Govt to pull the plug off ESIC medical college plan

ESIC will now only focus on serving the insured persons or members of the scheme, which are its prime responsibility.

By: ENS Economic Bureau | New Delhi | Published:August 1, 2014 1:09 am

The NDA government has decided to put on hold a Rs 10,500 crore-plan of the UPA government to build medical colleges around the country under the aegis of the Employees’ State Insurance Corporation (ESIC).

“Yeh ek bahut badi chook thi (this was a big mistake),” said labour minister Narendra Singh Tomar on Thursday said after a meeting of the ESIC Board.

Tomar, who heads the ESIC board, said that a committee would now review the medical colleges and also decide on how to make them work efficiently. Meanwhile, for the medical colleges that are yet to start functioning, the ESIC will approach state governments and public health institutions to help run them.

The ESI scheme, which is similar in nature to the Employees’ Provident Fund Organisation (EPFO), provides mandatory health cover and unemployment benefits to formal sector workers with a gross salary of Rs 25,000 per month.

Though it has been running hospitals under the scheme for the purpose, the ESI Act was amended in 2010 to allow it to set up medical colleges and at present 13 such institutions are in various stages of construction.

Many of these colleges were set up at the behest of members of Parliament. For instance, former labour and employment minister Mallikarjun Kharge who now heads the labour ministry had approved setting up an ESI medical college in his Lok Sabha constituency — Gulbarga (Karnataka) while former labour minister Sis Ram Ola too decided to set up a college in his constituency of Jhunjhunu, Rajasthan.

The decision would affect 13 medical colleges in various stages of construction across the country that are estimated to cost over Rs 10,000 crore.

Each medical college (including the hospital) requires a capital cost of Rs 800 crore and an annual recurring expenditure of Rs 150 crore to Rs 200 crore.

Instead, the ESIC will now only focus on serving the insured persons or members of the scheme, which are its prime responsibility.

“This is a very extravagant affair that is being built using workers’ money,” said a member of the ESIC board, pointing out that board members had repeatedly opposed the construction of these colleges due to the high cost as well as a dearth of medical faculty.

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