Category Archives: Amendments 2010

Validation Clause: An IP’s letter to the ESIC Members !

Excerpts from the letter sent by an Insured Person to the Members, who are Employers’ and Employees’ representatives in the ESI Corporation: 



1. Mr. Sudershan Sareen,

2. Mr. G.P. Srivastava,

3. Mr. B.C. Prabhakar,

4. Mr. Michael Dias,

5. Dr. U.D. Choubey

6. Mr. Rajinder Singh Maker

7. Mr. Vijay Kalantri

8. Mr. Rama Kant Bharadwaj

9. Mr. Badish Jindal

10. Mr. Bharat Mehta

11. Mr. Ram Kishore Tripathi

12 Mr. Prashanta Nandi Chowdhury

13. Mr. Gokulananda Jena,

14. Mr. V. Radhakrishnan,

15. Mr. Ajit Sripad Kulkarni,

16. Mr. Dilip Bhattacharya

17. Dr. G. Sanjeeva Reddy

18. Mr. Chandra Prakash Singh

19. Mr. K. Suresh Babu

20. Mrs. Amarjeet Kaur

Sub: Construction of buildings for Medical Institutions in the ESIC – Expenditure during the pre-amendment period – remaining as an unauthorized expenditure till date – false statement by the authorities of ESIC before Court.

Ref: 1. Para 8 of the Affidavit of the Petitioners in the W.P. 12953 of 2015 before the Hon’ble High Court.
2. Para 11 of the Counter-Affidavit filed by the ESI Corporation, the Respondents 2 & 3, therein, in the same W.P. 12953 of 2015.
3. Para 76 & 77 of the Report dated 04.12.2009 of the Parliamentary Standing Committee on Labour & Employment.


Sir/ Madam,

I invite your kind attention to the references cited and request you, one of the trustees of the ESI Corporation and the custodian of the ESI Fund, to kindly bestow your personal attention to the issues raised in this letter. This letter arises out of the pleadings of the parties in the W.P. 12953 of 2015 in the Hon’ble High Court of Chennai and explains the manner in which the officials of the Hqrs. Office had deliberately misled the Hon’ble High Court by submitting false statements, even when they were on oath, in the matter of construction of buildings for medical institutions and setting up medical colleges, nursing colleges and training institutes for para medical staff that involves massive expenditure of thousands of crores of rupees.

2. I request you to kindly recall the fact that the ESI Act was amended by the Parliament only on 03.05.2010 to insert Sec. 59-B therein, to empower the ESI authorities to set up medical institutions. The Bill for such amendment, tabled in the Parliament of India on 30.07.2009, contained the following as Clause 15:


Clause 15

The said clause was approved and passed by the Parliament of India as Sec. 59-B on 03.05.2010, the assent of the President obtained on 24.05.2010 and the amended provision became effective from 01.06.2010. as per the decision of the Ministry of Labour and Employment. Sec. 59-B which is in force as on date reads as under, in Clause 17 of the ESI (Amendment) Act, 2010:

Clause 17

It would thus become clear that the authorities of the ESIC did not have the authority to incur any expenditure to construct buildings for medical colleges or to incur expenditure to appoint Deans and Professors, or to spend money to engage even Consultants for setting up of medical colleges, at any time, before 01.06.2010, the pre-amendment period.

3. But what had actually happened was that the authorities of the ESIC had, during the pre-amendment period from 2008 to May, 2010, incurred thousands of crores of rupees and that exprenditure remains an irregular and unauthorized expenditure till date. They had spent such a huge sum of public money even before the Bill was tabled in the Parliament in July 2009.

4. This, in spite of the fact that Sec. 28 of the ESI Act, does not permit expenditure of ESI Fund for purposes which are not within the purview of the Act. The opening sentence of the said Sec. 28 makes it very clear that the ESI Fund can be expended “subject to the provisions of this Act”. The rules can be made by the Central Government to spend ESI Fund, only with reference to the purposes mentioned in the Act. Significantly, no provisions in the Act permitted setting up of medical institutions before 01.06.2010. Besides, no “Rules” have so far been framed by the Central Government to spend ESI Fund for the purpose of construction of buildings for medical colleges. Thus, even Sec. 28 (xii) of the Act cannot be used to justify the expenditure incurred during the aforesaid pre-amendment period. There was no authority for anyone in the ESIC to permit expenditure from the ESI Fund for any purposes relating to the setting up of medical institutions, before 01.06.2010. The expenditure incurred actually by the authorities of the ESIC, thus, during the abovementioned pre-amendment period, was, therefore, an unauthorized one.

5. This fact had been referred to in the pleadings before the Hon’ble High Court of Madras at Chennai in W.P. 12953 of 2015 which had been filed with reference to the issue of new-admission of students into the ESIC-run medical colleges for year 2015-16. Paragraphs 8  of the affidavit of the Insured Persons who filed in the said case read as under:

“8. But, overlooking the importance of the Scheme in the making of the nation, all of a sudden an administrative decision was taken in the year 2008 to set up more than 28 medical colleges throughout the nation. A Chief Engineer was also appointed in violation of the recruitment rules on the subject, in a hurry and hundreds of crores of rupees were sanctioned under his signature for constructing buildings for medical colleges. But, there was no provision at all, at that time, in the ESI Act authorizing the ESI Corporation to establish and run medical colleges. A Bill for amending the ESI Act to empower the ESI Corporation was introduced only later, in the year 2009, in Lok Sabha, as Bill No. 66-C of 2009. That Bill was got passed by the Lok Sabha only on 03.05.2010. The provisions of the Amended Act came into force only on 01.06.2010. These events would prove that the expenditure incurred for constructing buildings for so many medical colleges by the Respondent-2 before 01.06.2010 was, clearly, an unlawful and unauthorized expenditure. It is learnt that such expenditure sanctioned and incurred upto 31.05.2010 itself was around Rs. 10000 crores. The expenditure incurred from and after 01.06.2010 till date is not taken into account here and is said to be more than Rs. 15000 crores.

6. But, the ESIC had filed counter-affidavit stating that the expenditure thus during the pre-amendment period was regularized through the Validation Clause in the Amendment Act, 2010. Their reply in Para 11 of the Counter-Affidavit said, “The Validation Clause in the ESI (Amendment) Act of 2010 (18 of 2010) provides for all expenses incurred.” This statement regarding the Validation Clause, is a deliberate and conscious lie on the part of the officials of the Hqrs. Office of the ESI Corporation besides being blatant perjury in the sworn statement. The authorities had fearlessly made such stunningly false statements before the Hon’ble High Court itself. The said Para 11 is reproduced below:

“11. I submit that the contention of the Petitioners made in Para No. 8 of the Affidavit is misleading in that the decision to set up medical colleges across the country was taken with a view to improve medical care facility to IPs (Insured Persons) and their dependants. The Validation Clause in th ESI (Amendment) Act of 2010 (18 f 2010) provides for all expenses incurred. The expenditure incurred on 12 ongoing medical college projects including the medical education complex at Gulbarga till 30.09.2014 is around 5350 crores only.”

7. The fact is that the Validation Clause had not, at all, been inserted in the Bill 66 of 2009 to ratify the actions and inactions of the Respondents with reference to the expenditure incurred for setting up medical educations or for constructing buildings for medical colleges. In fact, the Parliament was not even made aware of the fact that the Respondents had already taken action (a) for construction of medical colleges, (b) for the payment of salary of Deans and Professors (without students) and (c) for payment of fee to the consultants. To be more precise, the Parliament was not aware that the ESIC authorities had spent thousands of crores of rupees even before the Bill for amendment was placed on the table of Lok Sabha on 30.07.2009.

Ordnance First Page

Ordnance First Page

8. The Validation Clause had, actually, been inserted only to ratify the action or inaction on the part of the Respondents with reference to the ESI (Amendment) Ordinance, 2008 which was promulgated on 3.7.2008 (Ord. 7 of 2008) for opening of facilities in ESI Hospitals to other beneficiaries on payment of user charges. The ESI (Amendment) Bill, 2008 (Bill No. 56 of 2008) which had been tabled in the Parliament on 29.09.2008 could not become Act and the Ordinance got lapsed in due course. It was in that context, the Validation Clause was inserted in the ESI (Amendment) Act, 2010 to regularize the action or inaction with reference to the aforesaid Ordinance, when it was in force. Para 76 & 77 of the Report of the Parliamentary Standing Committee on Labour, which examined the Bill No. 66 of 2009 as per the directions of the Hon’ble Speaker of Lok Sabha, would testify to this fact.

9. The observations of the Parliamentary Standing Committee on Labour regarding the need for Validation Clause are reproduced below:
“76. It is proposed to validate actions or measures taken during the period beginning on or after 3rd July, 2008 till the commencement of ESI (Amendment) Act, 2009.
77. The Ministry in their explanatory note stated as under:- “The ESI (Amendment) Ordinance, 2008 was promulgated on 3.7.2008 for opening of facilities in ESI Hospitals to other beneficiaries on payment of user charges. However, as the Bill to amend the Act to replace the Ordinance could not be taken up in the Parliament due to dissolution of 14th Lok Sabha, the Ordinance lapsed. Hence, it is proposed to validate any action taken based on the Ordinance. Grant of exemptions by the State Governments result in denial of social security benefits to workers as well as under-utilisation of infrastructure created for the insured persons of that area. It is therefore proposed that such exemptions may be granted judiciously only where benefits substantially similar or superior to the benefits provided under this Act are provided by the employers.”

Amendment Bill of 2008 that could not be passed because of the dissolution of the Lok Sabha.

Amendment Bill of 2008 that could not be passed because of the dissolution of the Lok Sabha. If this Bill had been passed in 2008, there would have been no Validation Clause in the ESIC (Amendment) Act of 2010. 

10. These observations of the Parliamentary Standing Committee would very clearly prove that the Validation Clause had no connection at all and had nothing to do with the colossal expenditure incurred by the ESIC authorities during the pre-amendment period upto and including May, 2010 for construction of buildings for medical institutions of the ESIC and other expenditure for this purpose.

11. The ESIC authorities are, therefore, …………………. in their pleadings, that irrelevant Validation Clause to justify the unlawful expenditure incurred by them to set up medical institutions, during the said pre-amendment period. Moreover, it is a fact that the ESI Funds had been siphoned away in the name of construction of medical institutions, from December 2007 onwards, immediately after a Chief Engineer was appointed unlawfully on 28.11.2007, while the Validation Clause talks of the events that had taken place, seven months later, only from 03.07.2008 (with reference to the lapsed ESI (Amendment) Ordinance, 2008).

12. The very fact that the ESIC authorities could not produce any evidence in …………..which was about Rs. 10000 crores, remains an unauthorized one till date.

13. I, therefore, request you to kindly ascertain all the facts pertaining to the incorporation of such a deliberate …………….

14. In the context, it would be helpful to you to understand the attitude of the authorities, if you know the fact that they are maintaining total and unlawful silence to the application of Mr. K. K….. under the RTI Act on 10.07.2015 (Copy enclosed). He had asked for the simple information regarding details of the so-claimed actions and inactions in the field of construction of buildings for and setting up of medical colleges which were proposed to be regularised by inserting that Validation Clause. But, no reply has been given under the RTI Act by the officials of the till date.

15. It would be appropriate, if you could use your good offices to place the issues raised in this representation as an Agenda point before the next meeting of the Standing Committee / ESI Corporation and request the authorities to explain their case to all the Members present in the meeting and get the details recorded in the Minutes thereof. It would be better if you could use your influence as a Member of the ESI Corporation and try to obtain the information even earlier to avoid wastage of time, in seeking legal remedy through Court of Law. It is proposed to seek the kind intersession of the Hon’ble High Court on this issue by filing a Writ in February, 2016.

16. A line in reply about the initiative taken by you, with reference to this representation would, therefore, help me to place the facts before the Judiciary besides convincing my co-beneficiaries of the ESI Scheme to repose faith in you and trust that you are acting in the interests of the ESI Corporation, safeguarding the ESI Fund and, thereby, protecting the interests of the insured persons, when the authorities of the ESI Corporation are indulging in the organised crime of mismanagement of public funds that runs into crores and crores of rupees.

Thanking you on behalf of millions of insured persons like me,
I remain,
Yours faithfully,

Statement of Objects and Reasons that accompanied the Amendment Bill of 2008

Statement of Objects and Reasons that accompanied the Amendment Bill of 2008


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Filed under Amendments 2010

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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Filed under Amendment 2015, Amendments 2010

Passing urine for the third time? Fine Rs. 20 !

The UK is not a democracy. People are not sovereign there, till date ! The UK remains only a Constitutional Monarchy. The UK joined the EEC on 01.01.1973. Conservative Party which was in power was in favour of remaining in the EEC while the Labour was against it. In the general elections of 1974, Labour won the elections. Just because Labour captured the Parliament, it did not use ‘that’ power to withdraw the UK from the EEC. Harold Wilson, the Labour Prime Minister and his party MPs did not choose to arrogate to themselves the authority to decide the issue as they pleased.

When an issue that was going to affect the people of the nation economically in a far-reaching way and when the forecasts of economists were based on the theory of probability and not certainty, the MPs of the ruling party in Britain acted with caution and concern. They did not want to play with the lives of the people. They did not want to demonstrate self-righteousness, by acting overwise and assuming responsibility, if the predictions and speculations of the economic pundits went wrong, later, on economic front. Parliament decided to consult the electorate on the question whether the UK should remain or not in the EEC. A Referendum was held, in 1975. And, the people voted for it. That vote was against the stand taken by the ruling Labour Party before it contested and won the elections in 1974.

Click on the image to go to the Text of the Referendum

Click on the image to go to the Text of the Referendum

The Grace and the Disgrace

Was it obligatory for the M.Ps of the U.K. to refer the matter to the people to be decided through referendum? No. They could have learnt a lesson or two from the political leaders of India and could have done whatever they liked. Because, once elected, the MPs, practically, constitute an oligarchy and could join together and range themselves against the people of the nation. They have been given the law-making power with which they could make any law on economic matters. Still, the MPs in the UK did not abuse the power vested in them by the people in trust. They knew the concept of moderation in wielding political power as representatives of the people. They acted graciously as the representatives of the people and wanted the people themselves to decide the issue of being part of mini-globalisation process called European Common Market. The people of the UK were sovereign in that Constitutional Monarchy.

But, Indian politicians who inherited the British pattern of Parliamentary system never exhibited such grace or maturity to work that Parliamentary System in India. They demonstrated time and again that they cared two hoots to adhere to the well-established British conventions that pave way for a civilised public life. They had, long back, given a go-by to the admirable British conventions in electing Speakers, allowing the MPs to exercise Conscience Votes, using the Parliament forum for real discussion without creating pandemonium, etc., It is plain disgrace to jettison the Conventions that accompanied the Constitution. The Constitution is the letter while the Convention is its spirit.

Conventions are invisible part of the Constitution

“A complete account of the Constitution, therefore, involves a statement of central custom as well as of central law” – Sir John Salmond). But, Indian politicians have cultivated a habit of acquiring power by resorting to all foul means and retaining that power by resorting to all questionable means and using that power to do all kinds of unholy activities. Instances are too numerous to cite. All because the Indian politicians do not care for the Conventions go along with the Constitutional provisions. When the issues pertaining to such Conventions were discussed in the Constituent Assembly, there was demand from some members for reducing those conventions in writing. But, the majority of the Founding Fathers considered that it was not necessary to do so.

They believed that their descendants would also be honest in public life. They, therefore, believed that those unwritten conventions would be followed in India, even if they remained unwritten. Clauses like “I think we would trust”, “ I hope”, etc., had been used to pacify the members, who raised doubts whether the relevant provisions would be abused in future. “(… Of the democratic systems which are prevalent in the world) we have adopted largely the British model…..what I feel is this, that in this country, we should develop the conventions which go with the democracy in England and those conventions govern not only the Government – but also the people” – From the address of the President Rajendra Prasad to the people of Chennai on 15.08.1950), But, the descendants have betrayed the Founding Fathers.

Rules of Morality

Conventions under British Parliamentary procedure are called as Rules of Morality. But, the Indian political leaders do not care for those Conventions because they do not, actually, care for Morality in public life. The nation has seen it on numerous occasions. “The rules of Parliamentary procedures in India are modelled on the practice of conventions that obtain in the Mother of Parliaments – The House of Commons” ( Parliamentary Procedure in India – A.R. Mukherjea, Former Secretary to West Bengal Assembly – Oxford University Press)

‘Say anything to please the masses to occupy the power-centre and do everything that pleases you after occupying the power-centre’ is the Convention invented by the Indian politicians. They keep their manifesto unenforceable by law. They believe that once they get majority they can do anything and everything they like, in the belief that the nation has been given on unconditional lease to them by the people for five years. And that kind of belief gives them courage to bring in laws to suit the convenience of their financiers, the business-magnates, without bothering themselves about the state of society in the long run.

Such political leaders choose to keep their MPs as ignoramus. They are happy to have only ignorant and inefficient MPs who would be just loyal to the leader and would not have any opinion on any issue. That, they see as their power. These leaders do not have any inhibition when their nation itself is ridiculed by others in the international arena.

Ignorance and greed makes them easy victims to Shylocks

The MPs, on their part, are happy about their status as MP and the privileges and pelf that accompany that status. They do not bother about acquiring knowledge on the issues that affects the people. They do not talk of the people’s problems in the Parliament by analysing the issues. But, they boast of their ability to shout in the Parliament to stall the proceedings. They want money to ask questions in the Parliament on public issues, when people approach them and apprise them on the issues that must be taken to the knowledge of the rulers through the House.

Such a situation is tailor-made for business magnates to get anything done through such government. purchase anything from and through that Government. In the year 1985 itself, Swiss Government had declared that it had no intention to be a haven for any ill-gotten money, when the issues pertaining to black money on foreign soil was discussed in Parliament. Yet, the politicians in power drew the blank for the past 29 years while, at the same time, they kept pretending that they were against black money. As long as the political parties are run on black money, the nation’s future will continue to be bleak. Every political party that gets scared and runs for cover when asked about transparency of its sources of funds is, actually, anti-poor and pro-rich in its activities, and its leaders cannot claim and do not have the right to claim that that party would usher in an honest society.

Because, the political parties that make ‘collections’ for elections are not able to resist the Moneybags. Offer of large sums of money is so attractive to these politicians that they are not able to resist the pressure from the businessmen. They are, therefore, willing to betray the people and make them slaves who could be used, disposed of and dispensed with by the rich. They use their ‘power’ to advance the purpose of the ‘rich’. Corporates actually pay money to the political leaders to purchase them. Such a collection is, really, not a donation but payment for certain quid-pro-quo, for which they pressure the political leaders at the opportune moment. And, the political leaders do not blink an eye before yielding to such pressures with money. The eagerness and appetency exhibited by the rulers in pressing on with the Land Acquisition Bill, Small Factories Bill, and the present proposal to dilute the provisions of the ESI Act, 1948 are symptomatic of their willingness to yield to the money-pressure from the Shylockian business world.

Sky-high powers of Indian politicians

The politicians in India wield more powers than permissible in a mature democracy. That must be reduced. There must be more checks and balances in the interest of the nation. When the 123 agreement was signed, the USA did not accept it at once. It was placed before the Congress and Senate where amendments were suggested. Indian PM agreed to that amendment. But, that agreement was given by him without the formal knowledge of the Indian Parliament. Thus, in practice, Mr. Manmohan could do whatever he wanted while Mr.Bush could not.

In the case of Sri Lankan agreement the then Prime MInister Rajiv Gandhi had, without any sense of restraint, signed an agreement with Jayawardane for placing the sovereign Indian Army at the disposal of a foreign head of state. That agreement was not placed before the Parliament before making it enforceable. But, In Sri Lanka, that agreement had to be placed before the Parliament for approval before enforcement. Moreover, as a result of the misguided filenotings of the bureaucrats of the MEA, the improper agreement that had been signed, resulted in India witnessing the ignominy of seeing its sovereign army sent packing by the subsequent President of Sri Lanka unilaterally on 15.06.1989.

IPKF sent back In India, the Indian politicians have demonstrated time and again that they would to to any extent to use and abuse their power and were not bound to follow any British conventions like Referendum. So much power in them is not in the interest of the nation, at all.

The healthiest nations

The society cannot expect such political leaders to stand up to the might of the corporate moneybags. There will, therefore, be wide gap between the rich and the poor and the gap will continue to widen in India with every passing day. A Canadian study suggests that the wealthiest nations do not have the healthiest people; instead, it is countries with the smallest economic gap between the rich and poor. (Mark Bourrie – Inter Press Service -23.7.1999). But, the Indian politicians, who rely upon Corporates for their own survival, do not have the intention or, even, desire to usher in such a healthiest society in our nation.

Presentation 1

The Voice of Reason and Justice

In Samatha vs. State of AP (1997), Hon’ble Apex Court has held, “The core constitutional objective of “social and economic democracy” in other words, just social order, cannot be established without removing the inequalities in income and making endeavour to eliminate inequalities in status through the rule of law. The mandate for social and economic retransformation requires that the material resources or their ownership and control should be so distributed as to subserve the common good. A new social order, therefore, would emerge, out of the old unequal or hierarchical social order. The legislative or executive measures, therefore, should be necessary for the reconstruction of the unequal social order by corrective and distributive justice through the rule of law”. 

✓ ESI Act, 1948, and the other labour laws aim at ensuring distributive justice. ✓ Social and economic democracy can be achieved best only through ESI Act, 1948. ✓ And that is what the Scandinavian countries and Germany, the cradle of Social Security, have taught us, in spite of our not being ready to learn from them.


But, that is Not Enough

Although the benefits under the ESI Act, 1948 are par excellence, we have not travelled the entire distance in providing social security to the people, by taking the Act forward to various sectors as mandated by its Sec. 1(4). Diluting the provisions of ESI Act, 1948 would result in perpetuation of unequal and hierarchical social order, which must be shunned away. When the rulers advocate globalisation in everything except their area, I.e.. politics, they must spare a few moments for the working population too and improve the social security measures which is considered as the “human face of globalisation”. Because, the assessment of the ILO, in the year 2010, is that India has not done enough in Social Security space.

India ILO on Social Security16.11.2010, Times of India.

It is, therefore, time to improve upon social security measures instead of doing the opposite as is being done by the present rulers.

Do not widen the gap between rich and poor

Hon’ble Supreme Court referred to the following statement of Dr. Ambedkar too, in the aforesaid judgment:

“…On the economic plan, we have a society in which there are some who have immense wealth as against many who live in abject poverty. We cannot afford to have equality in political life and inequality in economic life. How long shall we continue to live this life of contradiction? How long shall we continue to deny equality in our social and economic life? We must remove this contradiction at the earliest possible moment or else those who suffered from inequality will blow up the structure of political democracy which this Assembly has laboriously built up.”

Willing participation of Labour

Privatisation of the ESIC is not a panacea for any evil that is afflicting the society. It would make the life of the working population even more miserable. Let the rulers not hurry into misadventures, just because they have the power, now, and send the society into disarray. Taking action to run the organisation corruption-free would ensure that the working population feels secure ensuring, thereby, willing participation of labour in the making of the nation.

Hold Referendum

It would only be proper if the rulers are made by the people to come to them with a Referendum on the major policy matters like the

◆ Land Acquisition Bill.

◆ Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014,

◆ Privatisation of ESIC by diluting the provisions of the ESI Act or simple dilution of the provisions of the ESI Act, etc.,

Already, when the requirement of formal inspections by the Department of Labour had been relaxed, the employers at Vellore imposed a fine of Rs. 20, if the workers visited the urinal for the third time in a day.

Business Standard, November, 2010

Business Standard, November, 2010

The workers who earn only Rs. 4300/- p.m, but sign the records for Rs. 4500/- learnt to be ‘careful’ to go for urinal only for two times a day. (Business Standard, November 2010). They control themselves not to go for the third time, except when they are desperate. Because, they find that such wage-cuts because of the third and subsequent visits cost around Rs. 500/- per month. That was none of the botherations of Mr. Manmohan Singh who was working overtime to spread red-carpet to Walmart. Mr. Narendra Modi is walking the same path and more concerned about Adanis. With the abdication of responsibility of the Government in providing social security, the conditions of service would worsen and the Indian labour market would be converted into Slave Labour market. Our freedom struggle was not to free ourselves from being slaves to British traders to become slaves to Indian traders.

It is Distributive justice which ushers in a Just society through Social and Economic Democracy. Neither the Communist Parties which demand and accept funds from the Corporates nor the Trade Unions of other political parties which are funded by the Corporates can rescue the working population from slavery, as long as these political parties shy away from being transparent about their source of finance.

In the circumstances, in India, among other labour laws, it is only the government machinery like the ESIC which makes it best achievable !

Forward in 1919 & Backward in 2015

The ILO Charter of 1919 diagnosed that peace and harmony of the world got imperilled because the conditions of labour that existed earlier involved such injustice, hardship and privation to large numbers of people as to produce unrest. The Charter wanted the nations to adopt humane conditions of labour. The High Contracting Parties went by the sentiments of justice and humanity and said that they were constituting the ILO to secure “permanent peace of the world”.

There is such a close connection between the social security measures and peace and harmony in the world.

The ILO Charter read: “The High Contracting Parties, recognising the well-being, physical, moral and intellectual of industrial wage earners is of supreme international importance, have framed, in order to further this great end, the permanent machinery” called the ILO. With employers imposing fine for the calls of nature, and with Governments ignoring these cruelties and refusing to inspect the factories through Labour Departments,in the name of liberalisation and globalisation, India is going back to the pre-1919 era.

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Wages: The foresightful Sec. 2 (22) !

It was 1989-90. An employer, a well-known business magnate, having many business interests in many fields, had paid Rs. 10 as Attendance Bonus to his employees who attended factory on all the 26 working days in a month. The Insurance Inspector (Now, SSO) reported that the employer had not paid contribution on that amount. Notice in Form C-18 (Ad hoc) was issued in 1991-92. The amount claimed as contribution on omitted wages was around Rs. 1600/-.

The employer’s representatives attended hearing and explained their stand. They said that it was not an amount paid as per any settlement between the employees’ union and the management. It was not a bilateral decision. It was an unilateral one and could be withdrawn at any time. It was paid quarterly and not monthly. The employer was, therefore, not required to pay contribution to the ESIC on this expenditure, they said. When asked, pointedly, how the employees were made to understand that they would be paid Attendance Bonus if they had attended factory on all the 26 days, the representatives said that the management had put up a notice in the canteen to that effect, wherein it had also been mentioned that it was unilateral, that it could be withdrawn at any time and that it would be paid once in a quarter.

Final orders were issued under Sec. 45-A, after the hearing was over, determining the contribution payable. Employer’s contentions were recorded and reasons given.

It was explained in the order issued under Sec. 45-A that

  • the very fact that the employer had displayed a notice in the canteen proved that the Attendance Bonus had been paid as per specific terms of contract.
  • there was an express contract, and that it was not unilateral, because there had been clear communication of mind, the consensus ad idem, and the ingredients of offer and acceptance were there.
  • the amount was ‘payable’ every month but was postponed and paid once in three months.
  • the amount being ‘payable’ every month, this case fell within the first portion of the definition of the term wages and not within the third portion of it.

Contribution was, therefore, claimed on the entire amount. After a few months, the employer’s representative who came to the Regional Office for some other purpose, said that the CEO had ordered the issue to be challenged in the court of law.

When asked how the CEO expected to win the case, the representative said that the CEO referred the matter to court, because he was paying a standing counsel every month without getting any work done by him. He therefore, wanted to give some work to the standing counsel. The employer paid the dues later with further interest, after the court verdict.

What are those different parts of the definition of the term ‘wages’? Wages Page 1 Another major employer did not pay contribution on Conveyance Allowance. When the ESIC asked for contribution, the employer went to court, where his stand was upheld. The judge had reasoned that the ESIC would not have claimed contribution if the employer had given season-tickets to his employees or reimbursed the expenditure. As the employees actually incurred expenditure on conveyance, it was not wages, the Court reasoned.

But, the fact was that it was not a case of reimbursement. The payment was not in kind. It was an amount paid in cash. The court had traversed the extra mile arguing that the ESIC would not have demanded contribution, if the employer had reimbursed it or had given season tickets. The court had overlooked the fact that the employer had, actually, paid in cash. This fact on record had been ignored by the court. The argument could also be that the employer could have given to his employees grocery, cloth and other domestic requirements too and then paid less contribution only on the remaining carry home pay.

What happened in this case was that our counsel had failed to bring it to the knowledge of the court the first part of the definition of the term ‘wages’ which refers to the payment in ‘cash’. When an amount is paid in cash, the liability to pay contribution arises automatically, unless exempted under the fourth part of the definition of the term ‘wages’. Because, there is no system to ensure that the employee spends a particular allowance only for that purpose.

The Act, therefore, does not lay stress on the nomenclature used by the employers to pay remuneration to his employees. ESIC is not obliged to give cognizance to the terminology used by the employer in this regard. Wages Page 2 ESIC officers would see only whether the payment fell within the parameters specified in the definition. Many such attempts at evasion to pay contribution had been resisted successfully, only because of the great definition of the term ‘wages’ under Sec. 2 (22). Otherwise, the contribution would have been very less resulting in meager amount of cash benefits to the working population, making it difficult for them to sustain themselves during the period of sickness and disability.

The term ‘wages’ had, thus, been defined in a very thoughtful and foresightful manner in the year 1948. It has withstood numerous onslaughts from various minds with fertile imagination.

Compare this with the contents of Sec. 45 AA which had been drafted very loosely and rushed through as an Amendment in the year 2010 making one wonder whether law-making process in the nation had become so ineffective and inefficient in the nation.

It is time the ESIC turned a new leaf and sent its young officers for training on Legislative Drafting conducted by the ILDR of the Ministry of Law & Justice, to prevent recurrence of such anomalous situations. Legislative drafting NB: The Note in Pdf is available in the following link:

Training Note Wages

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

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


Robert Owen, 1.1.1816 when he opened the

Institute for the Formation of Character.


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

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

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

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

Politicians and Bureaucrats nexus

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

Private players are welcome even now

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

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

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

Corruption of private players in Life Insurance Sector

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

Our experience with private corporate service providers

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

Private Bus transports

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

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

Private telecom service providers

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

RTI only for BSNL and not for other private players

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

Private Hospitals vis-a-vis Leprosy and TB

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

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

Social Security and the USA

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

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


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

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

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

 Corruption is the main problem in India

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

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

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

Non provision of Primary Care is a real threat

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

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

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

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

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

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

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

(d) a National Health Drive.

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

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


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


Paul Krugman

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




Filed under Amendments 2010, Benefits

Making ESI Medical facilities optional: Abdication of responsibility!


It is said that the Government of India is going to make the ESI Medical facilities optional. It is also said that the employees would be given option to choose medical insurance of private operators.

First of all, ESIC does not provide medical facilities only. Medical Benefit is just one of the five major benefits provided by the Government of India to the working population through the ESIC. The other four are cash benefits provided in the contingencies of sickness, maternity, disablement and in the event of fatal accidents. No private player can ever match the benefits provided by the Government through the ESIC. It is not necessary for one to cudgel one’s brains to go through the monumental document of Sir William Beveridge, and the passionate report of the compassionate Prof. Adharkar to understand how and why it must be the duty of the Government of India to provide these benefits to the working population.

Even The Hindu conceded editorially on 01.01.2005 that “The package (of benefits provided by the ESIC) can rarely be matched by private employers on their own because of the heavy costs involved – not to mention the disinclination among employers, with honorable exceptions, to operate health care systems for their workforce”

It is the Government, which runs the ESIC. As far as the medical benefit is concerned, the Government can run the hospitals and dispensaries very well. It can control corruption, if it wants to. But, the political parties that came to power successively were not interested in proper running of the administration. They wanted to have the power of transfer of the officers of the ESIC, for mala fide reasons. The financial strength of the organisation, appreciated by the Economic Times in 2003 was weakened deliberately and more than Rs. 15000 crores of ESIC funds frittered away for questionable purposes.

ESI Scheme is the backbone of the nation’s economy. Just like the backbone, it remains invisible. So, the sensation seeking media – even major media – did not care what was going on in the ESIC when so many things went awry.

BJP is definitely leading the country in the wrong direction. We have to learn from USA and Cuba about the provision of medical benefits to the people of the nation. US is a warning and Cuba is  an example. Poor in USA go to Cuba for treatment. (Of course, not only those employed in factories but others as well).

Whatever be the ‘ism’s they are calling, nothing could succeed in India or any nation, for that purpose, unless corruption is controlled. And, corruption can, really, be controlled.

Making the source of finance for every political party transparent is the first step to eradicate corruption. Unless BJP comes forward to enact appropriate law for this purpose, they cannot make the people believe they are the saviours of the people. Because, as things stand, the political parties collect money from corporates and the people in that party share that money among themselves. Funny, these people quote scriptures in public, to the public.


When Tony Blair laid down office as the Prime Minister of the UK, his personal worry was how to settle his personal loans. In India, no councillor of Municipality would remain a debtor after a single tenure in office as councillor. What to talk of Ministers who are fond of aristocratic life style!

ESI medical benefits are supposed to be really qualitative. The pharmacopeia is of WHO standards. Still, it is the unwillingness and greed of the politicians in power and the corrupt motive of the officials, which prevent the ESI medical institutions from reaching greater heights.

Mediclaim policies of private institutions are not the panacea for it. There are many other practical problems posed by the latest decision of the Government, which wants to abdicate its responsibility on this score. They will be dealt with later, in public interest.

An article underscoring the importance of this social security scheme is uploaded in the following link, for those who would like to know the history behind the scheme.

Click  for Articles here.

Sickness Benefit?

Now, more than anything else:

Who will provide Sickness Benefit? And, on whose certificate? Has the BJP chosen to away with the Sickness Benefit altogether? Has it examined the issues involved in it? Pity indeed!

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Filed under Amendments 2010, Benefits

Keep alive the Employers’ Liability Act, 1938!

Employers Liability Act, 1938 has been legislated with the objective of ruling out certain defences in suits for damages arising out of injuries sustained by workmen. Under the Common law, in case of civil suits for damages resulting from injuries sustained by workmen the employer can plead the Doctrine of Common Employment, by which the employer is not normally liable to pay damages to a workman for an injury resulting from the default of another workman and the Doctrine of Assumed Risk, by which an employee is presumed to have accepted a risk if it is such that he ought to have known it to be part of the risks of his occupation.

The Royal Commission on Labour viewed both these doctrines as inequitable and recommended with a majority that a law should be enacted to abolish these defences in case of all workmen.

Employers’ Liability Act, 1938 says clearly who the employer is in respect of the workers deputed by the contractors and man-power supply agencies to work in the factories and establishments of other employers. The definition in this Act helps understanding the definition of the term ‘Workman’ in the Workman’s Compensation Act, 1923 (now Employee’s Compensation Act, 1923), the definition of the terms like ‘employee’, ‘principal employer’ and ‘immediate employer’ in the ESI Act, 1998, the definition of the terms ‘workman’, ‘contract labour’ and ‘contractor’ in the Contract Labour (Regulation & Abolition) Act, 1970. This Employers’ Liability Act, 1938 would help bridge many gaps that may arise between various other labour welfare enactments. This Act is resorted to for clarification and protection, when there is flaw or doubt in other enactments. This is a protective umbrella for workmen and had been enacted after due deliberations. This has withstood the test of time.

The utitlity of the Employer’s Liability Act, 1938 and the way it helps understanding the subject matter pertaining to the employees employed through contractors including the outsourcing agencies can be seen from the exhaustive Powerpoint Presentation (containing 206 slides) available in the article given in the following link:

The Powerpoint presentation explains how this Act supplements and aids interpretation when doubts are raised by the employers in regard to their liability towards the workmen engaged through contractors or in respect of employees whose services are utilised through outsourcing methods.   The history behind this Act and its contents are very useful to explain the concept of contract labour in various seminars of employers, with the help of this Act.

Employers’ Liability Act defines and restricts the occasions and the extent to which public and private employers shall be liable in compensation in case of injuries to their employees occurring in the course of their employment and particularly abolishing the common law rule that the employer is not liable if the injury is caused by the fault or negligence of a fellow servant and also the defences of contributory negligence and assumption of risk.

There is no harm in retaining the Statute as a live enactment, especially when the legislators of these days had shown no interest in proper discussion and understanding the intricacies of amendments proposed by bureaucrats. (Ex. the amendments proposed in 2009 to the ESI Act, 1948 contained so many serious flaws that affect the functioning of the organization till date). It is therefore proper to retain the Employer’s Liability Act, 1938 in the Statutes without repealing it.

  1. Definitions:-

 In this Act, unless there is anything repugnant in the subject or context,–      (a) “workman” means any person who has entered into, or works under a contract of, service or apprenticeship with an employer whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, oral or in writing; and       (b) “employer” includes any  body of persons whether incorporated or not, any managing agent of an employer, and the legal representatives of a deceased employer, and, where the services of a workman are temporarily rent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him.

The definition in this Act helps fix tortious liability on the employers not covered by any other enactment,too. Retaining it on the statute books will not be harmful to anyone.

Repealing it can be harmful to the working population in various contingencies. The text of the Employers’ Liability Act, 1938 is available at:

and also at

(although it is written as Employees Liability Act, 1938 there).

Those who agree with this proposition may convey their views to

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Filed under Amendments 2010, For Trainees

ESI Corporation under attack!

ESI Corporation is the backbone of the nation’s economy. The importance of the organization would become known to the ‘ill-informed’  and  the ‘innocents’ only when the organization ceases to exist. The economic miracle of 1945-71 of the West Germany became possible only because of the well-run social security system there.

But, the already-ailing ESIC in India, is under attack from the media, the self-styled ‘national’ media, now, for various commissions and omissions including the impact of having opened many medical colleges. But, these ‘traders in news’ simply forget the fact that it was they who did not care to publish even letters to editors when three retired officers had written to them about those issues in the year 2009 and 2010 itself. If these ‘traders’ had had real devotion to their profession, they would have applied their mind to the issues that had been brought before them and that exposure would have prevented the passage of the Bill bringing in amendments to the Act in the year 2010, by the MPs who did not care to discuss the issues in the floor of the house, in spite of the fact that those retired officers had taken the issues to their knowledge both in person and through email provided in the website of the two houses of Parliament. So much for the depth of knowledge and commitment of these ‘national traders in news’.

But, even while such exposure is being made in the media, the ESIC is under attack from various other quarters also as given below, making it difficult for the honest administrators to set things right even at that this late stage:

  • the corrupt officials who just want to loot and share among themselves the ESIC funds,
  • the association leaders, working overtime, to play power-politics in the postings of officers (by roping in the politicians in power) to bring in pliable officers, at appropriate places, to suit their myopic personal agenda,
  • the indifferent officials who just do their work with honesty and sincerity but do not want to have macro-knowledge about the purpose of their work, the goal of the organization and the goings on in the organisation,
  • the dishonest employers who do not want proper and periodical inspections to ensure correct compliance and payment of the dues legally payable but are conniving to shift the burden to the ESIC with retrospective effect when accidents take place in their factories and
  • the middlemen called ‘Consultants’ who play a major role by assisting such employers, etc.,
  • the inert statutory organisations, like the Central Vigilance Commission and the Office of the CAG which do not want to have proper probe into the issues.
  • the indifferent peoples’ representatives who are in large numbers, who do not feel any ownership to the  nation and do not spare time to understand the impact of the issues.

ESIC can provide medical and cash benefits properly only when its funds are managed in a professional way. ESIC funds can be generated only through proper monitoring mechanism by conducting proper inspection of all the covered and coverable units regularly. Its inspection machinery must be trained on core issues to detect concealment in coverage. The Inspectors (SSOs) and Officers must be equipped with more knowledge than the most knowledgeable but corrupt Consultants, about the  intricacies of the provisions on Revenue. The ESIC must curb corruption and provide quality treatment in the ESIC medical institutions by adopting the caring the manner in which it was done earlier. Otherwise, the ESIC might be in the red, as predicted by its Finance wing.

Endless enhancement of limit for coverage cannot be the solution.

In the circumstances, the only consolation is that there are honest authorities of the ESI Corporation who are really concerned about the issues and are struggling every day to find ways to save the organization by resisting and circumventing the pressures given by these unscrupulous elements.

Should the public remain unconcerned?

Before narrating certain issues with evidence, two articles explaining the importance of the ESI Corporation are published here for information and basic understanding of the importance of the ESIC in the Indian social and economic life.

Please Click on Articles

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Filed under Amendments 2010, Inspections, Transfers

ESIC Meeting Minutes: Letter to the Hon’ble Prime Minister!

The last sentence in the post titled “ ESI Corporation Meeting on 19.09.2013” published on 25.09.2013 ( read:

“At present, we only hope that the Minutes approved by the Chairman of the ESI Corporation would faithfully record the complete discussion that had, actually, taken place on 19.09.2013 on all subjects.”

But, our worst fears on this issue have come true. The Minutes have been modified by the Hon’ble Minister as he pleased. He had made the entire body of members of the ESI Corporation a mockery. What can we do now? We can only write to the Hon’ble Prime Minister. We have, therefore, written. The following is the text:


The Prime Minister,

Government of India,


New Delhi

E.S.I. Corporation – Meeting of the Corporation on 19.09.2013 – Minutes – tampered and doctored by the Minister for Labour – intercession – requested.


I have to state that the meeting of the Apex Body of the ESI Corporation was held on 19.09.2013. Among the points on the Agenda were the ones conferring powers on the Hon’ble Minister for Labour and Employment to act as the Appointing Authority and Disciplinary Authority of the officers of the ESI Corporation.

This was opposed to by the Members of the body, as it was unnecessary and no justifiable reason was given in the Agenda for the change proposed. It was, therefore, decided to refer the matter to a Sub-Committee to examine the issue in-depth. The tape-recorded version of the discussion during the Meeting would testify to these facts.

That was a correct decision of the body, especially when the Agenda had been introduced under dubious circumstances by the Hon’ble Minister in his capacity as the Chairman of the ESI Corporation.

It is a fact that he was showing extraordinary interest in acquiring the powers of transfer of the officers of the ESI Corporation right from the day he assumed charge as Minister for Labour. This power, when conferred upon the Minister, will give him real authority without any responsibility.

Earlier, Hon’ble Mr. Sahib Singh Verma was also exhibiting such irrepressible desire to acquire the power of transferring the officers of the ESI Corporation. Documentary evidences are available in the Ministry itself in this regard. The organization was saved, fortunately, because his party lost  the elections in the year 2004.

Hon’ble Mr. Sis Ram Ola has not only been exhibiting similar uncontainable desire on this issue but has also gone to the extent of writing the Minutes as he pleased. He has, thus, rendered the entire body of the ESI Corporation redundant. His action is unlawful and gives new dimension to the way we understand democracy in India. I request you to kindly intercede, immediately, and set right matters before it spills over as a major issue spoiling the image of your government during the coming elections in 2014.

Yours faithfully,


Filed under Amendments 2010, For Trainees, Transfers