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Trade unions condemn government's move to reduce ESI contribution

The government reduced the contribution under the Employees' State Insurance Act from from 6.5% to 4% which it cleaned will benefit 3.6 crore workers and 12.85 lakh employers.

, ET Bureau|
Jun 14, 2019, 05.31 PM IST
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The reduction in ESI contribution is going to create difficulty to meet obligations of social security and medical benefit to the enhanced number of beneficiaries.
Trade unions have condemned government's move to reduce ESI contribution saying it will benefit employers and make it difficult for ESIC to meet the social security obligation.

While the Centre of Indian Trade Union says it is in gross violation of the decision of the tripartite governing body of ESI and would lead to benefits up to Rs 10,000 crore to the employers, the AITUC said the reasons cited for this decision are patently false, as inspection for coverage has been abolished.

The government, had on Thursday, reduced the contribution under the Employees' State Insurance Act from from 6.5% to 4% which it cleaned will benefit 3.6 crore workers and 12.85 lakh employers.

According to CITU, tripartite meeting of the governing body of EDI held last year had unanimously decided to bring down the ESI contribution to 5% with employers contribution of 4% and employees' contribution of 1%.

"Government has declared further deduction in ESI contribution to 3.25% (a deduction of 1.5% for the employers) while reducing the workers contribution to 0.75% further reducing the total contribution-generation to 4% in gross violation of the unanimous decision of the tripartite governing body," CITU said in a statement on Friday.

"In totality, the employers’ obligation towards ESI has been drastically reduced by 1.5% while reducing the workers contribution by only 1%. This would lead to huge benefits/savings of the employers to the tune of estimated Rs 8000 to Rs 10000 crore," CITU added.

Accordingt to CITU, the reduction in ESI contribution mainly to benefit the employers/business class is going to create serious difficulty to meet its obligations of social security and medical benefit to the enhanced number of beneficiaries.

"CITU vehemently condemns such arbitrary move of the NDA-II Govt in the interest of the corporate lobby and demands implementation of the Governing Body decision on ESI contribution dated in letter and spirit," it added.

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