ESIC considers to extend medical benefits to unorganised, gig workers

Employees' State Insurance Corporation has already initiated several discussions with various stakeholders

In a bid to broaden the reach of social security, the government is considering extending medical benefits under its primary social security scheme for the organised sector — Employee State Insurance (ESI) — also to unorganised and gig sector workers.

The Employee State Insurance Corporation (ESIC) has already initiated several discussions with various stakeholders in this regard.

 “The ESIC has held talks with various stakeholders on drawing plans to extend the coverage. Typically, the focus would have been on enhancing compliance to bolster the scheme’s subscriber base. But, now the ESIC wants to include both unorganised sector and gig/platform workers,” a person aware of the development told Business Standard. 

Queries sent in this regard to the ESIC did not elicit response until the time of going to press. 

Established under the Employees State Insurance Act, 1948, the ESI scheme currently applies to all factories employing 10 or more individuals earning up to Rs 21,000 per month, but only in notified areas. Recent data from the labour ministry revealed that the ESI scheme extends to 611 districts across 36 states/Union territories, with a network of 161 hospitals and 1,574 dispensaries. The number of insured persons (IPs) stands at 37.2 million.

Sandeep Sachdeva, co-founder of Safe in India Foundation, said that while extending the benefits of the scheme to unorganised and gig sector workers, the ESIC must be cautious to manage the downside risks to ensure that the quality of their currently sub-par services does not deteriorate further.

“We certainly need improved social security for unorganised and gig-economy workers. However, unless the new set of workers are included in the scheme at the same current rate of 4 per cent of wages as insurance premium, funded by their employers or the government, the accumulated contributions of the existing subscribers over all these years and possibly in future may end up being used to subsidise benefits for the newly joined unorganised sector workers. The ESIC must, therefore, add new segments extremely judiciously and in a very controlled and phased manner, if at all,” he further said.

Under the new Code on Social Security, 2020, the coverage of the ESI scheme is set to extend across India to all establishments employing 10 or more employees under the Code, as opposed to the currently notified districts/areas. A provision for voluntary coverage of establishments with fewer than 10 persons has also been incorporated.

“The code also has provisions for formulating special schemes for unorganised workers, like platform workers and gig workers. The current deliberations by the ESIC to extend the currently functional ESI scheme to these categories is part of this policy,” said the source cited above. 

A report by the Parliamentary Standing Committee on Labour in September of the previous year also expressed concerns about the ESIC’s capacity to provide extended coverage as envisaged under the social security code. “The Committee notes that with the implementation of the Code, the coverage of ESI is to expand pan-India. The (labour) ministry has admitted that considering the existing infrastructure, expanding the coverage without proper development/ augmentation of facilities will not be in the interest of insured persons/beneficiaries,” the report noted.