Lost your job? Dole is on the way

Workers in the organised sector may soon get unemployment benefits. The labour ministry will seek the Cabinet's clearance for the scheme, which will be implemented by the Employees State Insurance Corporation (ESIC) for its members.

Labour ministry officials told Business Standard that the annual corpus for the scheme was likely to be around Rs 160 crore, covering 7.2 million workers in 275,000 factories and establishments. ESIC members draw a salary of less than Rs 7,500 per month.

To begin with, the unemployment benefit, which will be in the form of a dole, will be equal to 50 per cent of the last wage drawn by a worker for a period of five months. The scheme is expected to be finalised on February 1 at an ESIC board meeting, which will be presided over by Labour Minister K Chandrashekhar Rao.

The scheme, which will be funded by the ESIC's own resources, will then be placed before the Cabinet after comments from the finance ministry.

"The finance ministry is unlikely to object to the scheme because it will be fully funded by the ESIC. Besides, it is in line with international conventions and is a feature in all developed societies," said an official.

The unemployment benefit will be available to those who are ESI members for at least nine months. "The existing cash benefits under ESI are also available only after this period," said an official.

ESIC had a revenue flow of about Rs 2,000 crore during 2003-04 while the outflow was only Rs 1,600 crore.

"It has sufficient funds to finance the scheme," said an official. ESIC revenue flow comprises contribution from the members of the scheme as well as interest income through investment in government securities and in banking instruments.