Beware of the Demolition Squad, Mr. Prime Minister! ESIC is the symbol of Civilisation!!

During a meeting of the ILO in the year 1922, When many other countries had introduced various social security measures the Indian Government was wavering. So one member said that among the civilised countries, India was the only country where there was no social security measure. That was an indication that the world considered social security measures as an index of civilisation. The nature of benefits provided in every country under the Social Security Scheme is the indicator of the degree of civilisation achieved by the people of that county.

When Mr. Joshi, the Indian member heard the aforesaid comment in the world body, he got provoked and said that India would bring in legislation for compensation for employment injury. The Workman’s Compensation Act, came into existence next year in 1923 only because of that promise of Mr. Joshi, the Indian representative, in that world body. That was how India took her first step to enter into the civilised world.

The Royal Commission of Labour which toured India for two years from 1929 to 1931 submitted its report stating that the incidence of sickness was more in India than in any other country and the need for sickness insurance was more in India than in any other nation.

The Beveridge Report

The Committee headed by Sir William Beveridge examined the issues pertaining to labour  for one and a half years and submitted, in November 1942, an exhaustive report which paved way for a civilised society. His report aimed at ‘shaping the economy to serve the people’, while the rich and powerful had vested interest in ‘shaping the people to serve the economy’.

Sir William Beveridge in 1944. He became hero overnight when his report was tabled in the House of Commons in December, 1942. Photo Courtesy: The Guardian, U.K.

Sir William Beveridge in 1944. He became hero overnight when his report was tabled in the House of Commons in December, 1942. Photo Courtesy: The Guardian, U.K.

ESI Corporation was not born in a day. It took more than a year and half for Prof. Adharkar to go through the report of Sir William Beveridge to adapt it to Indian conditions. Comprehensive analysis was made on the issues relevant to our nation. The report was submitted by him on 15.08.1944. Consequently, when the ESI Act was enacted in 1948, the responsibility of running the Scheme was vested in the Government.

Art. 41 insists on “Public” Assistance

The founding fathers had rightly entrusted the responsibility of running the Social Security Scheme to the Government only. That was why Art. 41 of the Constitution directs, as under:

“The State shall, within the limits of its economic capacity and development, make effective provision for securing the right
◦ to ……,
◦ to …………,
◦ to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want”.
The Art. 41, thus, gives direction to the State that in cases of Sickness, disablement and in other cases of undeserved want, the State is to provide “PUBLIC ASSISTANCE” . The State cannot, therefore, make provisions for “private assistance” and wash its hands of the affairs. The responsibility for Maternity relief was placed on the shoulders of the Government only as per Art. 42.

ESIC reviewed repeatedly

The scheme was made operational in 1952. Many Committees had reviewed the ESI Scheme periodically. They were: The ESIS Review Committee (1966), the Estimates Committee of Parliament (1969-70), the Committee on Perspective Planning (1972), the High Powered Committee on Amendments to the ESI Act (1978), the ESIS Review Committee (1982), Committee on Perspective Planning (1993) and The Report of the Working Group on Social Security for the Tenth Five Year Plan (2002-2007). The meeting of this Working Group said, as under in its Minutes dated 03.07.2001:

“There is need to take new initiatives to extend the spread and reach of the existing social security schemes being administered by the Employees’ State Insurance Corporation and Employees’ Provident Fund Organisation.“

Six Principles of Beveridge

Beveridge had codified Six Principles of Social Insurance. Two among them were the element of compulsory contribution from each insured person and his employer and the “Unification of Administrative Responsibility” through a single Social Insurance Fund. The report of Prof. Adharkar also emphasised the same. The Scheme in India is run by the Government to assure the insured population and the employers that the funds would be managed as per rules, the scheme would be run corruption-free and the defaulting employers and erring employers would be penalised by the State itself. That was a guarantee to other employers and employees that there would be equality in applying law. The grievance redress mechanism under any Government would be open and transparent.

Best financial management in ESIC

The Scheme had been run in a satisfactory manner, in spite of many negative actions of the corrupts and zombies, within the organisation and in the enforcing machinery of various State Governments. If the political leaders had been more committed in the welfare of the people, the Scheme could have done much better. Even in spite of all the pitfalls, the Scheme had been better managed financially than any other public sector autonomous body until the year 2007. Better than private units. The Economic times 05.02.2003 would testify to it.

Economic Times 5 2 2003 copy

Overbearing and misguiding bureaucracy

Any dilution of the the scheme would be challengeable successfully in Court of Law and would expose the Government having fallen victims to the misleading notes of the bureaucrats. Politicians falling victims to the bureaucracy had been brought out very clearly in the famous serial ‘Yes, Minister’. Indian scenario is not different in any manner. Occasions are numerous when the elected Ministers just sign on files as desired by the bureaucrats. India has seen many bureaucrats becoming Ministers and Prime Ministers too, only because the elected politicians could neither understand nor cope with the tactics used by the bureaucrats to bend them to the will of the latter.

During the discussion in the House of the People on 23.03.1992, Mr. A. B. Vajpayee blamed that the bureaucrats were more responsible for creating economic crisis than the political leadership. His statement is one of the many evidences available to prove that the Ministers are led and are not obeyed by the bureaucrats.

The following are the excerpts from the Indian Express dated 24.03.1992:
“Mr. Vajpayee hit out at the bureaucrats, five or six of them, who kept shuttling between the Prime Minister’s office, the North Block and the Planning Commission, and also the IMF, and said they were more responsible for creating the current economic crisis than the political leadership. These officers should not be entrusted with negotiating the Dunkel proposals at the GATT meetings, he cautioned”.

Intention is only to “reduce” benefits 

Private players are free to provide any kind of benefit that matches and surpasses the ones provided under the ESI Act. There is no need for any adventurous dilution of the provisions of ESI Act. There must be proper in-depth study before embarking on any such adventures. If needed, even a pilot project can be formulated and tested. The international experience on such privatisation must be examined. The information already received by the ILO on this issue was only in the negative about such privatisation. There should, therefore, be no reliance only on the filenotings of the bureaucrats to tamper with the existing system just in order to facilitate private players in social insurance. That would result in the private players playing havoc with the living conditions of the working population.

They enter into this field to make money, to prepare profit and loss account while the ESIC as a State machinery prepares Income and Expenditure account. Any hasty measure to allow private players by diluting the provisions of Exemptions under Sec. 87-91 would, clearly, prove that the intention of the rulers is only to reduce the quantum of benefits that are made available now to the working population in the organised sector.

Customer Satisfaction Survey

The Government of Gujarat had conducted a Customer Sastisfaction Survey among the public when Mr. Narendra Modi was Chief Minister of Gujarat in the early 2000s about the services rendered by various departments, as informed by Shri Hasmukh Adhia, IAS, Secretary, Administrative Reforms & training and Director General, SPIPA, Government of Gujarat, during his lecture in the Indian Institute of Managment, Ahmedabad.

Similar survey proposed in the year 2006 in the ESIC had not materialised. One such survey among the beneficiaries of the ESI Scheme would not be out of place, now, before venturing on misadventures. Gujarat Gas Company Limited conducted Customer Satisfaction Survey to understands its own strength and weaknesses.

Slide1

It was adjudged the best managed company of the year 2004-05 by the Business Today.

Slide2

Beveridge worked hard and conducted extensive study on various issues for one and a half years to prepar his monumental document and when it was made public,  he became a national hero overnight in the United Kingdom. In India, the bureaucrats do not show any intention to study the issues and impacts by conducting any study but work hard to demolish the scheme overnight.

A cursory survey had been conducted in Mumbai once in the 1990s. It showed that 85% of the employers wanted the scheme while 85% of the employers did not want it. The Regional Directors of Maharashtra would testify to it. So, any radical change in the concept and structue must be preceded, necessarily, by proper study and analysis from all angles.

ESIC can work wonders

We reiterate that as far as the ESIC is concerned the System is correct but the men need to change their attitude. That can be done, when the political leadership is committed to run the Scheme corruption-free. When done, ESIC can work wonders for the improvement of the nation’s economy and prove to the world that our nation is really a civilised nation.

What is more, India can even surpass many nations and reach the top in the Human Development Index. The Scandinavian countries top the Index at present, only because of social security measures which are run corruption-free. That is civilisation.

For more, read ‘Barbarism and Civilisation: History of Europe in our time – Bernard Wasserstein. 

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