Rs 73,303cr corpus with ESIC, Par panel find it immoral

The Employees State Insurance Corporation (ESIC) has come under fire for accumulating Rs 73,303 crore as corpus fund at a time expenditure on workers' medical needs "remains low", prompting a Parliamentary panel to describe it "immoral and illegal".

Workers and employers contribute to the ESIC for availing medical benefits but only around half of what is collected is spent and the insured employees are "being deprived" of the benefits of the scheme due to lack of coverage and poor functioning of hospitals among other things, the panel has said in a report tabled in Parliament recently.

Mincing no words, the Parliamentary Standing Committee on Labour said the contribution is "more like a cess" imposed on workers and employees. It wanted the ESIC to work rationalise the contribution or lower the present rate from employees and employers, which is now 1.75% and 4.75% respectively.

"The mandate of the ESIC was to collect the contribution and to provide the medical benefits etc, but ESIC has acted contrary to the intention of the legislature and has collected the money but has not spent it adequately for the beneficiaries, from whose money ESIC has created the fund," the committee led by BJP MP Kiri Somaiya said.

At present, the ESIC provides medical care to families of 3.19 crore insured persons through 154 ESI hospitals and 1485 dispensaries across the country. As per the ESI Act, which applies to factories employing 10 or more persons, a government can extend the provisions to other class of establishments, industrial, commercial, agricultural or otherwise.

The corpus fund as on March showed a substantial growth from Rs 59,383.00 crore in 2016-17, which is an increase of Rs 13,920 crore in just one year, while the interest alone from 2012 to 2017 comes to Rs 19,993.74 crore. This corpus is "accumulating year, by year whereas the expenditure of the ESIC under the ESI scheme remains low".

While the contribution income from workers and their employers in the ESIC net was Rs 13,662.44 crore in 2016-17, the expenditure was Rs 7,644.58 crore which was just 55.95% of the total amount collected.

"As regard to expenditure of funds...the per capita medical expenditure including cash benefit in last few years is not even 50% of the contribution received for these years. It follows from this that rest of the funds were either put in the reserve fund or utilised to meet the administrative expenses of ESIC," it said.

While the panel has raised questions over the fund, the ESIC argue that the rules allow the Corporation to invest, transfer or realisation of funds and all money belonging to the Fund which are not immediately required for expenses could be invested by the Director General subject to the approval of the Standing Committee. (