Category Archives: Administration

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.


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


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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E.S.I.C’s employees and Hannibal’s soldiers !

It was 1990. A woman employee of the Bureau of Indian Standards reached the bus stop at about 7.45 am in Noida Sector 22. Her neighbour, a Section Officer of the ESIC, was standing there already, waiting for bus to go to his office. The offices of both were and are in the same locality, in New Delhi-2.

That ESIC officer, a man from Orissa, was a very sincere and punctual officer. He was very surprised to see that woman employee of the BIS at that time of the day there. He asked her where she was going. She replied that she was going to her office. That reply stumped the ESIC officer. “Madam, how come, so early? You used to move for office only at about 11 am everyday!”. That woman poured out her grievance. “What to do, Sir? One man has come to our office as DG. He is from military. Totally merciless. He is marking our absence and debiting our leave accounts everyday. How much can I lose? It is very difficult for me to go to office so early. Still, I have to go…..”. She went on justifying her priorities and scolding the new unsympathetic Director General stating that he did not understand the problem of womenfolk who had to look after all the house-hold chores.

Yes. The BIS got Lt. Gen. H. Lal, a Param Vishisht Seva Medalist, as its Director General. He studied, for a few days, the situation prevailing in the BIS and diagnosed the problem. He chalked out his own plan to bring standard to the Bureau of Indian Standards.

The PVSM with perseverance

He did not announce anything to anyone. He simply went around the office one morning, 15 minutes after the commencement of office hours, and collected all the attendance registers from every section in person. He marked the absence of everyone very coolly and sent the attendance register back. The first day there was shock, utter shock among the members on the Staff. The second day their shock continued. The third day, the Union represented, through other officers, for ignoring this ‘minor issue’. But, the military man said that it was not a minor issue. He said, “You are paid for your presence as well as work, here in this organisation. I am not asking you to work. I just ask you to be present during the working hours. There is no concession on this score”. He was very firm. He demonstrated his firmness even more when the Union chose to demonstrate its own power. He did not relent.

Attendance Registers were continued to be seen by him without any let up. He demonstrated his perseverance in a remarkable manner. By the end of the first month, the staff members realised that they could not change the attitude of their DG. They had no other option but to change their own attitude. The second and third month, they tried to change their attitude. They took steps to manage their personal affairs in such a manner that they would be on time for office. The DG pressed on with the monitoring of attendance register for a continuous period of six months. Yes, it was true. By then, it became the habit for the employees of the BIS to reach the office in time, and to remain in the office upto 5.30 pm.

It was on the first day of his seventh month in office that Mr. Lal convened a meeting of officers and staff of every section separately and reviewed the work done by them. As sitting in the office had, already, been made a habit for the officials, it naturally showed up in their performance too. A remarkable attitudinal change, made possible in every employee, because of pressure not from within but from outside – from the boss.

Mr. Lal, a PVS Medalist, redeemed the BIS, really. He brought the BIS back on track, within a period of six months.

Mr. Sahib Singh Verma’s surprise visits

When Mr. Sahib Singh Verma was the Minister for Labour, he visited the offices under his Ministry at the commencement of office hours and closed the entrance door before verifying attendance. This had a dramatic effect on the punctuality in offices in New Delhi, including the offices of the ESIC. But, that is not the case with the other offices of the ESIC in the Regions. The need not only for punctuality and but also for service with a sense of compassion, devotion and outreach is felt more in the field offices and medical institutions of the ESIC.

The incident in the BIS does, therefore, have close relevance to the offices of the ESIC.

The employees of the ESIC grumble and assemble and resolve to agitate. But, they must know that they have to rise up and fight not against the rulers but against the impression prevailing among the insured population about the nature of service provided by the officers and staff members. Because, if someone like the Finance Minister could point out fingers against the ESIC and try to convince the public that the ESIC could be dispensed with, these employees cannot just blame the Minister for it. They have to blame themselves too. That there happened many things at the top in 2009 and 2010 might be true. But, the ignorance and arrogance of many employees of the ESIC at various other levels including the lower levels of the organisation were and are also the contributing factors to create a sense of apathy and antipathy among the beneficiaries against the ESIC.

When things went wrong in the BSNL, the employees’ unions and the officers associations assumed ownership of the organisation and started questioning the decision-making process. A new sense of commitment could be seen among the employees there. But, the employees unions and the officers associations of the ESIC choose to remain indifferent, although there is more reason for them to fight for the organisation and save it from the predators.

Beveridge, needed forever

ESIC is a well-conceived concept to reach out to the masses. The need for the ESIC , the social security measures provided by it, would be felt by the society as long as the world exists. A cursory reading of the report of Sir William Beveridge would testify to this fact. That is the reason his report, a charter to protect the humanity from the pains caused by undeserved wants, is called as a monumental document. Social Security has, throughout the world, achieved successfully what Communism could not achieve.

It gives an opportunity to the employees of the ESIC to make themselves useful to the humanity. But, the imperious behaviour demonstrated by the employees, coupled with their indifference, indolence and ignorance, when approached by the beneficiaries would result in creating very serious antagonism among the public. That situation is tailor-made to make it easier for the people like Mr. Manmohan Singh and Mr. Modi to dump the ESIC and give noble impressions to their ignoble intentions to sell the nation to private players.

The employees of the ESIC stand warned. A precedent has already been created by the BJP regime by selling a government department to a rich businessman. VSNL, a profit-making body, was sold to Tatas. The rulers would, therefore, not wink an eye if the situation created by the employees of the ESIC help them to dump the ESIC in favour of private players by diluting its provisions.

If the role of ESIC in the nation-making is thus diluted, it will not be only because of the pro-rich attitude of Mr.Manmohan Singh and Mr. Modi but also because of the incorrigible attitude of many employees of the ESIC. It will be of no use to cry later without cultivating a little sense of happiness in doing real service to the people.

The Good and the Bad

There are many honest officers, sincere staff members at all levels, empathic doctors and nurses in the ESIC who provide yeoman service to the beneficiaries. But, the effect of their services pale into oblivion when contrasted with the multitude of self-seeking officials who do not care to be there in the organisation for rendering service to the public.

Yet, it becomes the duty of the honest officials also to fight against their colleagues who bring disrepute to the organisation. Because, the attitude of such blacksheep does affect, ultimately, the honest officials too. The sincere officials are required to hang their head in shame when the organisation is criticised for the wrongs committed by the mischievous.

The utterances of the Finance Minister on the day of Budget must awaken the blacksheep, at least now, to change their attitude. The honest employees of the ESIC at every level must fight against the dishonest among them with all seriousness it deserves.

ESIC employees must emulate Hannibal’s soldiers

When Hannibal had to fight his first battle with the fearsome Roman legions, multifold stronger in number, in Northern Italy, he had to bring his worn-out men alive. He told his frightened and diffident soldiers that they were many miles away from home, on hostile territory with nowhere to go. “It is either freedom or slavery; victory or death”. He advised his soldier to fight with all intensity and ferocity that they would win the mightier and stronger Roman army. Hannibal’s soldiers did so and won the Romans. (33 Strategies of War – Robert Greene).

Similar is the case today with the ESIC employees. Here is the opportunity for them to turn a new leaf and emulate the soldiers of Hannibal and work with devotion and compassion towards the beneficiaries that the beneficiaries themselves would realise the importance of the ESIC as a public organisation and resist the attempts of the rulers to dilute the beneficial provisos of the ESIC.

It is time for the ESIC employees to demonstrate their potentials. It is an opportunity for them to vindicate themselves. Will the ESIC employees sit up, take notice and rise up?


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The CAG Report: the facts we do not know!

CAG’s Audit Report on ESIC

CAG’s Performance Audit Report on ESI Corporation for the period from 2008-09 to 2012-13 has been presented to the Parliament in December 2014.

I. Some of the important observations of the CAG are:

  1. Substantial difference of Rs.556.59 crore was observed between challans generated towards contribution to be paid by the employers and actual receipts.
  2. While opening two 500 bed hospitals at Gulbarga and Mandi, the norms for existence of minimum number of insured persons were not followed and the locations were incorrectly selected.

Facts, as we know:

  • The manner in which the IT Roll-Out was rushed through without proper spade work, was the reason for the first observation.
  • The manner in which the politicians in power managed to hijack the ESI Scheme for narrow personal ends was the reason for the second observation. That the ESIC authorities could not do anything in such cases earlier too, like the locations of the hospitals at Nagda (instead of Indore) and at a village near Salem (instead of the town of Salem) shows that the ESIC had been pawn in the hands of self-serving politicians.

II. Some of the CAG’s observations based on superficial understanding are:

  1. Approximately 12000 ESIC employees had been irregularly availing medical benefits from ESIC dispensaries/hospitals without paying, though the facilities were meant for only insured persons paying contributions.
  2. Non-initiation of timely action to determine the dues resulted in cases becoming time-barred and consequent loss of revenue amounting to Rs.48.31 crore. Advances of Rs. 20.31 crore given to hospitals as of March 2013 were lying unadjusted in eight States.

Facts, as we know:

  • The conditions of service of the employees of the ESIC are similar to those of the Central Government servants drawing corresponding scales of pay, as per Sec. 17 (2) (a) of the ESI Act, 1948. In the early 1960s, the ESIC employees were getting medical facilities through ESI medical institutions but it was switched to CGHS later. The employees of the ESIC in Delhi were, in the 1980s, getting medical facilities through the CGHS. The decision to enable them to take medical facilities through ESI medical institutions was intended to replace that CGHS facility. The employees are entitled either to CGHS or the ESI facilities. The CAG did not consider these facts.
  • It is not non-initiation of timely action which resulted in the loss alleged. It was the unseemly hurry with which Sec. 45 was amended to insert the limitation clause of five years, without any steps taken by the Revenue Division of the Hqrs. to ascertain the extent of pending claims at the time of amendment. It was not just that. The amended clause was enforced with immediate effect from 01.06.2010 in a hurry, in spite of the fact that there was executive power to examine the issues in house and enforce the amendments at later dates too, as was done in the case of various amendments of the year 1989. The CAG would have done a great service to the nation, if he had examined whether any preliminary study was done and reports obtained from Regions on this issue before embarking on such amendment and before bringing it to force on 01.06.2010. The loss is a recurring phenomenon, every month now.

III. Absence of observations of the CAG on the following vital issues:

  1. Construction matters from 2008.
  2. Alienation of ESIC’s land to Municipalities for permission to construct buildings.
  3. Certifications regarding the progress in the construction of buildings.
  4. Proposal to commence the construction of buildings for medical colleges in a tearing hurry even before the ESI Act  was amended to facilitate setting up medical colleges. 

Facts, as we know:

The CAG was supposed to detect on his own. But, in this case, he was deemed to be aware of these issues. We get information that he had, specifically, been made to be aware of these issues. But, his report is silent on these issues.

Facts we do not know:

We do not know whether such silence implies that there was nothing wrong in the aforesaid four areas or whether that silence implies the attempt at the cover-up.



(This article has been prepared with reference to the report in Outlook (

and the contents in the website


and the PDF format report available in )

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Sickness Benefit and Extended Sickness Benefit: The impact of Budget.

This is the second article in the series, on the announcement of the intention of the Government to free the employees from being held hostage by the Government of India itself, through ESIC. The former one is available at

The essential questions now, after the employees choose private operators for medical benefit, are “Who will provide Sickness Benefit? And, on whose certificate? And, what is the monitoring mechanism?”

Or, has the BJP chosen to do away with the Sickness Benefit altogether?

Have the officials who suggested this proposal examined all the issues of various dimensions involved in it?

The people who are farm workers are paid only for the day of actual work. If they fall sick they would not be able to go for work and will be confined to bed to take rest. There would be no income for them for those days of abstention from work. On the other hand, they would have to spend money for medical treatment during that period. That expenditure must be meted out from their savings or by borrowing.

The same was the case with industrial workers before the ESIC came on the scene. It was this kind of situation, the loss of income during certain period coupled with the necessity of incurring medical expenditure during the same period, that was sought to be answered to by the ESI Scheme. Once covered under the ESI Scheme, the employees get medical treatment and medicines from the ESI medical institutions. The period for which they are required to be on abstention from duty is decided by the medical officers of the ESIC who issue certificate to that effect. The employees get around 60-70% of their wages in cash for those periods of abstention as Sickness Benefit for a maximum of 91 days in two consecutive Benefit Periods, which is actually one full year.

Now that the overenthusiastic BJP regime has declared its intention to free the employees from being held hostages by the Government of India (as invented by Mr. Jaitely), will the BJP stalwart explain the consequences of his decision on Sickness Benefit?

Maybe, they would not want to step back for reasons of prestige. They may even declare that the private medical institutions would issue certificates, which must be honoured by the ESIC Branch Offices.

Or, they may say that there will be no Sickness Benefit at all.

Anyway, if the former is the solution given by them, another question arises. The Medical Officers of the ESIC are monitored through a system of Medical Referees of the same organisation. What will be the system to monitor the private agencies that provide treatment and issue certificate to the employees?

Extended Sickness Benefit

Moreover, what will be the fate of the celebrated and important Extended Sickness Benefit?

No certification in the UK for Cash Benefit

Significantly, there is no system of certificates being issued by the medical officers in the UK. They provide only treatment and recommend the period of leave. It is the employees who decide the period of abstention and get cash benefit for those periods from post offices. Can Mr. Jaitely usher in that era? In India, we could not bring it into force for the past 40 years, only because of the general tendency of choosing to remain on leave for the entire period of 91 days. Our society did not become that mature, at least, up to 1989.

That was the reason for the introduction of the words ‘strike’ in Sec. 63 and Sec. 97 (iv-b) of the ESI Act in the year 1989. One would be happy if the Indian society has become so mature that the Government considered it unnecessary to retain these checks and balances.

Or, another method is to make the Sickness Benefit totally unattractive, by reducing the percentage of the benefit. But, as per ILO mandate, it cannot be reduced below 45% of the wages earned.

So, the alternative is to change the beautiful, time-tested and war-withered-veteran, the Sec. 2 (22) and modify the definition of the term ‘wages’.

Wages can, hereafter, be defined as the basic pay only which may be decided only by the employer and it may even, for example, be just 10% of the total wages. So, even if the Sickness Benefit were increased to 100%, the quantum of benefit would not be attractive to the Insured Person.

No need to worry how he would sustain his family during the period of Sickness and Extended Sickness that runs into two years, i.e, 730 days. Mr. Jaitely, the Finance Minister, has now the authority to believe that such people would fend for themselves.

Adharkar was prophetic!

Pity, a Noble scheme of the Government of India has fallen, for quite some time, already, into the feeble hands of the corrupt and inept! Prof. Adharkar was prophetic. He said that the success of the ESI Scheme depended not only on the honest working of the ESI Act by all concerned. But, by introducing some more measures by the Government. He wanted that the ESI Scheme should not be “saddled with burdens legitimately belonging to other branches of social insurance”. Therefore, while formulating the ESI Scheme, he made four assumptions for its success. They are:

  • Adoption of a scheme for Unemployment Insurance and creation of new employments in the post war period,
  • Establishment of a scheme of Old Age Pension,
  • 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,
  • National Health Drive.

While some steps had been taken in respect of items 1 and 2 during the past 60 years, the required importance has not been given to items 3 and 4. Consequently, Adharkar’s  dreams which were actually achievable and have been achieved in many countries are becoming distant dreams for Indian common people, with the present Government vying with the former one in diluting labour laws. Moreover, ESIC is blamed when it faces and suffers from the negative impact of the non-performance of the politicians on these four areas.

The root cause of all evils!

The only solution for all the problems is to compel all the political parties to make the source of funds of all these parties totally transparent. That alone will strike at the root cause of all the ills plaguing the nation in various spheres.

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The Fagin School

A Presentation which is relevant to the Indian bureaucratic scenario is on the website ‘’. It is posted on our website for the benefit of the readers.
Those who are interested, may click on the following link:

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