Employees’ State Insurance Corporation (ESIC): 75 Years of Social Security in India

Context

The Employees’ State Insurance Corporation (ESIC) recently commenced celebrations marking 75 years of service at Bharat Mandapam, New Delhi. Established under the ESI Act, 1948, ESIC represents one of India’s earliest and most comprehensive social insurance mechanisms for workers in the organised sector.

Q1. What is the legal basis, structure, and core objective of the Employees’ State Insurance Corporation (ESIC)?

1. ESIC is a statutory body constituted under the Employees’ State Insurance Act, 1948.
2. It functions under the administrative control of the Ministry of Labour and Employment.
3. The corporation administers the Employees’ State Insurance (ESI) scheme.
4. Its primary objective is to provide social security protection to workers in cases of sickness, maternity, disablement, and death due to employment injury.
5. It operates through a network of hospitals, dispensaries, and regional offices.
6. The scheme embodies contributory social insurance principles rather than direct budgetary welfare.

Q2. How did the Employees’ State Insurance scheme originate, and what milestones shaped its institutional development?

1. The foundation of social insurance in India can be traced to the “Report on Health Insurance” submitted to the Tripartite Labour Conference.
2. The report was prepared under the leadership of Prof. B. P. Adarkar, often referred to as “Chhota Beveridge”.
3. The ESI Act was enacted in 1948 to operationalise these recommendations.
4. Dr. C. L. Katial became the first Director General of ESIC.
5. The scheme was inaugurated in Kanpur on 24 February 1952 by Prime Minister Jawaharlal Nehru.
6. February 24 is commemorated annually as ESIC Day.
7. Over decades, the scheme expanded geographically and sectorally.

Q3. What types of social security benefits are provided under the ESI scheme?

1. Medical benefits include comprehensive healthcare for insured persons and their dependents.
2. Sickness benefits provide wage compensation during certified illness.
3. Maternity benefits ensure income support to insured women during childbirth.
4. Disablement benefits cover temporary or permanent work-related injuries.
5. Dependants’ benefits are provided in cases of employment-related death.
6. Funeral expenses are reimbursed to the family.
7. Rehabilitation and vocational training support injured workers’ reintegration.

Q4. How is ESIC structured administratively, and what is its governance composition?

1. The Union Minister of Labour serves as the Chairman of ESIC.
2. A Director General, appointed by the Central Government, acts as the Chief Executive Officer.
3. The corporation includes representatives from Employers, Employees, Central Government and State Governments.
4. Members of Parliament are part of the governing body.
5. Medical professionals are included to ensure healthcare oversight.
6. The tripartite structure reflects participatory governance principles.
7. State-level implementation is coordinated through regional boards.
8. Administrative decisions are supported by specialised committees.

Q5. Who is eligible for coverage under the ESI scheme, and how is it financed?

1. The scheme primarily covers workers in factories and specified establishments.
2. Employees earning below a notified wage ceiling are eligible.
3. Coverage extends to both private and certain public sector units.
4. Financing follows a contributory model.
5. Contributions are shared between Employers and Employees.
6. The Central and State Governments share medical expenditure responsibilities.
7. Funds are pooled into a dedicated insurance corpus.

Q6. What is the broader significance of ESIC in India’s labour welfare and social protection framework?

1. ESIC represents one of the earliest social insurance initiatives in independent India.
2. It promotes income security for organised sector workers.
3. The scheme reduces out-of-pocket healthcare expenditure.
4. It strengthens labour market stability.
5. ESIC contributes to formalisation of employment.
6. It aligns with constitutional goals of social justice under Directive Principles.
7. The scheme supports inclusive economic growth.

Q7. What are the contemporary challenges and reform priorities for ESIC as it marks 75 years of service?

1. Expanding coverage to informal and gig workers remains a challenge.
2. Infrastructure modernisation is needed in hospitals and dispensaries.
3. Digitalisation of claims processing can improve efficiency.
4. Financial sustainability must be maintained amid rising healthcare costs.
5. Awareness gaps limit enrolment among eligible workers.
6. Strengthening coordination with state governments can enhance service delivery.

Conclusion

As ESIC completes 75 years, it stands as a cornerstone of India’s social security architecture. By combining contributory insurance with state oversight, it has provided healthcare and financial protection to millions of workers. However, expanding coverage, improving infrastructure, and adapting to new forms of employment will be essential to sustaining its relevance in the evolving labour landscape.