DAILY NEWS ANALYSIS

GS-III : Economic Issues Labour

27 October, 2020
8 Min Read

ESI Scheme extended to Arunachal Pradesh

The ESI Scheme stands implemented in 568 districts in all the States and Union Territories, except Lakshadweep.
Recently, the central government has extended the Employees' State Insurance (ESI) Scheme to Arunachal Pradesh, with effect from 1st November 2020.
Employees' State Insurance (ESI) Scheme provides social protection to workers and their dependents, in the organised sector, in contingencies, such as sickness, maternity and death or disablement due to an employment injury or occupational hazard.

Provisions:

The ESI Act, 1948 is applicable to factories and notified establishments in an implemented area employing 10 or more employees for wages.
The "appropriate Government" State or Central is empowered to extend the provisions of the ESI Act to various classes of establishments, industrial, commercial or agricultural or otherwise.
Most State Governments have extended the ESI Act to a certain specific class of establishments, such as shops, hotels, restaurants, cinemas, preview theatres, motors transport undertakings and newspaper establishments etc., employing 10 or more persons.
However, the threshold for Coverage of establishments is still 20 Employees in Maharashtra.
Eligibility for Employees: The existing wage limit for coverage under the Act is Rs. 21,000 per month (Rs. 25,000 per month in the case of persons with disability).
Self-Financing Scheme: The ESI Scheme is financed by contributions from employers and employees.
In June 2020, the government reduced the rate of contribution under the ESI Act from 6.5% to 4% (employers’ contribution was reduced from 4.75% to 3.25% and employees’ contribution was reduced from 1.75% to 0.75%).
Employees, earning less than Rs. 137 a day as daily wages, are exempted from payment of their share of contribution.
Benefits: The covered employees and their dependents are eligible for a host of benefits including Cashless Medical Care Services, Sickness Benefit, Maternity Benefit, Employment Injury benefits and Dependant benefits in case of death due to employment injury, Unemployment Benefits etc.
The employees covered under ESI Scheme are also entitled to unemployment allowance. There are two unemployment allowance schemes namely Atal Beemit Vyakti Kalyan Yojna (ABVKY) and Rajiv Gandhi Shramik Kalyan Yojna (RGSKY).
Administration: It is administered by an apex corporate body called the Employees' State Insurance Corporation (ESIC). The Corporation is headed by the Union Minister of Labour, as its Chairman.

Source: PIB

Source: PIB

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