Lok Sabha Question No. 202 (STARRED), answered on 2019-07-08
Subject: Reduction in ESI Contribution
Ministry: LABOUR AND EMPLOYMENT
Asked by: Sudheer Gupta, Sanjay Sadashivrao Mandlik

## GOVERNMENT OF INDIA

## MINISTRY OF LABOUR AND EMPLOYMENT

## LOK SABHA

## STARRED QUESTION NO. 202 TO BE ANSWERED ON 08.07.2019

## REDUCTION IN ESI CONTRIBUTION

*202.  SHRI SUDHEER GUPTA: SHRI SANJAY SADASHIV RAO MANDLIK:

Will  the  Minister  of  LABOUR  AND  EMPLOYMENT  be  pleased  to state:

- (a)whether  the  Employees'  State  Insurance  (ESI)  Act  allows  certain parameters to be applicable on different companies in the country and if so, the details thereof;
- (b)whether  the  Government  has  reduced/proposes  to  reduce  the  salary contribution of industrial workers eligible for healthcare benefits under the  said  Act  from  6.5  per  cent  to  4  per  cent  and  if  so,  the  details thereof along with the reasons therefor;
- (c)the  total  number  of  employees  likely  to  be  benefited  by  the  said proposal across the country;
- (d)whether  the  Government  has  carried  out  special  programmes  to register employees to expand social security cover for the employees and  if  so,  the  details  thereof  and  the  outcome  of  such  programmes; and
- (e)whether the Government has also decided to expand the coverage of ESI scheme to all the districts across the country in a phased manner and  if  so,  the  details  thereof  along  with  the  steps  taken  in  this direction?

## ANSWER

MINISTER OF STATE (IC) FOR LABOUR AND EMPLOYMENT

(SHRI SANTOSH KUMAR GANGWAR)

- (a) to (e):
- A statement is laid on the Table of the House.

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STATEMENT RERERRED TO IN REPLY TO PARTS (a) to (e) OF LOK SABHA STARRED QUESTION NO.202 FOR 08.07.2019 BY SHRI SUDHEER GUPTA AND SHRI SANJAY SADASHIV RAO MANDLIK REGARDING  REDUCTION IN ESI CONTRIBUTION

- (a): The  Employees'  State Insurance Act, 1948  (ESI Act) is applicable in the areas notified under section 1(3) of the ESI Act.  At the first instance, the ESI Act is applicable to all factories (including factories belonging to the Government) deploying 10 or more employees other than seasonal factories under section 2(12) of the Act functioning in that area. Further,  under  section  1(5)  of  the  ESI  Act,  the  appropriate  Government may notify the provisions of the ESI Act to any establishments or class of establishment, industrial, commercial, agricultural or otherwise, provided that where the provisions of ESI Act have been brought into force in any part  of  a  State,  the  said  provisions  shall  stand  extended  to  any  such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State.  Further, employees earning wages  upto  Rs.21,000/-  p.m.  (Rs.  25,000/-  p.m.  in  case  of  persons  with disabilities) are covered under the ESI scheme.
- (b): Yes, Sir. The rate of ESI contribution has been reduced from 6.5 per cent (employers' contribution @ 4.75 per cent of wages payable to employee  and  employees'  contribution  @  1.75  per  cent)  to  4  per  cent (employers'  contribution  @  3.25  per  cent  and  employees'  contribution @  0.75  per  cent)  with  effect  from  01.07.2019  to  reduce  the  burden  on employees and employers, improve the coverage as well as compliance of ESI Scheme and also contribute towards ease of doing business.
- (c): Around  3.60  crore  number  of  employees  are  likely  to  be benefitted by the said proposal across the country.
- (d): Under  ESIC  2.0  programme,  ESI  Scheme  was  extended  in newly implemented areas. Out of total 722 districts, the ESI scheme has been extended to 541 districts.
- (e): Periodical  surveys  are  carried  out  from  time  to  time  for bringing more units and their employees in the umbrella of ESI scheme. Survey  programme  has  been  launched  w.e.f.  01.07.2019  for  a  period  of three months. It has been decided that the ESI Act shall be extended to the entire country by the year 2022.

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