moneybags to poach into the territory of the ESIC to make money for themselves and for the politicians who yield to their pressure.

Private sharks are compelling the persons in power to introduce exemption clause for pre-existing diseases in the ESI Act too so that they can loot the common people easily.

Are the politicians in power going to yield? Will the bureaucrats sit up, take notice of the evil designs of those private sharks and stand up agains the politicians who work for the welfare of those sharks?

Politicians and Bureaucrats nexus

The simple question is that what is better for the well-being of the humanity must be allowed and encouraged to prevail. And that decision should not be left to a few ministers and bureaucrats only. There must be proper discussion beforehand with all the stakeholders. Our experience shows that the MPs who were required to analyse the issues deep had abdicated their responsibility when the Amendments to the ESI Act were brought in, in the year 2009 / 2010. They did not, simply, care. They did not want to know. The Ministry of Law had behaved in a peculiar manner by clearing the proposal for large scale amendments with scanty analysis. The Parliamentary Standing Committee of Labour had allowed itself to be hoodwinked by the bureacrats. What is more, the CAG who comes in after everything is over has also not done his work properly, when he presented his report of 2014. He did not probe into the construction matters.

Private players are welcome even now

There is no law which denies private players enter into the field of Social Security even now. Already, in the year 1980 itself, the NIIC started certain schemes to introduce PTDB, PPDB, etc., Even they wanted to be housed near ESIC office in Maharashtra so that they could canvass the insured persons covered under the ESI Act. But, they could not find their attempts attractive.

When we talk of privatisation of social security, we must, first of all, know whether it is a service or business.

  1. If this is considered as service, the private players have, practically, no role in it.
  2. If it is considered as a business, there is no need for any new legislation to permit or prevent them.

Corruption of private players in Life Insurance Sector

LIC was not brought into existence, in the year 1956, to do business. It was brought into existence to prevent the private players from continuing with their malpractices. The main intention of nationalisation was to provide “Complete security to policyholders” and to “Conduct the business with the utmost economy and with the full realization that the money belonged to the policyholders.” Because, the mismanagement and malpractice by the private players “had lead to liquidation of as many as 25 life insurance companies in the decade after independence. Another 25 insurance companies had during the same period so frittered away their resources that their business had to be transferred to other companies. All these cost financial losses and consequent suffering to several policyholders who had entrusted their hard earned saving to the care of the company management. This misuse of power, position and privilege by these companies in the private sector was one of the most compelling reasons that influenced the decision of the government of India to nationalize the life insurance industry in 1956.”

Our experience with private corporate service providers

 The issue is whether we have any intention to learn anything from history, both past and contemporary. The ESI Corporation is meant to provide security-net to the lower strata of the society.

Private Bus transports

What is the experience of the common people with the long distance private bus transporters? Do they have any intention to serve villages? Do they not concentrate only on connecting cities?

Even within Delhi, do we not find that. It is left only to the public sector DTC to ply buses during the off-peak hours in the early mornings and nights, while the peak hour is the only preferred hour for private operators?

Private telecom service providers

It was only for the purpose of favouring the private players in the mobile telephony segment, the BSNL was not allowed to enter into that area for long. It was the strident fight of the employees that enabled the BSNL to enter into Mobile market. What is our experience with the BSNL and the private telecom service providers? What is our experience with the grievance redressal system of the private service providers who are invisible when you want to talk to them? One-sided phone calls which can ask you for money and other details but you cannot talk back. Once you complain to somebody, even if you talk back after one minute, you will talk to somebody else and not the same person. They choose to remain invisible when receiving complaints. There is no scope for meeting any person who has some authority at least to deal with the issue. But, you have RTI weapon when it comes to BSNL.

RTI only for BSNL and not for other private players

Is there any private telephone service provider who is governed by the provisions of the Right to Information Act, 2005? (More on the role of politicians and top level bureaucrats to corrode the BSNL from within can be seen in the article: )

Private Hospitals vis-a-vis Leprosy and TB

How many private corporate hospitals treat patients suffering from T.B or Leprosy?

ESI Corporation can honestly throw a challenge to the private operators, if need be. No private corporate player can afford to provide the cash benefits that are extended by the ESIC. Moreover, the proprietary interests of the private players and the resultant harassment faced by the working population are on record as could be seen from the “Oxford Book of Legal Anecdotes – Michael Gilbert”. No common man in India can afford to fight against such injustices inflicted by the private operators. ESIC is kindness inbuilt. This is a public trust with no proprietary interest. If the ESIC is allowed to co-exist with the private players, if anybody’s ideology necessitates allowing such private players, it can be proved within a short time that nobody can surpass ESIC then too.

Social Security and the USA

Franklin D Roosevelt, in his message to the Congress in 1934, felt that the first objective of any nation would be the security of its men, women and children. That this security is provided mainly through the Social Security measures implies that the governments have the primary role in providing that security and it cannot be subjected to the commercial interests. Franklin D. Roosevelt said, while signing the Social Security Act, on 14th August, 1935, that Act was, “in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”

“The threat to stability of Social Security has been apparent for decades. For years, political leaders have agreed that something must be done… We can postpone action no longer. Social Security is a challenge now; if we fail to act, it will become a crisis. We must save Social Security and now have the opportunity to do so.” – President George W. Bush – May 2, 2001.


In India, the Centre has not so far given any amount as Grant to the ESIC. The experience of Peru, the only country that ventured to privatise social security was not an example to be emulated but a warning. “Some of the PAYG (Pay As You Go) systems distribute their benefits very inequitably. Since most Latin American countries rely or relied heavily on indirect taxation to subsidize social security benefits, the poor contribute disproportionately to services they probably will never receive.” (Partial) Privatization Social Security: The Chilean Model – A Lesson to Follow?Roland Eisen.

The scheme must be run only by government so that there is a larger base

 The ESI Scheme in India which collects only 1.75% of wages as Employees Contribution is still viable for almost 6 decades without any assistance from Central Government, only because it is compulsory and also because the field of dispersal of benefit load is larger. This is in sharp contrast to the position obtaining in smaller countries where the employees contribution is much more, ranging from 27 in Germany to 69-73% in Scandinavian countries.

 Corruption is the main problem in India

Maintenance of toilets in bus stands has been privatised for long. What is our experience with those toilets under private managements? Can the officials in charge have any control over their activities of these private players, who are the source of ill-gotten money for the politicians. People suffer in silence every day in every bus stand, only because of corruption, both political and bureaucratic. Our nation must demonstrate that it could do, at least, smaller things efficiently in a corruption-free manner.

If the persons in power can ensure a corruption free society, then social security provided by the ESIC need not be privatised.

If they cannot put in place a corruption free society, then social security provided by the ESIC should not be privatised.

Non provision of Primary Care is a real threat

Non-attention to Primary Care in the nation is a real threat to the ESIC in providing even Primary Healthcare. Health services in India are provided through a three-tier setup namely primary, secondary and tertiary. Primary care is the healthcare provided at the primary level of care, which is the first level of contact of the community with the health system. Cases which are more complex and need specialised care are referred to the secondary (District hospital) and tertiary level (Regional and national hospitals).

Primary Health Care was accepted as the best approach to achieve the goal of ‘Health For All’ in the Conference of the World Health Organisation held at Alma Ata in 1978. ‘Health For All’ is defined as an attainment of a level of health that will enable individuals to lead a socially and economically productive life. ‘Health For All’ was envisioned to be attained in the year 2000.

The fundamental focus of this approach is on universality, comprehensiveness and equity in health. There is an intricately intertwined relationship between Primary Care to be provided to all and the Primary Healthcare to be provided by the ESI Corporation to the persons covered under the ESI Act. Non-observance of the medical requirements by the poor affects the rich directly in the long run. It is, therefore, in the self-interest of the rich to care for the poor.

For the success of the ESI Scheme, Prof B. P. Adarkar wanted the certain extra measures to be taken. His stand was that the ESI Scheme should not be “saddled with burdens legitimately belonging to other branches of social insurance”. He made four assumptions for the success of the ESI Scheme. They were

(a) the adoption of a scheme for Unemployment Insurance and creation of new employments in the post war period,

(b) the establishment of a scheme of Old Age Pension,

(c) the adoption of certain pre-medical measures like education in health and improvement in environment hygiene besides regulation of wages and rigorous enforcement of factory laws and finally

(d) a National Health Drive.

So, it is in the interest of the ESIC also to influence the Governments at the Centre and in the States for a National Health Drive to focus attention on Primary Care.

The political costs of inequality are recognized and accepted as being too high. The economic costs of fighting the effects are also high. Citing some research, the BBC also noted that for each dollar spent on poverty causes, seven dollars were saved on consequences.”


 The intention of the government must be to ensure proper medical care to the public through public sector.


Paul Krugman

The present attempts at weakening the ESIC and diluting its benefits with the aim of enabling the private players to poach into the territory of the ESIC is anti-common man. The ESI Scheme can ensure tremendous success, if only there is intense desire to run the scheme corruption-free.





Filed under Amendments 2010, Benefits

4 responses to “Run the ESIC corruption-free! Do not run down the ESIC!!

  1. maragatha sundari

    Even ODC center in the ESIC provides specialized treatment for suffering working population with referral procedure to other Hospitals without charging single penny from the employees without specification of limits for the treatment for self and the family. this type of non committal ceiling for treatment is not available with the private insurance schemes.


    The Finance Minister has proposed the following in his Budget Speech.
    1. Option of employees’contribution for low paid employees covered under
    EPF scheme.
    2. Optional Health Insurance for employees covered under the ESI Scheme.

    The logic behind the existing employees’contribution was mainly due to the reason that the employees covered under the scheme should be able to claim the available benefits as a matter of right and not as a dole from the Govt agencies which no person with self respect like to claim. Further it will lead to more corrupt practices if the scheme runs without contribution from the employee. The contribution will also be a saving for the employee which normally a person will not save if there is no compulsion. The Govt should have a second thought before it makes it optional for the low paid employees.

    The proposal to give option under ESI Scheme may prove disastrous for the employees covered under the scheme and as well to the employers.

    Any private insurance player cannot provide the primary,secondary
    and tertiary medical care which which ESIC is providing for the contribution
    which is provided under the ESI Act without getting any assistance from
    the central Govt. The Medical Care is vastly improved with ESIC running
    Hospitals directly under its control,many of which are even centrally air conditioned and match with any corporate Hospitals. Further under the scheme there is tie up with many known private Hospitals for Super speciality treatments. There will not be any indefinite waiting period for
    any procedure to be done. Today a TV channel was showing a case
    where a patient at AIMS Delhi having given date in 2021 for performing Heart Valve Surgery.

    The assumption that private players will provide better medical
    care for the contribution which is payable under the scheme will be a
    myth. Remember that the benefits provided under the scheme are given
    if the contributions are payable even though they might not have been paid
    by the employer. This cannot happen with private players. I have seen
    that the private insurance players which are covering employees with lucrative jobs specially IT employees, are providing only inpatient treatments with hefty premiums and ceiling of around three lakhs max. They even disallow many items of expenditures and make employees to pay.

    Making the ESI Scheme may not be a solution and put low paid
    employees in difficulties specially in Metro Cities where getting OPD treatment is beyond reach of even well paid employees. Govt can think of
    making the scheme more efficient by deploying efficient,dynamic and
    honest officers who can do wonders with infrastructure available at their
    disposal instead of making it optional, which may not be viable.

    In addition to the the medical care ESI Act provides for host of Cash Benefits and also absolves the Employers of liability under Workmens’ Compensation Act and Maternity Benefit Act. Any accident in small or
    medium industry may result into closure of the factory itself because of
    liability under the Workmens’ Compensation Act.

    Hope better sense will prevail on the Employers, Employees and the

  3. Ramakrishnan

    I fully ednorse the views expressed by Mr Janvekar. I wonder, why atleast the educated section of workers in various industries across the country and their trade Unions have not started thinking about impending dangers of the Budget proposal; lacking in clarity and the positive side of the service rendered by ESIC. I urge the Government of India and State Govts. to make the ESI Scheme more attractive and efficient in the interest of workers and root out all corrupt elements that will be a bane for the scheme and think of eliminating wasteful expenditure.

  4. ganesalingam shenbagam

    millions of working class and middle class people are getting very good medical treatments and benefits through ESIC Scheme all over India.It is really a shock news and totally unfair to handover the ESIC hospitals to the private organisations. I request the Honorable Mr. Modi’s government that ESIC scheme should not be made optional. And the ministry of labour need not run medical colleges by using employees and employers money..the affected medical students may be tranfered to the state government hospitals. At any cost the the INSURED PERSONS Proudly called “IP” nad his valuable family members should not get affected. -By GANESALINGAM SHENBAGAM, Chennai

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