Tag Archives: Medical College

The fine art of squeezing out the ESI Fund Account No. 1.


The ESI Corporation Minutes dated 17.07.2007 shows that the decision to open medical colleges had been taken in that meeting, in spite of the fact that there was no formal agenda on that subject and no discussion on that subject. The Sub-Committee that was constituted, later, in 2008 to formulate proposal for amendments on various issues, recommended setting up medical colleges on the condition that the “doctors and paramedical staff would be required to render such minimum service in ESI hospitals / dispensaries / institutions as may be decided by the Corporation”.

ESI Medical Bond


The Insured Persons whose money was to be spent for this purpose and the Parliamentarians who approved the amendment to insert Sec. 59-B had been given the impression that there was something for the Insured Persons in return for the money collected from them (whether it was proportionate or not is beside the matter).

As the intention was only to fritter away and misappropriate the surplus funds, the authorities did not wait for the essential procedure of formal amendment to the ESI Act, which actually came in the form of Sec. 59 B of the Act only in May 2010 effective from June 2010. They initiated the construction work for so many medical institutions throughout the nation, in a tearing hurry, in the year 2008 itself, and spent about Rs. 10000 crores even before the Act was amended. They did not exhibit ordinary prudence and caution by having a proper and objective in-depth study of the pros and cons of starting medical institutions by the ESI Corporation. They did not even try with a few pilot projects. They started constructing buildings, at one go, for large number of medical colleges including nursing colleges and colleges for para medical staff.

There was never any felt need for the ESIC to start medical colleges to recruit the MBBS-qualified doctors let alone nurses and para-medical staff to run their dispensaries and hospitals. The ESI Corporation had always been getting overwhelming response to its advertisements to recruit MBBS-qualified doctors, BDS qualified doctors, nurses and other para-medical staff. For instance, there had been 3000 applicants when the recruitment process was for 300 vacancies of MBBS-qualifed doctors. Yet, the authorities started constructing about 23 buildings throughout the nation and all of them have now become white elephants. Now, in the year 2014, their own Sub-Committee on Medical Services & Medical Education said that running the medical colleges would result in the budget becoming negative in the year 2016-17.

Hon’ble Minister for Labour Mr. Narendra Singh Tomar has said that “the decision to open medical colleges by the ESIC was a big mistake”.  

Calling the ESIC board’s decision to open medical colleges in 2008-09 a “big mistake”, labour and employment minister Narendra Singh Tomar said he will review the scheme.“The decision to open medical colleges by ESIC was a huge mistake and we will rectify it,” Tomar told reporters after a meeting of the ESIC board comprising representatives of workers, industry and government.

The Financial Commissioner said that the ESIC did not have the core competency:

“Medical education is not our core competency, and we would prefer to focus on our primary job—providing medical care services to industrial workers,” said S.K. Rahate, finance commissioner, ESIC. “We have learnt from experience over the last five years.”

Live Mint reported:

“These are high cost projects causing a significant outflow of funds on both capital as well as revenue accounts. This will in near future cause the ESIC expenditure to be more than its revenue income,” said an internal note based on an ESIC sub-committee report. Mint has seen a copy of the note.”

That Note, the Report of the Sub-Committee  on Medical Services & Medical Eduction submitted in May 2014 discussed at length about the system of Bond that had to be obtained from the students who were given subsidised education from the ESI Funds. In Para XIII (6) in Page 51 of the Report, the Sub-Committee had observed that the ESIC could not subsidise the medical education, when the Bond was not for recovering the full recurring cost. The said para read as under:

“If full recurring cost is to be recovered from UG/PG students, it would require charging very high fees; or, the corresponding Bond amount would need to be very high. If the fees/Bond amount is to be reduced, it would require subsidy for medical education from the ESIC. This may be violative of the spirit of the ESI Act.”

Page 31 of subcommittee report on ME

In Para XIII (5) (e) of the Report, the Sub-Committee had said, “That there was no system of bond enforcement and without an effective enforcement of bonds, the availability of doctors to the Corporation would not be assured.”


Now, all of a sudden, the insured persons are informed that the so-called precautions taken by them, as narrated above, can be and have been thrown to wind. 

This announcement is made even before the first batch of undergraduate students is out and on the verge of their being out, by the summer of 2016. The ESIC does not say that there is no vacancy to accommodate the newcomers. The ESIC says that obtaining such bonds would be considered as anti-people move.

“Since ESIC has spent thousands of crores on medical colleges, it is unfair for students who get subsidized education and then join the private sector, a labour ministry official said. “So, the Rs.25 lakh bond plan was mooted, but in the current political environment, such a move has been put on the back-burner,” the official said, requesting anonymity.”  (http://www.livemint.com/Politics/yJigrCBGE3RY3oBhGp7A2H/Govt-scraps-planned-Rs25-lakh-bond-for-ESIC-medical-students.html)

This is not a correct decision. The reason publicly proclaimed does not appear to be the right one. The money of the Insured Persons cannot be frittered away by the politicians and bureaucrats thus.

Politicians and Officials


Such an awakening that the enforcement of Bond would be seen as an anti-people move did not come in 2007 or 2008, before venturing into the area of medical education. Besides, such Bond system is in vogue as per the CCS (Leave) Rules, 1972,  governing the sanction of even the Study Leave. Nobody has termed it as an anti-people move, during the past 43 years.

In the circumstances, some Insured Persons are already taking action to move the Hon’ble Court to seek its intersession, against this kind of arbitrary decision in the name of Policy Decision.

The copies of the Agenda and the Minutes of the meeting of the ESI Corporation in which such a decision has been taken have, therefore,  been sought for under the RTI Act. But, if any of the readers happen to have those documents, through the ESIC Members, they may kindly transmit the same to this website to facilitate early legal action, in the interest of the working population.

Readers may also evaluate for themselves the manner in which benefits made available to the Insured Persons have been reduced post 2010.

1). http://www.outlookindia.com/article/the-gurney-grinds-to-a-sad-halt/295143

2) https://flourishingesic.info/2012/09/27/enigmatic-amendment-2011-that-affect-the-benefits/

3). and the response of Ms. Nisha Parveen below the thread referred to supra.


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

Atifete 2


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

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

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

Application under the RTI Act

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

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

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

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

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

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

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

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

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

Kosova adores informing the Public

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

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

What Parliament was informed

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

Consolidated Fund of India Vs. Public Fund of the ESIC

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

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

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

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

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

Pulling wool over the Parliament’s eyes

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

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

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

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

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

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


Gulbarga ESIC Hospital

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

4,00,000 Vs 40,000

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

Later realisation and regret

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

Order dated 05.01.2015

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

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

Order dated 18.03.2015

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

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

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


 photo courtesy: nammagulbarga.com and ESIC websites. For more: June 29, 2009: http://www.deccanherald.com/content/10627/two-central-medical-colleges-gulbarga.html “Mr. Kharge has emphatically stated that he would pump in Rs 100 cr during the current year itself for the ambitious venture.” That was in the year 2009-10 while the ESI Act got amended to enable setting up medical colleges only in the next year 2010-11. September 19, 2012: http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/gulbarga-to-get-esic-medical-college/article3913261.ece August 1, 2014: http://indianexpress.com/article/business/business-others/govt-to-pull-the-plug-off-esic-medical-college-plan/ August 23, 2014: http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/esic-medical-colleges-to-be-transferred-to-government/article6343917.ece


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