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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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