Panel to study salary cap for ESI benefits

 The Centre has decided to constitute a committee to study the issue of increasing the salary ceiling for workers eligible for the Employees’ State Insurance (ESI) facilities.

In the ESI Corporation meeting chaired by Union Labour Minister Oscar Fernandes here on Friday, it was decided to form a panel after it failed to arrive at a unanimous decision on increasing the ceiling cap for workers.

Though former labour minister Sis Ram Ola in September last year announced the increase, the salary cap of beneficiaries to Rs 25,000 from Rs 15,000, it was opposed by small enterprises saying that increase salary cap could result in higher deduction in salaries and increase the financial burden on employers.  Instead of increasing the cap to Rs 10,000 at one stroke, the government should increase marginally. But, Ola died in December and his proposal was not notified by the ministry.

The same agenda was taken during Friday’s meeting during which employees’ representatives favoured for increase the ceiling while it was opposed by employers. “Now the committee has been constituted and it will discuss with all the stakeholders and submit its report,”  sources in the ministry told Deccan Herald.

Earlier, while increasing the cap, Ola had said the move would provide medical benefit to an additional 42 lakh workers. The revision would have meant that all industrial workers who earn a salary of up to Rs 25,000 benefited from medial and hospitalisation facilities at clinics and hospitals that the ESIC runs or has a tie-up.

The last increase in the salary ceiling for ESI was made in May 2010, when it was raised to Rs 15,000 from Rs 10,000.  At present, around 1.75 core workers and their family members availing benefit from ESI facilities.

For ESI Corporation, eligible employees contribute 1.75 per cent of their salary every month towards this; employers contribute another 4.75 per cent to the ESI corpus.