Employees' State Insurance

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Employee State Insurance Corporation
Industry Insurance
Founded 25 February 1952
Headquarters New Delhi, India
Website esic.nic.in

Employees' State Insurance (abbreviated as ESI) is a self-financing social security and health insurance scheme for Indian workers. This fund is managed by the Employees' State Insurance Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948. ESIC is an autonomous corporation by a statutory creation under Ministry of Labour and Employment, Government of India.[1]


In March 1943, B. P. Adarkar was appointed by Government of India to create a report on health insurance scheme for industrial workers.[2] The report became the basis for the Employment State Insurance (ESI) Act of 1948.[2] The ESI Act was enacted in 1948 and came into effect from 24 February 1952.[3]:1 The act was initially intended for factory workers but later became applicable to all establishments having 10 or more workers. As of 2011-12, the total beneficiaries are 65.5 million.[4]:13[5]

ESI Act[edit]

Employees' State Insurance Corporation (ESIC), established by ESI Act, is an autonomous corporation under Ministry of Labour and Employment, Government of India. As it is a legal entity, the corporation can raise loans and take measures for discharging such loans with prior sanction of the central government and it can acquire both movable and immovable property and all incomes from the property shall vest with the corporations.[6] The corporation can set up hospitals either independently or in collaboration with state government or other private entities, but most of the dispensaries and hospitals are run by concerned state governments.


For all employees earning 21,000 (US$320) or less per month as wages, the employer contributes 4.75 percent and employee contributes 1.75 percent, total share 6.5% percent. State government's share is 1/8th and that by central government is 7/8th. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family. ESI scheme is a type of social security scheme for employees in the organised sector.[7]

The employees registered under the scheme are entitled to medical treatment for themselves and their dependents, unemployment cash benefit in certain contingencies and maternity benefit in case of women employees. In case of employment-related disablement or death, there is provision for a disablement benefit and a family pension respectively.[3]:67 Outpatient medical facilities are available in 1418 ESI dispensaries and through 1,678 private medical practitioners. Inpatient care is available in 145 ESI hospitals and 42 hospital annexes with a total of 19,387 beds. In addition, several state government hospitals also have beds for exclusive use of ESI Beneficiaries. Cash benefits can be availed in any of 830 ESI centres throughout India.[4]:13,16

Recent years have seen an increasing role of information technology in ESI, with the introduction of Pehchan smart cards as a part of Project Panchdeep.[4]:8[8] In addition to insured workers, poor families eligible under the Rashtriya Swasthya Bima Yojana can also avail facilities in ESI hospitals and dispensaries. There are plans to open medical, nursing and paramedical schools in ESI hospitals.[4]:8[5]

New Amendment[edit]

The Employees’ State Insurance Corporation (ESIC) raised the monthly wage limit to Rs 21,000, from the existing Rs 15,000, for coverage with effect from 1st January 2017 [9]


  1. ^ bibleHR.com. What is ESIC?: ESIC FAQ. Retrieved 1 January 2016. 
  2. ^ a b C M Abraham. Sociology for Nurses : A Textbook for Nurses and Other Medical Practitioners. Retrieved 23 August 2013. 
  3. ^ a b "Employee State Insurance: For a handful of contribution, a bagful of benefits24 February 2011" (PDF). 
  4. ^ a b c d "Annual Report 2008-2009" (PDF). Employees' State Insurance Corporation. Retrieved 23 February 2011. 
  5. ^ a b "ESI plans 11 medical colleges". The Hindu. Chennai, India. 28 October 2009. Retrieved 23 February 2011. 
  6. ^ K.M.Pillai. Labour & Industrial Laws (Fourteenth Edition, 2012 ed.). Allahabad Law Agency. ISBN 81-89530-71-2. 
  7. ^ "What is ESI Scheme". Retrieved 6 March 2016. 
  8. ^ "Kharge launches smart cards for ESIC". The Hindu. Chennai, India. 26 August 2009. Retrieved 23 February 2011. 
  9. ^ "ESI Wage Limit Rased". Retrieved 7 September 2016. 

External links[edit]