Category Archives: Amendment 2015

Lord Yama Dharma Raja discusses Amendment to Sec. 44 !



The Otherworld. The venue is the palace of Lord Yama Dharma Raja. Among those in the assembly were Prof. B.P. Adharkar, Sir William Beveridge, Robert Owen, Jerome Blanqui, Villerme, Daniel Legrand and others.

Lord: “Dear Mr. Beveridge ! I was hovering over the Heaven this morning ,watching the activities of the noble souls here. I was shocked to find you people sitting under a tree morosely. That was why I asked Chitragupta to bring you all here. How come you were sad? This is heaven; there is no reason for any soul here to feel worried. But, why is it that you were in a pensive mood, instead of enjoying the morning sun and the soft-blowing breeze?”

Beveridge: “My Lord ! Prof. Adharkar was sad about the activities of the bureaucrats and the politicians in power in India to amend the Sec. 44 of the ESI Act, 1948. He was the architect of the Act there. He knows the consequences of the amendment proposed by the bureaucrats now. He is, therefore, sad. When he explained the manner in which the Indian politicians go about it, I felt sad too. It so happened that Robert Owen and George Cadbury came that way. They were also shocked to hear about the amendment proposed by the Indian politicians. You might, perhaps, have seen us, then, when we were discussing about it”.

Lord: “Amendment to Sec. 44 of the ESI Act ! Did that make you so sad? I wonder why.  May I know what it is, Mr. Adharkar?’

Adharkar: “Yes, My Lord ! Mr. Beveridge had prepared a monumental document to provide social security to the people. It was published by the British Government in October, 1942. His report had, almost, been copied with some regional variations in many civilised countries. Mr. Beveridge had diagnosed the ills afflicting humanity and attempted to provide remedy only to one aspect of it. The ESI Act in India was inspired by his report on Social Security. But, the present day politicians want to do away with it. They are working for the rich to enable them to make more and more money and do not care for the poor who cannot raise their voice and make it to be heard”.

Beveridge: “Yes, My Lord ! It is the duty of the government to protect the commoners from being exploited by the rich and mighty. The Social Security enactments conceived of by me, work in that direction. The concept of Social Security is to make the world a civilised one. Humanity suffers from five ‘Giant Evils’. They are (i) Disease, (ii) Idleness, (iii) Ignorance, (iv) Squalour and (v) Want. Among these five evils, the last one, the “Want”, can be tackled in a relatively easier manner by the governments of every nation through organised action. The ESI Act was enacted by the Government of India in the year 1948 only for that purpose. But, the present day rulers do not care about the niceties of the concept of Social Security. Their present proposal to amend the Sec. 44 will ruin the entire nation. That is why Adharkar is upset so much”.

Lord: “Why do you feel upset Mr. Adharkar? Should the world stand still, as it was in the Forties? Why not the present day politicians make changes to suit the present conditions of the world? After all, more than 71 years have passed after you had given your report on 15th August 1944”.

Adharkar: “No, My Lord ! I would be happy if the concept of social security had been expanded and more benefits given, as is being done in Germany, Norway or Sweden, both in quality and quantity. But, in India the situation is otherwise. When I presented the report I recommended bringing the workmen who were drawing wages upto Rs. 200 pm, excluding Overtime wages, within the purview of this security-net. When the Act was enacted in 1948, the limit was kept as Rs. 400 pm. That was more than the salary of the District Collector in those days. Even in the 1970s, after the III Pay Commission Report was implemented, the limit for coverage was Rs. 1000 pm. That was more than the salary of the Local Office Manager of the ESI Corporation, who was disbursing the cash benefits. His Basic Pay was Rs. 550 pm, after the implementation of the said pay commission report and his total salary was only about Rs. 650 pm when the report was implemented. The Local Office staff members used to prepare the Dockets of payment to these Insured Persons with more respect, as those insured persons were drawing more salary than their own Local Office Manager. But, now the coverage limit is Rs. 15000 pm which is less than the salary of the employee appointed in the lowest cadre in the ESI Corporation. This itself would show that the scheme had not expanded in the real sense, although the number of persons brought under coverage has increased. But, I feel more concerned about the manner in which the politicians of these days want the government to abdicate its responsibility so that the rich businessmen would enter the field and make a mess of the nation”.

Lord: “How come ? Would such privatisation really make a mess of the entire nation? What is the reason given by these politicians to go for such privatisation?”

Adharkar: “These politicians say that the present scheme has resulted in holding the workers as hostages, within the ESIC fold. They say, in public, that privatisation would give them option to seek better facility elsewhere. But, that is not true, My Lord ! It is these politicians who are primarily responsible for corruption of various shades in large scale in every public organisation, including the ESIC. They spoil the organisation and then cite the same state of affairs to blame the organisation and sabotage it. Except some exceptions, the politicians in power do not come forward to make the organisation corruption-free and provide better service to humanity”.

Lord: “In that case, if corruption in public organisations cannot be prevented,  privatisation seems to be the better option”.

Adharkar: “No, My Lord ! These politicians who are not willing to  run this single public organisation corruption-free, in spite of the existence of effective tools like Conduct Rules and CCA Rules to control and monitor the officers, are not going to make the private organisations, which might venture into this field, to act in a corruption-free manner”.

Lord: “Why do they want private role in social security, then?”

Adharkar:  “Their real intention is not to protect the welfare of the workers but to provide more facility to the rich to make more and more money by opening up the field of social security also for them. The ESI Act came into existence after thorough study of the problems faced by the working population, for over a century. The Report of the Royal Commission of Labour of 1929-1931 necessitated it and the Report of Sir William Beveridge facilitated it. But, the present proposal to amend and dilute Sec. 44 did not emanate from any such public documents. There was no analysis of the experience of other nations, if any, in which such privatisation had been found to be a tremendous success. There was no public discussion on the issue, especially about the nitty-gritties of the nature of service that would be provided by the private players and the manner in which they would be monitored. The way in which the Obamacare was subjected to public discussion in the USA can be recalled in the context. No such discussion did ever take place before the bureaucrats of the PMO conspired to amend the Sec. 44 on the sly.

Lord: “Is it?”

Adharkar: “Yes, My Lord ! The aristocrats control the pliable bureaucracy in the PMO. The proposal to amend Sec. 44 originated from the bureaucrats of the Prime Minister’s Office who are habituated to bypass the Labour Minister’s Office and give directions directly to the Director General to do this and that. The very draft amendment as placed before the ESI Corporation on 07.04.2015. These bureaucrats who wield such unlawful power do not care about the welfare of the people. The very fact that the draft proposal placed on the table on 07.04.2015 received all-round condemnation (***) by the members of the apex body testify to the fact that it did not emanate from the people but from the top, as the brain child of those insensitive bureaucrats. And, those bureaucrats of the PMO believe that they are obliged only to please the rich. They believe that they are not accountable to the public. In regard to their political masters, they believe that the entire nation has been sold to them, once they get majority seats in the Parliament. It applies to all the political parties in India. The tradition of going to the people when they go for some major changes is absent in India. In essence, the Indian politicians do not know what Referendum means. They refuse to learn what UK did in the case of EEC. They just do not want the Indian democracy to mature.”

Lord: “Okay ! What, then, is your proposal to make the ESIC, a public organisation, corruption-free, if you want to retain the social security in public sector forever?”

Adharkar: “Corrupt bureaucrats are of four kinds, My Lord ! The first is Self-centred-Corrupt. The next is Organised-Corrupt. The third is Philanthropic-Corrupt. The fourth is High-fly Corrupt.

(Continued in Part II)

(***) Note: The Minutes of the meeting of the apex body of the ESIC is available at:


(Image: courtesy: internet)


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Kerry Vs. Bush: Privatisation of Social Security !

2004 Presidential Election in the USA.

John Kerry wanted to scare away the voters from voting again for President George. W. Bush saying that the latter was planning a surprise second term attempt to privatise social security, and forecast a “disaster for America’s middle class”.  “I’ll tell you what. I will never privatise social security”, Kerry said.

The spokesman of George W. Bush, the Republican Party Chairman, Ed Gillespie, called the charge “just flat inaccurate”.

None of the parties wanted privatisation of social security there.

Kerry Bush

Asian Age 19.10.2004

But, Mr.Arun Jaitely, who allows himself to be influenced by power-brokers and who inserted the term ‘hostages’ in his Budget Speech (without proper document from any authorised source) to malign the ESI Scheme and the EPF Scheme is pressing hard on amending Sec. 44 of the ESI Act, 1948, to privatise social security.

People of India stand warned !

Your representatives are not working in your interest.

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Amending Sec. 44 : Agenda – The Open and the Hidden !

The following was the Agenda Item No. 3 placed before the meeting of the apex body of the ESI Corporation on 07.04.2015, proposing to amend Sec. 44 of the ESI Act, 1948:

The Agenda




The opening paragraph of the Agenda item says that the proposal to amend Art. 44 was born out of the need to fulfil the commitment made by the Hon’ble Finance Minister in Para 62 of his budget speech on 28.02.2015.


Paragraphs 61 and  62 of the Budget speech are re-produced here for easy reference of the readers:

61. Madam Speaker,  the situation with regard to the dormant Employees Provident Fund (EPF) accounts and the claim ratios of ESIs is too well known to be repeated here. It has been remarked that both EPF and ESI have hostages, rather than clients. Further, the low paid worker suffers deductions greater than the better paid workers, in percentage terms. 

62With respect to the Employees Provident Fund (EPF), the employee needs to be provided two options. Firstly, the employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer’s contribution. With respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA). We intend to bring amending legislation in this regard, afterstakeholder consultation.”


Fortunately for the insured population, the members of the ESI Corporation spoke very well during the meeting on 07.04.2015 against the Agenda Item that proposed to amend Sec. 44 of the Act that the Government had deferred the issue. The observations of the members of the ESIC as found recored in the Minutes of the meeting dated 07.04.2015 are given hereunder:

The Minutes

Page 5 of the Minutes

Page 5


Page 6

Page 6


Page 7

Page 7


Page 8

Page 8


Page 9

Page 9


Page 10

Page 10


Page 10

Page 11

Dear Readers,

The ‘power’ of the middlemen of the rich to manipulate the politicians in power to amend an important social security enactment, just through personal contacts, becomes evident from the insertion of the word ‘hostages’ in the Budget Speech of the Government of India.

The alertness of the Members of the ESI Corporation on 07.04.2015 saved the nation that day.

But, grapevine has it that the proposal placed from the above on 07.04.2015 for amending Sec. 44 has not been dropped but is being pursued by various vested interests which are after big money.

Let the representative of the employees who are members of the ESI Corporation continue to exercise the same vigil !

The ESIC would work wonders, when run corruption-free. It has worked wonders in every pocket that had been run corruption-free. Let it not be run down by the politicians and power-brokers who do not care for the future of the nation but only about their present and go with their hidden agenda.

Let us prove that Robert Owen, Sir William Beveridge and Prof. B.P. Adharkar have not toiled in vain!




The following additional information is given for easy reference to recall the facts which are relevant to this issue:

The fact that the ESIC was not holding anyone as hostage had been brought out in the following post:

The fact is that the ESIC is the best bet to provide security net to the people and the details in this regard with reference to international experience and national level instances were brought out in the following post:

Inviting private players to meddle with social security network was nothing but abdication of responsibility of the government, and the facts in this regard had been brought out in the following post:

The sustained campaign by some middlemen to dilute the ESI Scheme so that the private players could enter the field and loot the people had been highlighted in the following posts:

It was, thereafter, decided to trace the origin of the term ‘hostages’ used by the Finance Minister in his Budget Speech to use it as an alibi to run down the ESI Scheme and to amend the  ESI Act to allow the private money-bags to enter the field of social security to make money for themselves and share a portion of it with the politicians who would help them.

The fact that the word ‘hostages’ had been used by the Finance Minister in his budget speech, in a mysterious manner, without any supporting documents had been brought to the notice of the readers in the following post;



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ESIC’s Medical College Muddle – Part 4 : Sec. 59 (3) – Was the amendment legitimate ?

The issue discussed in this Post is a simple and straightforward one. An amendment proposed in a Bill is considered by the Parliamentary Standing Committee on Labour, and it refuses to endorse that proposal. Can the Parliament, thereafter, approve that amendment without assigning reasons why it differs from the decision of its own Standing Committee? The answer is that the Parliament cannot.

In the present case, the issue is even more serious. The Parliamentary Standing Committee on Labour examined the amendment proposed in the Bill No. 66 of 2009 to insert Sec. 59 (3) in the ESI Act to enable and empower the ESI authorities to run hospitals through third party participation. The Committee had, in Para 113 of its Report dated 09.12.2009, said, “there is no justification on the part of the Government for making such an enabling provision in the Bill for commissioning and running these hospitals through third party participation”.

Yet, the authorities placed the Bill before the Lok Sabha for approval without modifying or changing any sentence in the proposal to insert Sec. 59(3), which had been deprecated by the Standing Committee. The issue had not been taken up for discussion for two sessions. At last, on the last day of the winter session meant for Labour Department, i.e., on 03.05.2010, it was taken up, when there was pandemonium created by the opposition over the Sibu Soren issue. It was all of a sudden announced that the ESI Amendment Bill had been passed. The Minutes of the Lok Sabha proceedings show that the Bill had been read and passed, within nine minutes, amidst repeated interruptions, between 1420 and 1429 hours that day.

There was no information placed before the Hon’ble Members of Parliament, at the time of presenting the Bill, about the observations of the Parliamentary Standing Committee on Labour on that proposal to insert Sec. 59 (3) for third party participation. The Members were not made aware of the reprobation of the proposal by the Standing Committee, during the presentation of the Bill, by the Hon’ble Minister for Labour.

“The need for committees arises out of two factors – the first one being the need for vigilance on the part of the Legislature over the actions of the Executive, while the second one is that the modern Legislature these days is over-burdened with heavy volume of work with limited time at its disposal. It thus becomes impossible that every matter should be thoroughly and systematically scrutinized and considered on the floor of the House. If the work is to be done with reasonable care, some Parliamentary responsibility has to be entrusted to an agency in which the whole House has confidence. Entrusting certain functions of the House to the Committees has, therefore, become a normal practice. This has become all the more necessary, as a Committee provides the expertise on a matter which is referred to it”.

Again, as per Rule 331N of the Rules of Procedure and Conduct of Business in Lok Sabha, “The report of the Standing Committees shall have persuasive value and shall be treated as considered advice given by the Committees”.

Yet, no documents were placed before the Members to persuade them how the persuasion by the Standing Committee was not correct. No note of dissent was given by any Member of the said Standing Committee (nor by the Executive). No attempt had been made to explain the stand of the ESI Corporation that the “considered advice” of the Parliamentary Standing Committee were wrong and could be over-ruled by the Parliament. The pandemonium prevailing at that time was taken advantage and a Bill that contained the proposal to set up medical institutions, appointment of consultants by exercising sky-high powers, and other issues which were to cause far-reaching effect had been seen through.

In fact, the observations of the Parliamentary Standing Committee with reference to Sec. 59 (3) had been deliberately suppressed as could be seen from Pages 60, 61 & 62 of the Hansard dated 03.05.2010 of the Lok Sabha.

Now, the authorities who do not know what to do with the many white elephants (massive structures for unwanted medical colleges and hospitals), are

(1) toying with the idea of running the ESI Medical institutions on their own;

(2) making efforts to hand them over to the State Governments of the respective Regions.

(3) thinking of handing over the medical colleges to Third Parties under (Public Private Partnership) “PPP” arrangements.

(4) considering whether they could just “divest” the property.

This is evident from the Press Release issued by the Hqrs. Office of the ESI Corporation in E-15/15/ 02/ 2015-P.R. dated 23.03.2015.


PPP Press release 23 03 2015 Head

Extract from Page 2 of the Press Release:

PPP Press release 23 03 2015


The authorities believe that Sec. 59 (3) which had been inserted in the ESI Act, 1948 through the amendment of 2010 empowers them to think of the PPP options. The amended Sec. 59(3) is reproduced below:

Sec 59 3


But, the moot question is whether the Parliament of India consciously approved the amendment for inserting the aforesaid Sec. 59 (3) when its own Parliamentary Standing Committee on Labour had, in its report dated 09.12.2009, categorically refused to endorse the proposal for third party participation to run the ESI hospitals.


1. While the authorities may cite only the Sec. 59 (3) and claim that it is “law” as on date, the insured persons can object to it, citing the observations of the Parliamentary Standing Committee on Labour and prove that the Legislature had been tricked on 03.05.2010 by the Executive, whose intention was only to observe the formality of getting the Bill declared by the Speaker as passed on the floor of the Lok Sabha.

2. The absence of any reason recorded by anyone to counter the argument of the Standing Committee on the proposed Sec. 59 (3) would help the insured persons to establish the fact that the Executive had not been sincere and honest in giving right and complete information to the Legislature on this issue before asking for its approval.

3. The Executive had, with mala fide intention, placed this Sec. 59(3) before the Parliament, in its original draft form, even after the Standing Committee had objected to the draft proposal. It is not the ‘end’ but the ‘means’ adopted by the Executive to make the said Sec. 59 (3) law, which makes that provision questionable and justiciable.

4. Even assuming, without admitting, that the present Sec. 59 (3) is valid, the ESI authorities cannot think of PPP in respect of medical institutions, as Sec. 59 (3) refers only to hospitals and not medical institutions. (Besides, the provision for setting up medical institutions comes later as Sec. 59-B).

5. Besides, the talk of “divesting” the property or handing them over as “gift” to the State Governments are not permissible, as the ESI Act, 1948 permits the ESI Corporation only to “accept grants, donations, gifts from the Central, or any State Government, Local authority, or any individual or body whether incorporated or not for all or any of the purposes of the ESI Act”. There is no provision to gift away the Corporation’s property.


No third party participation is possible in running the ESI Hospitals, in spite of the “managed-to-be-passed” Sec. 59 (3).

No third party participation is possible for running the ESI medical colleges, because even that Sec. 59 (3) talks only about hospitals and not about medical colleges.

It would, therefore, be just and proper, in the given circumstances, to make use of the massive infrastructure created for the medical colleges in such a manner that it brings annual revenue to the Corporation.


NB: The following is only for those who want to go deep into the issue:


Sec. 59 of the ESI Act, as it was in the year 2008,  when the authorities took steps to amend that Section: 



ESIC Sub-Committee’s proposal in the year 2008 to amend (i.e., by making addition to) Sec 59 (1) and Sec. 59 (2) for private participation :




Amendment proposed as per Clause 14 of the Bill No. 66 of 2009 to add Sec. 59 (3) to the ESI Act:

Sec 59 2 Bill Text

Report of the Parliamentary Standing Committee on Labour presented to the Lok Sabha on 09 .12. 2009 and laid in Rajya Sabha also on the same day (From pages 70 & 71):  

Para 113 page 70 PSC report




Page 71 of the PSC report


Sec. 59 (3) of the ESI Act after Amendment of 2010, in force, as on date:

Sec 59 3


Readers may please note that the text of he original Clause 14 in the Bill No. 66 of 2009 has been made to become law, without taking cognizance of the observations of the Parliamentary Standing Committee on Labour.


Now, what had actually happened in the Parliament in the nine minutes between 14.20 and 14.29 on 03.05.2010?

(One has to go through thePages from 58 to 69 of the Hansard) given in the following link:

Hansard showing how the Parliament passed the bill

It is significant to note that the Hon’ble Minister just lays on the table, on the advice of the Hon’ble Deputy Speaker, his statement about the observations of the Parliamentary Standing Committee. This portion of his speech was not, actually, spoken in the Lok Sabha.  Even in that ‘speech’ laid by the Hon’ble Minister, which is available in Pages 60, 61 & 62 of the Hansard, there was no reference to the objection of the Parliamentary Standing Committee to Sec. 59 (3) as per Para 113 of the Report.

Labour Minister on PSC report


Parliament passes Bill Page 61


Parliament passes Bill Page 62

Can anyone say that the MPs were aware of the observations of the Parliamentary Standing Committee on the proposed Sec. 59 (3) ?

Can anyone say that they were aware of the fact that the ESI authorities did not modify the Bill, in spite of the advice of  the said Committee in Para 113 of their Report? 


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ESIC’s Medical College Muddle – Part 3 : Consolidated Fund Vs. ESI Fund !

Atifete 2


The report of the ESIC Sub-Committee on Medical Services and Medical Education dated 13.05.2014 said as under:

  1. “Setting up and running of Medical Colleges is a cost intensive proposition in respect of capital cost, recurring cost, loss of revenue, etc.,” (Para 6. g)   and
  2. “based on Current projections, the surplus funds of the ESI Corporation are likely to be negative by 2016-17”. (Para 6.h).

But, the Financial Memorandum that was part of the Bill No. 66 of 2009 placed before the Lok Sabha said, in Para 3, that “The Bill does not involve any expenditure whether recurring or non-recurring nature”.

Application under the RTI Act

One citizen, therefore, asked for the supply of the following information under the Right to Information Act, 2005:

“It has been mentioned in the Press Release dated  5.03.2014 that the ESIC was running 7 PG institutes, 4 ESIC Medical Collages, one Dental collage,  one Nursing College, and one Para Medical Institute all over the Nation. It shows that there are 14 ESIC medical institutions in all.

a. Kindly intimate the recurring expenditure incurred for running these fourteen (7+4+1+1+1) institutions  for the two financial years, i.e., for the year 2013-14 and also for the year 2014-15.

b. Kindly  intimate the anticipated recurring  expenditure (Running cost) for  running these  14 medical  Institutions  during  the year 2015-16 and also for the year 2016–17. It becomes clear from the report of the above mentioned Sub-Committee that you had already made the required calculation and assessment, for the year up to 2016-17.

c. Please also furnish following details for the year 2016 -17.

  1. Annual Income of the ESI Corporation  through contribution & other sources, as anticipated, for the year 2016 -17.
  2. Anticipated  total expenditure for the year 2016-17 including the running cost  of  all the  Medical institutions.
  3. Anticipated surplus / shortfall for the year 2016- 17.

This information can be collected easily form the particulars furnished by the Hqrs. Office of the ESI Corporation  to the above mentioned sub-committee that met on   as 13.05.2014.”

But, he has not received any reply, till date, from the CPIO of the ESIC. Why?

  • Is there anything wrong in the request of the citizen to ask for the above-narrated information?
  • Is not the supply of that information in public interest?
  • Shouldn’t the public know the truth?
  • Why are the authorities so indifferent?

Kosova adores informing the Public

World wide, even the newly formed nations like Kosova, adore freedom of the people and their right to information. But, the ESIC authorities choose to scoff at the provisions of the RTI Act, 2005. They do not care that any and every citizen has the right to know what had happened and happens in this public organisation. They do not want to provide any information. Their non-response is unlawful. Moreover, they know that, by such non-response, they are violating the Statutes. Yet, they do so, because they believe that the penal provisions would not be enforced against them.

If there is no penalty or if they can manage to escape penalty, they can violate any law, they have discerned. It was only this belief that encouraged them to consciously violate not only the provisions of the RTI Act but also many provisions of the ESI Act, specially, in the matter of setting up medical colleges in a large scale, even before the amendment came into force.

What Parliament was informed

One of the very important aspects to be kept in view, in the context, is that when the Bill No. 66 of 2009 was presented in the Lok Sabha in August 2009, the ESI authorities had already charged away more than Rs. 6000 crores for construction of medical colleges. They were, therefore, desperate to get the amendment passed by Lok Sabha somehow. The had ventured to mislead the Parliamentary Standing Committee on Labour also only because of such desperation. They did not want the Parliament to know the exact amount to be spent by the ESI Corporation to set up and run the medical institutions.  So, they chose to misinform the Parliament that there would be no recurring or non-recurring expenditure to set up the medical institutions. The Ministry of Finance also colluded with them and added the following sentence to the Financial Memorandum placed before the Lok Sabha along with the Bill: “The Bill does not involve any expenditure whether recurring or non-recurring nature”. 

Consolidated Fund of India Vs. Public Fund of the ESIC

The ESI Fund is, actually, a Public Fund although it is not part of the Consolidated Fund of India.The Annual Report of the ESI Corporation is placed before the Parliament for its scrutiny and approval every year, as per Sec. 36 of the ESI Act.

36. Budget, audited accounts and the annual report to be placed before Parliament. — The annual report, the audited accounts of the Corporation, together with the report of the Comptroller and Auditor-General of India thereon and the comments of the Corporation on such report under section 34 and the budget as finally adopted by the Corporation shall be placed before Parliament.

This Section makes it very clear that the Parliament is very earnestly concerned about the manner in which the officials of this autonomous body generate  the public funds and utilise them.

The Parliament is concerned about the financial position of the ESIC and has (a) the authority, (b) the right and (c ) the duty to feel so concerned.

The authorities of the ESIC or the authorities in the Ministry of Finance cannot, therefore, contend that the information they provided in the Bill was only about the Consolidated Fund of India and not about the Public Fund generated by the ESI Corporation.

Pulling wool over the Parliament’s eyes

Such an attempt would show that they chose to play clever with the Parliament, while attempting to get the Parliament’s nod for setting up medical colleges, to cover up their desperation to get such a nod, as they had already spent thousands of crores of rupees to construct buildings for medical colleges.

These authorities cannot take the stand that they were not required to inform the Parliament about the financial requirement of the ESIC to run such medical colleges and how they were going to meet it.

But, what actually happened was that the authorities of the Ministry of Finance had helped the authorities of the ESIC to effectively mislead and prevent the Parliament from knowing the financial requirement of the ESIC to run the medical colleges.

The result is that the Sub-Committee headed by the Secretary of the Ministry Labour in which the Director General and the Financial Commissioner of the ESIC were members, which analysed the impact of these ESIC run medical institutions found that the surplus would likely be in the negative by 2016-17, based on the current projections.

  • What would have happened had the Parliament been informed of the details of recurring and non-recurring expenditure from the ESI Fund?
  • Was such a calculation ever made, before the Bill was tabled in the Parliament, or, at least, before it became part of the Act?
  • What would have happened had, at least, the Parliamentary Standing Committee on Labour asked or been informed of the details of recurring and non-recurring expenditure from the ESI Fund?
  • What is the reason the ESIC authorities go to the extent of defying law so brazenly to deny information to the public?

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ESIC’s Medical College Muddle – Part 2

Synopsis: Is there a grand design behind the desperate action of the ESI authorities to facilitate a political bigwig to take over ESIC properties as running medical colleges? Why are they hell-bent on continuing with the medical colleges when they know that their financial position would nose dive very seriously in the year 2016-17, if they continue to run them? Why are the ESIC authorities moving the Supreme Court and High Court New Delhi so desperately to get the required certificate from the Medical Council of India which did not certify the fitness of these colleges for the year 2015-16?  Are the ESIC authorities going to protect the property of the Indian labour force or are they playing active role in the conspiracy? Do the authorities have any right to keep people in the dark, by not answering legally valid questions? The article is intended to find answers. 


The ESI Corporation started establishing medical colleges and are running them from the year 2010 onwards in (1) K.K. Nagar, Chennai, Tamilnadu, (2) Rajaji Nagar, Bengaluru, Karnataka (3) Joka, Kolkata, West Bengal, (4), Gulbarga, Karnataka and (5) Dental College, Rohini, Delhi. It was later realised by the ESIC, in the year 2014,  that it had ‘no core competency to run medical colleges’. A Sub-Committee was, therefore, constituted to examine the issues involved. The Secretary of the Ministry of Labour & Employment, Government of India had been the Chairman of that Sub-Committee on Medical Services and Medical Education. The Director General of the ESI Corporation had been one of the Members along with the Financial Commissioner of the ESI Corporation.  And, that Committee had given report on 13.05.2014 stating, among many, that based on current projections, the budget of the ESIC would likely be negative in the year 2016-17.







The authorities had, therefore, informed the Hon’ble Prime Minister, in a meeting held on 05.07.2014, that “since the ESI Corporation did not have the core competency to run medical colleges, they may be handed over to relevant agencies with capability and mandate to run medical colleges”.

The Apex decision-making body, the ESI Corporation had, thereafter, taken a formal decision, on 04.12.2014, that the “ESIC should exit the field of medical education entirely” as that was “not the core function of the organization”, as could be seen from the Memo dated 05.01.2015 of the ESIC.

The ESIC had also decided to ease itself out of the situation in a phased manner by running the colleges only for the purpose of enabling the already-admitted students to continue and complete their studies or to close all the colleges, at once, by apportioning the admitted students among other medical institutions.

The ESIC had also decided not to undertake further admissions. It has been specified in the aforesaid Memo dated 05.01.2015 that the “ESIC may neither undertake further admissions in the medical colleges and other Medical Education Institutes (PG, Nursing, Para-medical & Dental including Dental College Rohini) nor start new medical colleges”.

Memo dated 05.01.2015

Memo dated 05.01.2015

They decided, rightly, to quit “earlier”

The memo revealed that the ESI Corporation had, as an Apex Body, taken a considered decision to quit medical education and to close down the medical institutions in a phased manner or to close them down immediately by apportioning the existing students among other medical colleges of the respective state governments, “whichever is earlier”.

While this was the decision taken, rightly, by the Apex body on 04.12.2014 and communicated on 05.01.2015, the ESIC authorities had, in their subsequent Memo. dated 18.03.2015, communicated a diametrically opposite administrative decision (and that too, without placing that issue before the aforesaid Apex Body) to admit students for MBBS/BDS/PG courses in all the aforesaid four institutions for the year 2015-16.

Memo dated 18.03.2015

Memo dated 18.03.2015

When the ESIC had confessed earlier, in categorical and clear terms, that it did not have the core competency to run the medical colleges and that running medical colleges was not its core activity, it cannot, later, take an arbitrary and unjustified decision to admit students for one more batch and aggravate, thereby, the problems of both the organization and the prospective students.

Rumours galore

The contents of the Memo dated 18.03.2015 were really puzzling. And, rumours were afloat,  that the reason for the decision communicated by the ESI authorities on 18.03.2015 to reverse the earlier decision dated 05.01.2015 was to facilitate handing over the four medical colleges at the four metros with the entire infrastructure to some, already-identified-political-bigwig, at a later date, as a running institution. The rumour gained credibility as the decision communicated on 18.03.2015 had been taken without recording convincing reasons anywhere to prove how the issues raised by the Sub-Committee were wrong or, at least, surmountable. Was it not the duty of the bureaucrats to record reason rebutting all the points raised by the Sub-Committee that led to the decision to quit medical education?

The relevant questions of a citizen

A citizen had, therefore, decided to ascertain for himself the facts relevant to the issue. He wanted to know whether the ESIC, which had taken decision to admit students for the next year would continue to run the medical colleges “forever” or would hand over those colleges, at a later date, to  someone through some arrangements, as the authorities have already been demonstrating considerable enthusiasm (over-enthusiasm, in fact) in PPP very often.

He, therefore, sent an application under Sec. 6 of the Right to Information Act on 19.05.2015 (which had been delivered to the CPIO on 25.05.2015), seeking the following information:

  1.  Kindly intimate whether it has been recorded anywhere in the records of the Hqrs. Office of the ESI Corporation that these five institutions would continue to be run by the ESI Corporation forever.
  2. Kindly intimate whether any analysis of the financial implications in running these five institutions for another, at least, five or six years (until the students who join complete the courses) had been made on the file before issuing the instruction in the above-mentioned Memo dated 18.03.2015.
  3. Kindly intimate whether the concurrence of the Financial Commissioner of the ESI Corporation had been obtained on file for such calculations regarding the running cost.
  4. Kindly intimate whether the ESIC will, again, express its inability to run the medical institutions and try to hand over these five institutions to anybody, at a later date.

Silence of the CPIO 

But, the CPIO of the Headquarters Office of the ESI Corporation maintains total silence and does not respond to the application. He is violating the provisions of law, in the belief that the penal provisions of the RTI Act would not be enforced.

But, the public has the right to draw adverse inference when a public authority does not discharge his legal duty to respond and maintains total silence.

“Information is Power”, said Robin Morgan. But, the Indian bureaucrats believe that “Suppression of information means more Power”.

But, their unlawful non-response lends credence to the rumours that they are abetting the process of handing over the four important structures in the four metros at Delhi, Bengaluru, Chennai and Kolkata, really, to the private bigwig at a not-so-distant future, as running institutions.


NB: The Medical Council of India denied permission to the ESIC to admit students in the ESIC run medical institutions at Kolkata (Joka), Chennai (K.K. Nagar), Bengaluru (Rajaji Nagar)  and Gulbarga (Kalaburagi).

Karnataka Colleges:

Chennai College:

Kolkata College: 

MCI report on Joka ESIC Medical College.

MCI report on Joka ESIC Medical College.

The  latest news is that the ESIC authorities have gone to Supreme Court and then to the High Court of New Delhi seeking direction to the Medical Council of India to reconsider its earlier decision not to recommend issuing Letter of Permission to run the ESIC Medical Colleges. Why are the authorities so desperate to run the ESIC medical colleges in spite of clear cut red-signals seen by them ahead? Why are they so desperate to consciously go the wrong way, which, they are aware, is wrong?

Is this desperation of the ESIC authorities in the interest of the insured persons?

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ESIC’s Medical College Muddle – Part 1

“Rulers in autocracies create and apply the legal norms governing the social order from above without any participation by the individuals who are subject to them. Whereas democracies, in so far as they allow the greatest possible number of persons to be subject to rules of their own making, approximate a legal order structured around individual autonomy

– Kelsen.

The preamble of the Right to Information Act, 2005 clarifies that the purpose of the Act is to “promote transparency and accountability in the working of every public authority”.

The website of the Government of India, says, “The basic object of the Right to Information Act is to empower the citizens,promote transparency and accountability in the working of the Government,contain corruption, and make our democracy work for the people in real sense.It goes without saying that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable to the governed”.

But, the CPIO of the Headquarters Office of the ESI Corporation maintains total silence and does not respond to many applications sent for seeking various essential details pertaining to the ESIC’s medical college issue. Law permits drawing adverse inference when the public authority does not discharge his legal duty to respond but maintains total silence.

Excerpts from an unanswered application sent by a citizen of India on 19.05.2015 which had been delivered to the CPIO on 25.05.2015 are given below:



1. The Indian public have been informed through the ESIC’s Press Release dated 07.04.2015 that the ESI Corporation had, in its meeting dated 07.04.2015, discussed regarding the provision of “option” to employees/insured persons to choose either ESIC benefits or Health insurances products recognized by IRDA. It has been mentioned in the said press release that “It was felt that if workers have an option it is likely to bring in competition, leading to improvement in service by ESIC ”.

2. I, therefore, request you to kindly supply the following information to me under sec.6 of RTI act 2005.

a. Kindly intimate whether any intensive and extensive study was conducted by any committee of experts who examined the benefits provided under the ESIC act to the employees/insured persons with reference to the benefits alleged to be available to those who are covered under the medical benefit scheme by the IRDA- recognized health insurance providers.

b. If so, please furnish the details of the names of the Chairman and Members of the concerned committee of experts.

c. Please intimate the date on which the said committee had submitted its report to Director General of ESI Corporation.

d. Kindly intimate whether the said committee of experts examined only the medical benefits provided uder the ESI Scheme vis-s-vis the medical benefits provided by the IRDA recognized health insurance providers or whether the cash benefits provided under the ESI Scheme also.

e. It has been mentioned in the said Press Release dated 07.04.2015 that it was “felt” that if the workers had option it will lead to improvement in services. Please intimate, with reference to the record, who “felt” so.

f. Kindly intimate whether the Verbatim Minutes of the ESI Corporation Meeting held on 07.04.2015 is kept, to enable the insured population and the members of the public to ascertain whether any member of the ESI Corporation “felt” so only during the meeting.


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Hostages! Accusation against ESIC & EPFO, without documents !!

During his speech at the time of presenting the budget, Hon’ble Finance Minister had gone on record having said that both the EPF and ESI had kept their beneficiaries as “hostages, rather than clients”.

The ESIC is an important social security organisation to provide the essential security net to the workforce. There had been many illustrious officers right from inception who had toiled for the proper administration of the ESI Scheme. Voluminous books on the ESI Act authored by various legal luminaries would testify to the manner in which the officers of the organisation had striven hard to enforce the Scheme for the public good and to prevent various malpractices by the employers, beneficiaries and the officials of the ESI Corporation.

The financial management of the ESIC had been appreciated by the Economic Times also, as dealt with in detail in various other posts. This department is doing well but it could, definitely, have done better. It could have scaled newer heights in social security.

Politicians well-intentioned & ill-intentioned

But, what is remarkable is that this organisation is doing well, so far, in spite of unlawful interference by many politicians in power who aligned themselves with corrupt bureaucrats at various levels of the organisation, to sabotage the organisation from within. Instead of monitoring whether this autonomous body was administered as per rules to achieve its avowed goal, as was done by many political leaders in power, some politicians who came to power, abetted corruption in various spheres by interfering in the affairs of the organisation, for mala fide reasons. They wanted to play their negative role, even in the matter of transfers and postings. And the damage they had caused, thus, was immense. They used to support the corrupt officers because it was only they who went to those politicians for ‘protection’.

There was many an occasion when such politicians in power virtually crippled the Administration of the Organisation. It is Providence that saved the ESIC this long, from those corrupt bureaucrats and the corrupt politicians in power.

But, now, things are once again drifting towards dark age. The present Finance Minister had chosen to paint the organisation black by accusing the ESIC as a department that held its beneficiaries as ‘hostages’. Moreover, as a consequential measure and as promised by the Minister of Finance in the Budget itself, efforts were taken by the bureaucrats in the PMO, in an unseemly hurry, to get a resolution passed by the Apex Body of the ESIC to amend the Sec.44 of the ESI Act, 1948 to tinker with the structure of this mammoth social security network of the nation. The intention was to allow the private players to enter the arena of social security who would reap a lot of profit and share it with the politicians in power in the name of donation to political parties and otherwise.

Thus spake Dr. Ambedkar

Dr. B. R. Ambedkar had said insurance sector must be only with the Government and  that the government would be able to generate money through it for various public purposes without borrowing otherwise.“Dr. Ambedkar recognises the importance of insurance in providing the state with “the resources necessary for financing its economic planning, in the absence of which it would have to resort to borrowing from the money market at high rates of interest” and proposes the nationalisation of insurance.

He categorically stated: “State socialism is essential for the rapid industrialisation of India. Private enterprise cannot do it and if it did, it would produce those inequalities of wealth which private capitalism has produced in Europe and which should be a warning to Indians.” (Venkatesh Athreya – Frontline – 02.08.2002).

Disclaimer of the Ministry of Labour

As the accusation of the Minister of Finance that the ESIC was holding its beneficiaries as ‘hostages’ was contrary to the reality, it was considered necessary to ascertain the basis on which the Minister had included such a word in his Budget speech.

An application under the Right to Information Act, 2005 had, therefore, been sent to the Ministry of Finance on 09.04.2015.  That  had been forwarded by the Ministry of Finance to the Ministry of Labour vide their letter No. 2 /98670/2015 – RTI dated 13.05.2015. The Deputy Secretary / Nodal Officer of the Ministry of Labour had, in his letter dated 21.05.2015,  directed the SS-I and SS-II divisions of the Ministry of Labour to supply the information. These two divisions have now reported that they did not send any such communication to the Ministry of Finance. We had promised the readers that they would be informed of the developments as and when reply was received from the Ministry of Finance. And, we do inform.

The application and the replies

Copy of the Application dated 09.04.2015 sent under the RTI Act, 2005: RTI to MOF Hostages Page I Page 2

RTI to MOF Hostages Page II

  Copy of the Reply dated 13.05.2015 sent by the Ministry of Finance: Hostage reply MOF Copy of the Reply dated 02.06.2015 sent by the SS-I Division of the Ministry of Labour & Employment: MOL hostage reply SS I Edited Copy of the Reply dated 26.05.2005 sent by the SS-II Division of the Ministry of Labour & Employment: MOL reply on hostages SS II  Edited

ESIC, made to stoop to be conquered

The issue, now, is  how the Minister of Finance included the questionable and depreciative word ‘hostages’ in his Budget speech, delivered before the august body, the Parliament  of India, without keeping, beforehand, any documentary evidence in the form of note from the concerned Ministry of Labour & Employment or from “other” sources. Circumstantial evidence indicates that a consultant working for the caucus of the rich had been using the term ‘hostages’ in his articles written against the ESIC and the EPFO for about two years.

And, the persons-in-power had lent their ears to such a broker and incorporated that term to deride the two important social security organisations of India while presenting the budget on 28.02.2015. These rulers did not think it necessary to check back the veracity of such an allegation, and ascertain the facts from the departments under their own control, in spite of the fact that these two social security schemes were and are the backbone of the nation’s economy preventing various kinds of social chaos.

What becomes clear is that the these power-brokers, who want to belittle the ESIC and the EPFO, wield so enormous a power that they could personally influence the Minister of Finance and plant their choice of words to deprecate these two organisations, through the Minister himself in the Budget speech itself. And, the minister was so obliging and accommodative !

The issue did not stop with the budget on 28.04.2015 only. The same rulers pressured the Director General to place before the meeting of the Apex Body of the ESIC a proposal  to amend Sec. 44 of the ESI Act, 1948, to enable the private players to enter the social insurance sector. It is strange that this proposal for amendment of Sec.44 did not come from the field after proper field survey. It did not emanate from the need of the workforce. The proposal to amend Sec. 44 of the Act came from the top, and it was intended to satisfy the greed of the rich and powerful. Fortunately, the employees’ representatives had been alert and had opposed the proposal so fiercely during the meeting held on 07.04.2015 that the matter was deferred. The persons-in-power had, thus, demonstrated on 28.02.2015 and 07.04.2015 their penchant to make the ESIC to stoop so that it conquered by the rich and the powerful.

Social Security safe only when in Government hands

ESI Act, 1948 came into existence even before the Constitution came into existence in 1950. Art. 41 of the Constitution was framed by the Constituent Assembly keeping in view the fact that the ESI Act, 1948 was already existing. The noble scheme was conceived of with the intention of managing it through the government itself to attain the goal of social security for the masses. The Working Group on Social Security for the Tenth Five Year Plan (2002-2007) wanted expansion of the Scheme. 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.“

But, the scheme is, now, being given a bad name by the rulers, with the mala fide intention of enabling the private players to enter the insurance field with (huge) profit motive. An organisation meant for service by the Government is converted to become a profit and loss venture for private players.

The ESI Scheme can be run successfully and must be run only by the government  but without any scope for corruption. It is the politicians in power who are mainly responsible for the non-performance of the organisation in any sector. They must rise up to the occasion and see that the Scheme is run properly. There is no public interest in freeing the social security field from State control and allow private players to play with the lives of the people.

Dr.Ambedkar has said that “liberty from state control is another name for the dictatorship of the private employer”. Sage words ! (For more: Frontline – July 20-Aug 02, 2002)


The Director General, ESI Corporation also did not send any report to the Ministry of Labour & Employment regarding the allegation that the ESIC was holding its beneficiaries as ‘hostages’ as reported by the Finance Minister in his budget speech. The Ministry of Labour has confirmed that it did not receive any such information from any other source. (Vide MOL&E letter No. RTI / 45 / 2015 – SS-I dated 02.06.2015). This letter is added to the article today. Hostages MOL reply edited


Further update on 19.06.2015:

The reply from the Ministry of Finance that they do not have any information about the source from which the word ‘hostages’ was chosen to be used in the budget speech, while referring to the state of beneficiaries of the ESI Corporation.

Hostages MOF reply edited



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The Gulbarga Extravaganza ! Frittering away the Insured Persons’ money !!


Gulbarga ESIC Hospital

The Annual Report 2012-13 (Page 22, Item 48) of the ESI Corporation shows that for the purpose of Construction of Medical College, Dental College and Nursing College at Gulbarga, Karnataka, a sum of Rs. 929.05 crores had been allocated, excluding cost of equipments and escalation cost. But, as on date, it is understood from reliable sources that the total expenditure so far incurred is about Rs. 1600 crores. Even if the figure is 929.05 crores as reported in the Annual Report as on 31.03.2013, the nature of such extravagant expenditure would become evident from the observation of the Hon’ble Chief Minister of Tamil Nadu, who has, in his letter dated 11.03.2015, sent to the Hon’ble Prime Minister regarding the infrastructure created in Chennai and Coimbatore, stated very clearly as follows: “the cost at which these Medical College projects have beenundertaken is very high, as establishment of a Government Medical College and hospital by the State Government works out to only around Rs. 200 crores. Even for the Medical Colleges funded through Government of India, the Project cost has been indicated as Rs. 189 crores only”. ESIC-Gulbarga-Medical College The number of insured persons there at Gulbarga is shown to be 40700 (Page 47 AR 2012-13 as on  31.03.2013). But, the effective strength is reported to be about 12900 only. The monthly recurring expenditure at present is also reported to be around  Rs. 3 crores. Yet, the building remains unutilised till date and the Government Hospital in Gulbarga is utilised as the venue for the medical and other colleges. Gulbarga Medical College

4,00,000 Vs 40,000

The CAG has reported that while opening 500 bed hospital at Gulbarga, the norms for existence of minimum number of insured persons were not followed and the locations were incorrectly selected.  It said, “As per ESIC norms, minimum 400000 IPs are required for establishing a 500 bed hospital. Audit observed that the number of IPs in Gulbarga (Karnataka) and Mandi (Himachal Pradesh) were only 40700 and 207100 respectively (as on 31 March 2013). Thus, decision to establish hospitals at these two places was imprudent as these did not fulfill minimum required norms. ESIC stated (May 2014) that a sub-committee of the Corporation was currently examining the norms for setting up of Medical Colleges.  (Para 5.1.2). Hostel for Gulbarga ESI Medical College Para of the CAG Report says: “The ESIC entered into MOU with the State Government of Karnataka on 22 September 2012 to tie up its medical college with the Government District Hospital, Gulbarga for functioning as a teaching hospital to fulfil the MCI norms. ESIC also agreed to incur the expenditure on the District Hospital to make it MCI compliant. However, approval for the expenditure on district hospital, Gulbarga to make it MCI compliant was not taken from the Ministry. Thus, the ESIC incurred irregular expenditure of Rs. 22.72 lakh per month (recurring since January 2013) on staff and equipment and Rs. 18.11 lakh (one time) for renovation etc., in the district hospital, Gulbarga which is open for general public and not specifically for the IPs”. Gulbarga ESI Medical College

Later realisation and regret

The Corporation later, after spending so much money of the insured persons,  realised in May 2014, that “Setting up and running of Medical Colleges is a cost intensive proposition in respect of capital cost, recurring cost, loss of revenue, etc.,”. (Para 6.g. of the Summary Record of the 3rd meeting of the ESIC Sub-Committee on Medical Services and Medical Education held on 13.05.2014). In the month of July2014, the Ministry of Labour informed the Prime Minister that the ESIC did “not have the core competency to run medical colleges” and that it would entrust the medical colleges to the respective state governments. In the month of December 2014, the ESI Corporation, the Apex Body that runs the organisation, took the decision to “exit the medical education entirely”.

Order dated 05.01.2015

A circular was issued on 05.01.2015 by the Director General advising Deans of the ESIC medical institutions that —

  1. “ESIC should exit the field of medical education entirely as it is not the core function of the ESIC and the objective of Section 59-B of the Act is unlikely to be met.
  2. Hand over on-going medical colleges and other Medical Education Institutions having separate infrastructure to State Governments willing for such transfer.
  3. ESIC may neither undertake further admissions in the medical colleges and other Medical Education Institutions (PG, Nursing, Para-medical & Dental, including Dental College, Rohini) nor start new medical colleges. All ongoing Medical Education programs may continue till the admitted students pass out or (they) are adjusted as per provisions of the Essentiality Certificate issued by the State Government, whichever is earlier.”

Order dated 18.03.2015

However, there was a ‘U’ turn on 18.03.2015 and it had been decided by some authorities to admit students for the next batch: The circular said:

  1. “Admissions to ongoing MBBS / BDS / PG Courses at ESIC Medical Education Institutions shall be continued.
  2. The seat matrix for admissions to ongoing MBBS / BDS / PG Courses for 2015-16 session may accordingly be communicated to the relevant authorities for the All India Quota (AIQ) and State Quota (SQ), as applicable to your Institutions promptly.”

The issue is that the funds of the insured persons are going to be wasted more and more and the future of the students who join the next batch would also become a question mark. Already, the PG students who passed out in the year 2014 could not register themselves, as their courses are stated to be ‘not-recognised’. Another batch of students, those who pass in 2015 would be joining them now. It is said that the later order dated 18.03.2015 has been issued in the interest of students. How can the interest of existing students be served by bringing in new students? What about the interest of the insured persons whose money has been squandered away so long and will continue to be squandered away by admitting new batches and continuing with medical education? 


 photo courtesy: and ESIC websites. For more: June 29, 2009: “Mr. Kharge has emphatically stated that he would pump in Rs 100 cr during the current year itself for the ambitious venture.” That was in the year 2009-10 while the ESI Act got amended to enable setting up medical colleges only in the next year 2010-11. September 19, 2012: August 1, 2014: August 23, 2014:


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Warning from Mr. Robert Reich ! Will we save the workforce from ‘hell’?

Readers may please recall the attempt of the present day rulers to bring in a legislation titled “The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014”, to facilitate the rich businessmen to exploit the working population with immunity and impunity. The details have been provided in the Post in the following link:

Now, Mr. Robert Reich, former Secretary of Labour to the Government of the USA, has recorded in detail how the businessmen of USA are exploiting the workforce there and how the latter suffers under the tyranny of improper labour laws. The Small Factories Bill would, in India, make the life of working population even harsher.

The rich want only profit and they are ready to go to any extent to achieve their greedy ambitions. But, it is the Government which must reign them in. It is a pity that the Congress was and the BJP is bending backwards to please only the rich. The article of Mr. Robert Reich throws light on the sufferings of the common people in the USA. In India, a land with curtailed human rights when compared to the USA, the situation of the labour will be worse, if the aforesaid Small Factories Bill is made law.

While addressing businessmen, in the year 1945, after the Second World War, UK Minister Ernest Bevin stressed on the need for providing basic economic security to create fairer conditions of living for the working population also. “If profit can be the only motive, the natural corollary is economic disorder, and economic disorder will bring you back to the same position you are in now, ever recurring, and future generations will again pay, in the same form or another, the bitter price we are paying now…” he said. But, there is no Ernest Bevin among Indian rulers. The Indian politicians are always willing to go the way the rich wants them to go. They do not care for the poor. Businessmen drive the politicians in the USA. But, they own the politicians in India.

Readers may decide what the future holds for India, after going through what Mr.Reich says:

Courtesy: Facebook and www. salon. com

Courtesy: Facebook and www. salon. com

“These days it’s not unusual for someone on the way to work to receive a text message from her employer saying she’s not needed right then.

Although she’s already found someone to pick up her kid from school and arranged for childcare, the work is no longer available and she won’t be paid for it.

Just-in-time scheduling like this is the latest new thing, designed to make retail outlets, restaurants, hotels, and other customer-driven businesses more nimble and keep costs to a minimum.

Software can now predict up-to-the-minute staffing needs on the basis of  information such as traffic patterns, weather, and sales merely hours or possibly minutes before.

This way, employers don’t need to pay anyone to be at work unless they’re really needed. Companies can avoid paying wages to workers who’d otherwise just sit around.

Employers assign workers tentative shifts, and then notify them a half-hour or ten minutes before the shift is scheduled to begin whether they’re actually needed. Some even require workers to check in by phone, email, or text shortly before the shift starts.

Just-in-time scheduling is another part of America’s new “flexible” economy – along with the move to independent contractors and the growing reliance on “share economy” businesses, like Uber, that purport to do nothing more than connect customers with people willing to serve them.

New software is behind all of this – digital platforms enabling businesses to match their costs exactly with their needs. The business media considers such flexibility an unalloyed virtue. Wall Street rewards it with higher share prices. America’s “flexible labor market” is the envy of business leaders and policy makers the world over.

There’s only one problem. The new flexibility doesn’t allow working people to live their lives. Businesses used to consider employees fixed costs  – like the costs of factories, offices, and equipment. Payrolls might grow or shrink over time as businesses expanded or contracted, but from year to year they were fairly constant. That meant steady jobs. And with steady jobs came steady paychecks along with regular and predictable work schedules.

But employees are now becoming variable costs of doing business – depending on ups and downs in demand that may change hour by hour, possibly minute by minute. Yet working people have to pay the rent or make mortgage payments, and have keep up with utility, food, and fuel bills. These bills don’t vary much from month to month. They’re the fixed costs of living.

American workers can’t simultaneously be variable costs for business yet live in their own fixed-cost worlds.

They’re also husbands and wives and partners, most are parents, and they often have to take care of elderly relatives. All this requires coordinating schedules in advance – who’s going to cover for whom, and when. But such planning is impossible when you don’t know when you’ll be needed at work.

Whatever it’s called – just-in-time scheduling, on-call staffing, on-demand work, independent contracting, or the “share economy” – the result is the same: No predictability, no economic security.

This makes businesses more efficient, but it’s a nightmare for working families.

Last week, the National Employment Law Project reported that 42 percent of U.S. workers make less than $15 an hour (*). But even $20 an hour isn’t enough if the work is unpredictable and insecure. Not only is a higher minimum wage critical. So are more regular and predictable hours.

Some states require employers to pay any staff who report to work for a scheduled shift but who are then sent home, at least 4 hours pay at the minimum wage. But these laws haven’t kept up with software that enables employers to do just-in-time scheduling – and inform workers minutes before their shift that they’re not needed. In what may become a test case, New York Attorney General Eric Schneiderman last week warned 13 big retailers – including Target and The Gap – that their just-in-time scheduling may violate New York law, which requires payments to workers who arrive for a shift and then are sent home.We need a federal law requiring employers to pay for scheduled work.

Alternatively, if American workers can’t get more regular and predictable hours, they at least need stronger safety nets. These would include high-quality pre-school and after-school programs; unemployment insurance for people who can only get part-time work; and a minimum guaranteed basic income.

All the blather about “family-friendly workplaces” is meaningless if workers have no control over when they’re working”.


*NB: Workers across the USA are fighting for the minimum wages of $15 per hour. For more:

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