(Written by Amartya Dey)
Healthcare is a top priority for voters across the world, including in India. Successive governments in India have tried to bolster the healthcare infrastructure but much remains to be done. While some may recommend revamping the entire structure, India can avail itself of better healthcare facilities by focusing on and improving the Employee State Insurance (ESI) infrastructure.
An important welfare legislation, the Employee State Insurance Act 1948, was promulgated to ensure social security and health insurance for workers in India. The ESI ensures medical benefit, sickness benefit, maternity benefit, disablement benefit, dependents benefit, funeral expenses, and rehabilitation allowance for all employees and contract labours earning Rs 21,000 or less in wages per month. It takes care of not only the employees but also their dependent family members.
While there are lacunae in how the scheme is being implemented, the recent positive changes introduced by the government give hope to more than 13 crore beneficiaries covered under the Act.
To increase the number of beneficiaries and the country’s formal workforce, on December 22, 2016, the Ministry of Labour and Employment notified that the wage limit of coverage would be increased from Rs 16,000 to Rs 21,000 per month with effect from January 1, 2017. That means that previously, the employees who earned, say, Rs 17,000 per month were not covered under the Act, but now any employee or contract labour earning wages of Rs 21,000 per month or less is eligible. Inclusion of more beneficiaries under this scheme is better for the entire society.
Next, to reduce the burden of the employers and increase the take-home salary of the employees, the overall contribution rate was reduced from 6.5 per cent to 4 per cent. The employer’s contribution was reduced from 4.75 per cent to 3.25 per cent, while the employee’s contribution was reduced from 1.75 per cent to 0.75 per cent. This put more money in the hands of the employee and even India Inc. While the reduction made sense to many because the income of the ESIC far exceeds its expenses, the trade unions condemned the move stating that the reduction benefitted the employers more and may create difficulty on the part of the Employee State Insurance Corporation (ESIC) to serve the increasing number of beneficiaries.
The government took another inclusive step when it decided to enhance the income limit of dependent parents of an insured person covered under ESI Scheme from the existing Rs 5,000 per month from all sources to Rs 9,000 per month. This would bring the dependent parents of more subscribers under the ambit of ESI.
Further, in 2019, for improving the medical service delivery in states, ESIC decided to bear the full cost of implementing the scheme. Previously, 1/8th of the cost was borne by the states while ESIC bore the rest. Simplifying the financing part would have a positive impact on the quality of services delivered by reducing red tape and increasing the overall accountability of the ESIC.
The spell of positive changes in the ESIC universe did not stop there. In the current COVID scenario, our resources are getting stretched, especially in the healthcare sector. To overcome the challenges, Finance Minister Nirmala Sitharaman, in the month of May, made further announcements that would help in extending the ESI coverage to a greater number of people.
First, to increase coverage, ESI facilities would be available even for those firms that employ less than 10 people. While for most firms, it would be voluntary, for firms in the hazardous industries, it would be mandatory. Previously, firms with 10 or more people could only avail themselves of this facility.
Second, after the requisite amendments to the Act, the ESI coverage would be extended to all areas. Currently, ESI Coverage is restricted only to notified areas. This means that ESI coverage is given to employees who are working in the notified areas only and not to those who are working in the same organisation but posted in a non-notified area. For example, a warehouse may be established in a remote area by an organisation to save on real estate costs. If that area, unfortunately, is not notified, the employees of that organisation who are working in that warehouse would not be covered under ESI even if they earn Rs 21,000 as wages per month or less. This proposed change promises to end this unreasonable segregation and provide the facility to more employees and their dependents.
It is now apparent that the ESIC is a purposeful organisation serving millions of people and the government is consciously increasing its ambit of impact. But although many positive changes have been proposed and implemented in recent times, much more can be done and the ESIC can be a model organisation for countries around the world.
As mentioned earlier, the income of the Employee State Insurance Corporation (ESIC) far exceeds its expenses. As on March 31, 2019, the reserve funds stood at a massive Rs 91,447 crore. This is totally contrary to what the ethos or philosophy of any government scheme should be. Instead of accumulating surplus funds, those funds should be invested aggressively to establish new medical infrastructure, upgrade the current medical infrastructure, and improve the services provided to the increasing number of beneficiaries. If ESI coverage has to be extended all over India, we would require at least one ESI dispensary per district and several model ESIC hospitals in every state.
For example, in entire Northeast India, there are only ten ESIC dispensaries and only one ESIC Model Hospital in Guwahati, Assam. The other states of Northeast India deserve ESIC hospitals of their own while in Assam, alone, five more additional hospitals should be built for its five regions – Upper Assam, Lower Assam, North Assam, Hills and Central Assam, and Barak Valley. This would not only help bolster the health infrastructure of the entire region but also in reducing the harassment faced by the beneficiaries to reach the ESIC Model Hospital in Guwahati from the other parts of Northeast India. On an immediate basis, to improve the standard of services, ESIC can improve the infrastructure of the current dispensaries and the hospitals on a war footing and ensure the availability of more types of medicines in the dispensaries.
ESIC also has tie-ups with private hospitals for super-speciality services. The beneficiaries avail themselves of this cashless benefit. ESIC should look into options to strengthen the tie-ups by ensuring that the private hospital bills are settled promptly so that the ESI beneficiaries can continue to get hassle-free service.
Lastly, ESIC should look into the workforce question. While we may build the best of hospitals, if we do not have an adequate number of qualified doctors, nurses, and other administrative personnel, we would not be able to achieve the desired impact.
To conclude, there is no doubt that the ESIC is successfully serving millions of subscribers and their family members. But currently, its expenses are far lower than its income, because of which it has been able to accumulate a staggering reserve of Rs 91,447 crore by the end of FY2019. This reserve money should not be used for any other purpose other than fortifying the healthcare infrastructure of the country. Only after more hospitals and dispensaries are built, and more workforce is recruited, can we think of extending this facility to all the citizens of this country building a model universal health-care system. We do not need to reinvent the wheel and bring in new schemes. We just need to ensure that the current schemes are scaled up and implemented to the best of their promise and potential.
The writer is employee relations manager, Oil India Limited
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