Tag Archives: ESI Corporation

Innocent MPs Vs. Wily Bureaucrats – Episode 2

1. Hon’ble Speaker,
House of the People (Lok Sabha),
17, Parliament House,
New Delhi 110011

2. Mr. Bhartruhan Mahtab,
Hon’ble M.P. & Chairman,
Standing Committee of Parliament on Labour,
South Block,
New Delhi – 110011

(Through Mr. Kulvinder Singh, Deputy Secretary, Parliament of India,
House of the People. Email: comm.labour-lss@sansad.nic.in)

Sub: Appointment of Consultants and Specialists in ESI Corporation – – insertion of Second Proviso to Clause 24 (7) (a) of the Bill No. 375 of 2019 – legislative process – bureaucrats continue to cheat the Parliament – representation – submitted.

Ref: 1. Bill No. 66-C of 2009 placed before the Lower House of the Parliament as The ESI (Amendment) Bill, 2009 on 30.07.2009.
2. Report dated 09.12.2009 of the Parliamentary Standing Committee on Labour.
3. Record (Minutes) of the proceedings of the Lok Sabha on 03.05.2010.
4. Bill No. 66-C of 2009 as passed by the House of the People on 03.05.2010 titled The ESI (Amendment) Bill, 2010.
5. CAG Report No. 40 of 2015 on Special Audit of Medical Education Projects in the ESI Corporation.
6. Draft Code on Social Security circulated in the MOL&E Circular No. Z-13025/13/2015-LRC dated 17.09.2019.
7. The Code on Social Security, 2019, placed as Bill No. 375 of 2019 before the House of the People (Lok Sabha).


1. I submit this representation to the Parliamentary Standing Committee on Labour (hereinafter referred to as the PSCL) with a request to kindly examine in depth the Second Proviso to Clause No. 24 (7) (a) of the Bill on The Code on Social Security, 2019 (Bill No. 375 of 2019 of the Lok Sabha) which has been worded in a nebulous and ambiguous manner.

2. This Clause is shown to have been included for the purpose of appointing Specialists and Consultants in the ESIC Hospitals for better delivery of Super Speciality Services. But this clause which is the exact reproduction of the Second Proviso to the Sec. 17 (2) (a) of the ESI Act, 1948 did not serve that purpose. In fact the Second Proviso to the Sec. 17 (2) (a) of the ESI Act, 1948, was inserted in the ESI Act, ten years ago, with ulterior motive, through an amendment vide Bill No. 66-C of 2009 of the Lok Sabha, and it had been the cause of various scandals unearthed later by the Comptroller and Auditor General of India and some of them recorded in Para 2.3, Para 2.4 and Para 2.5 of his Report No. 40 of 2015 (Page 8 to 12 – Special Audit of Medical Education Projects).

3. I submit that such scandals became possible because of (a) the insertion of that provision as Second Proviso to Sec. 17 (2) (a) of the ESI Act, 1948, instead of its appropriate place as the Second Proviso to Sec. 17 (3) of the said Act and (b) the absence of insertion of definition to the terms ‘Specialists’ and ‘Consultants’ in the ESI Act along with the aforesaid amendment.

4. I therefore submit that the present Cl. 24 (7) (a) of the Bill No. 375 of 2019, as it is at present, would definitely become the cause of further abuse as had happened in the past decade in the ESI Corporation, unless the PSCL inquires the authorities of the facts behind it and causes modification of it. What is required to be done is to insert this Clause in its appropriate place below the Cl. 24 (8) of the Bil No. 375 of 2019 and to incorporate, in the Bill itself, the definitions for the terms ‘Specialists’ and ‘Consultants’. I, therefore, request that the Committee may kindly bestow more attention for evaluating this provision, in the light of facts submitted in this representation and the Appendices.

5. The Second Proviso to the Clause No. 24 (7) (a) of the Bill No. 375 of 2019 which is, now, under the scrutiny of the PSCL at present reads as under:

“Provided further that this sub-section shall not apply to appointment of consultants and specialists in various fields appointed on contract basis.”

6. The second proviso to the Clause 5 of the Bill No. 66-C of 2009, introduced ten years ago to make amendment to Sec. 17 (2) (a) of the ESI Act,1948, which was scrutinized by the then PSCL, read as under:

“Provided further that this sub-section shall not apply to appointment of consultants and specialists in various fields appointed on contract basis.”

7. The PSCL had examined this provision in depth then and did not approve it the way it approved many of the other genuine provisions in the Bill No. 66-C of 2009. Yet the procedure had been manipulated, the observations of the PSCL overlooked and the defective Clause 5 of the Bill became law on 03.05.2010 enabling the persons in power to indulge in various scandals.

8. I submit that this Clause, which had been inserted in through the Bill No. 66-C of 2009, was not an innocuous provision. It was inserted in a pre-meditated manner with a view to indulge in various scandals. Instead of placing it as the second proviso to Sec. 17 (3) of the ESI Act, the bureaucrats connived to insert it as the second proviso to Sec. 17 (2) (a) of the ESI Act. (Please see Appendix B). Their apparent intention was (i) to appoint anyone as Specialist or Consultant for any non-medical purpose, (ii) to ignore the proper method of recruitment, (iii) to pay such an appointee extraordinary remuneration without any guideline being anywhere and (iv) to keep those appointees beyond the pale of all kinds of disciplinary provisions. I request that this provision need not again be made a part of law through the proposed Code on Social Security, 2019 vide the Bill No. 375 of 2019 which is now under the effective consideration of the PSCL.

Appendix B

9. It is essential for the PSCL to know the fact that when the Secretary, Department of Economic Affairs, suspected the bona fides of the provision in the Bill No. 66-C of 2019 and came forward with valid suggestion during the meeting of the Committee of Secretaries held on 06.01.2009 to prevent the abuse of this provision, the Director General, ESI Corporation chipped in and clarified that it was only an enabling provision and that the rules would be framed later. His defence was endorsed by the Cabinet Secretary who was present in the meeting and observed that the issue might be examined “at the time of framing of rules.” But it is a pity that the promises of the Director General of the ESI Corporation and the Cabinet Secretary were not kept. Consequently, no rules under the provisions of Subordinate Legislation have ever been framed regarding the appointment of Specialists and Consultants till date, although many had been appointed through questionable means in the organization leading to the objection by the CAG too.

10. I, therefore, request that the Parliamentary Standing Committee on Labour may be pleased

a. to dispense with this provision altogether and direct the ESI Corporation to follow the procedure adopted in the AIIMS, JIPMER, etc., for appointment of Specialists and Consultants in medical fields, or

b. to advise the authorities concerned to formulate the provision properly to enable them to appoint only the Specialists and Consultants with medical qualifications to meet the requirement of the ESI Corporation in providing super speciality medical benefit to the ailing beneficiaries in the ESIC run medical institutions;

c. to advise the authorities to incorporate suitable definition for the terms ‘Specialists’ and ‘Consultants’ under Clause 2 of the Bill under consideration; and

d. to shift this impugned proviso from the present position as the Second Proviso to Clause 24 (7) (a) of the Bill on the Code on Social Security, 2019 ( Bill No. 375 of 2019) and to insert the same as the Second Proviso to Clause 24 (8) of the said Bill to prevent abuse of the provision once again by making extraordinary payments to the people who are appointed as Specialists and Consultants. (Please see Appendix C)

11. I submit herewith a Write-up containing the relevant details pertaining to the abuse of law-making-process in the year 2009 and 2010 to insert the Second Proviso under Sec. 17 (2) (a) of the ESI Act. I believe that the PSCL may find the precedent and the details thereof useful to arrive at a decision, as deemed fit, on the unwarranted Proviso which has been inserted as Clause No. 24 (7) (a) of the Bill,

Yours faithfully,

Encl: Appendices A, B & C.

Appendix C


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Filed under Labour Code 2020

Moving the Court of Law; Inviting ideas and opinions from the public !

Democracy means having the right to say what one wants and leaving the decision to others*. But, what one says must be right and true. This website makes every attempt to present the ‘right’s and the ‘truths’. And, this website never claims that what it presents alone is right. It is for the reader to discern what is right and what is wrong, as the website is open for different viewpoints and has hosted articles received by it with contrary views.

This website reiterates that it serves only as a forum to bring out the opinion of the public so that the authorities are able to traverse beyond their immediate circle and take informed decisions. The website would also enable the Ministers and Prime Minister to realize the seriousness of their mistake in forcing the bureaucrats to put up convenient notes to justify the pro-rich decision already taken by them, ignoring the pain that would be inflicted on the society by such improper political decision.

 Wrong decisions by Elected Bodies

 Now that the ESI Corporation, as a body, has realised, in its 163rd meeting, that running the medical colleges is not its core activity (and that too, after the amendment of 2010 which made the medical colleges, part of the ESIC) the issue becomes how and why the same ESI Corporation, as a body, considered, in the years 2008 and 2009, that running the medical college was essential for it, “to improve the quality of services provided under the ESI Scheme” and permitted spending the surplus funds running into more than Rs. 9000 crores, in a tearing hurry, and hundreds of crores were sanctioned first and placed later for approval ex-post facto by the Standing Committee, for construction of medical college buildings, even before the formal amendment was made to the ESI Act to empower the ESIC to “establish” medical colleges.

The fact, therefore, is that the ESIC, as a body, took a wrong decision either before the amendment or, now, after the amendment. The indisputable fact is that the ESIC, as a body, has demonstrated that it could and would take wrong decisions.

 Failure of Members to play their legitimate role

 But, the concept of having a multi-faceted body for decision-making is that there should, normally, be informed discussions in the meetings so that there would be no scope for such patently wrong decisions. But that was not to be in the case of ESIC when it came to spending thousands of crores of rupees for construction of buildings for medical colleges, even before the enactment of law. The ESI Corporation, is a Body in which there are, among others,

  • 10 employers’ representatives,
  • 10 employees’ representatives,
  • 3 MPs, and
  • 25 IAS Officers representing various State Governments.

Yet, such wrong decision had been taken in the ESIC meetings, only because of the failure of the employers’ representatives and employees’ representatives (except Mr. Kali Ghose) to examine the proposal with the seriousness it deserved. The representatives of the State Governments used to remain silent spectators in almost all the ESIC meetings, except when the issue involved their States. But, their presence had always lent credibility to the claim of their consent to the decision in the Body by showing them as part of the affirming majority. In essence, majority of the members of the ESIC did not show active interest, in the years 2008 and 2009, in examining the proposal tabled for their consideration, for insertion of Sec. 59-B. Hence the present predicament.

 Failure of the media to prevent the catastrophe

 Yet, even in those years of origin of the present problem, there had been some activists who had been working hard to prevent the catastrophe and to enlighten the MPs about such a wrong decision and the unlawful action in spending crores of rupees for construction of buildings for medical colleges, even before the Parliament amended the Act. But, the MPs did not care. Those activists wrote to various newspapers too, including the “National”ones. But, no editor cared. The Parliamentary Standing Committee was cheated. And, in the last leg, the Parliamentarians chose to be busy with creating pandemonium over Mr. Sibu Soren issue while Mr. Mallikarjun Kharge could present the amendment, amidst interruptions and interruptions, and get it through. The result was a puzzling proposal for amendment became law with an ‘amazing’ and improper Validation Clause. That was how the ESI Corporation, as a Body, the Parliamentary Standing Committee, as a Body, and the House of the People, as a Body, had erred and failed to live up to the purpose for which they were there. They had failed to analyse the present and foresee even the easily foreseeable future.

 Atlas is looking for another shoulder

 And, the burden of that error and failure, has been passed on by the earlier Administration to the shoulders of the present Administration, which is searching desperately for other shoulders to shift its burden. Atlas who got the burden of the globe shifted to his shoulders is still trying to find someone else to shift it off. The issue now is whether Atlas can continue to shoulder the burden or should shift it to someone else or whether he can make use of it, in any other manner, without shouldering it as a burden.Atlas 4 The decision in the 163rd meeting of the ESI Corporation that running the medical colleges is not its core activity is right. But, handing over the buildings to the State Governments or private players does not appear to be right. The members of the ESIC do not seem to have discussed the issue in-depth. They appear to have remained silent and endorsed the already made up bureaucratic stand on the issue. It is a clear failure of the present ESI Corporation, as a body. Its decision to shift the burden to the State Governments or to the private players do not seem to be correct and right. But, what are the other options open for the ESIC to make the best out of the present quandary? Are there ways to come out of the quagmire?

Of course, people come up with a variety of ideas. Some may be right. Some may be wrong. Some may be legal. Some may be unlawful. It is felt appropriate to examine all the options in an open forum so that the best comes out of it to facilitate the Administrators to consider those options.

 Thankfully, many are public-spirited

 Some well-intentioned activists believe in taking up the issue to the Court of Law. The relevant questions on the issue are, therefore, brought to the attention of the public, seeking their opinions on them. The questions and the replies given by the public would be presented before the judiciary as a document in the Typeset when the Writ is filed.

Every single citizen has a say in the matter and a stake in the well-being of the ESIC, as an organisation meant to take care of complex life problems. The website, therefore, invites readers to record their viewpoints on the crucial issues so that the best solution emerges out of such brainstorming event for the common good.

“I am only one; I cannot do everything.

Still, I am one; I can do something.

Because I cannot do everything,

I will not desist from doing something that I can do”,

-Helen Keller.


The first case to be filed in the Court will focus on the manner in which the ESIC proposes to utilise the buildings which are constructed for running medical colleges. Hon’ble Minister for Labour has made the stand of the Government public in the Press Release dated 23.03.2015. That Press Release will be the impugned document.

 Press Release 23. 03.2015

 The Press Release dated 23.03.2015 says that the ESI Corporation is going to hand over 8 medical colleges, at Faridabad, Sanatnagar, Coimbatore, Gulbarga, Mandi, Alwar, Paripally and Bihta to State Governments as per its revised terms and conditions. It has been mentioned that if the State Governments do not come forward to send any reply within 15 days, it would be presumed by the ESI Corporation that they were not interested in taking over those projects and, thereafter, efforts would be made to run these medical colleges under PPP model etc.,

It has also been specified therein that “the core function of the ESIC is to provide social security i.e., cash benefit and medical benefit to the Insured Persons under the ESI Scheme. It was felt it would help the ESIC in concentrating at its core function if the ESIC exited from the field of Medical Education”.

 White elephants, so many!

 It is apparent from the said Press Release that the present ESI Administration finds it difficult to run the Medical Colleges and does not know how to get rid of so many white elephants. It says it is trying to hand over the “Medical Colleges” to the State Governments, on its own terms and conditions.

The Ministry of Labour is also ready ( Or, eager?) to hand over those “Medical Colleges” to private players, as could be seen from the Press Release dated 23.03.2015. It uses the term ‘PPP model’. It also uses, significantly, the word “etc” to indicate that it does have more options too.

The Press Release gives raise to various questions, some of which are enumerated below:

  1. Where is the provision in Sec. 59-B to empower the ESIC to run the “medical colleges” through private players or even through State Governments? Such third party participation is permitted by Sec. 59 (3) only to run the ESI Hospitals and not Medical Colleges. How can the ESIC mix up Sec. 59(3) with Sec. 59 (B)?
  2. Besides, the basic issue is, where is the continued need for the ESIC to run medical colleges and also to seek PPP for that purpose, when it has found out that it is not its core activity, at least, now?
  3. When the Administration has admitted that the buildings of 8 more medical colleges are only “under construction”, why should it not forget about medical colleges but use the infrastructure created, for some other purposes, in such a manner that it generates permanent rental income to the ESIC to add to the ESI Fund, to offset the money lost during the last six years?
  4. Is it obligatory for the ESIC to run those medical colleges through proxies, either through the State Government or through PPP or through other methods (as implied from the world ‘etc’), just because buildings have been constructed or just because the MCI is going to give permission to it?
  5. When the Private Players are allowed to run the medical colleges, will they be running it as per their own licence or by using the licence obtained by the ESIC from the Medical Council of India?
  6. If the ESIC is using the licence obtained by it for running the medical colleges and allowing that licence to be used by the private players, will it be legal, when the ESIC has gone on record saying repeatedly that running the medical colleges is not its core activity?
  7. Would those private players be able to get permission from the Medical Council of India to run medical colleges on their own? Are these private players permitted to be the beneficiaries of the misadventure and discomfiture of the ESIC in having illegally started construction of buildings spending thousands of crores of rupees from the year 2008?
  8. How is it that some private players like Reliance, SRM and others are reported to have already entered the premises of various (proposed) medical colleges at Coimbatore, Joka and other places, officially and inspected the infrastructure under construction?
  9. Is it true that those private players would admit students under Management Quota to make money, using the licence granted to the ESIC for starting medical colleges?
  10. What is the significance of giving only 15 days’ time to the State Governments to accept the Terms and Conditions framed by the ESIC before and for inviting the private players to have a role in running the medical colleges on behalf of the ESI Corporation?

Helen Keller, all

Everyone is, can be and has to be a Helen Keller. Everyone’s ideas count. Actions of individuals count. During the early 1940s there had been many social activists, impartial scientific authorities, in England who had conducted many social surveys of the conditions of life of the people in principal towns in Britain including London, Liverpool, Sheffield, Plymouth, Southampton, York and Bristol.

Helen Keller

Helen Keller

That alerted Winston Churchill to entrust the work of formal study of the issues of Social Security to Sir William Beveridge. The website, therefore, invites all the readers to come up with their ideas and opinions on the issues affecting the working population.

If emerging facts prove what the PMO, Ministry of Labour and the ESIC are going really in right direction in public interest, it will not be necessary to move the court of law on this score. Otherwise, we will have to seek the intersession of the Judiciary to save the nation from the organised attempts of the rich businessmen and pro-rich-politicians to dismantle the finest Social Security of the nation.

(*with due apologies to H.D.Thoreau).


Filed under Medical College Bond