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The Promulgation of Employees' State Insurance Act. 1948 (ESI Act), by the parliament was the first major legislation on Social Security for workers in independent India. It was a time when the industry was still in a nascent stage and the country was heavily dependent on an assortment of imported goods from the developed or fast developing countries. The deployment of manpower in manufacturing processes was limited to a few select industries such as jute, textile, chemicals etc. The legislation on creation and development of a fool proof multi-dimensional Social Security system, when the countries economy was in a very fledging state was obviously a remarkable gesture towards the socio economic amelioration of a workforce though limited in number and geographic distribution. India, not withstanding other pressing compulsions of self reliance and self sufficiency, thus, took the lead in providing organised social protection to the working class through statutory.

The ESI Act 1948, encompasses certain health related eventualities that the workers are generally exposed to such sickness, maternity, temporary or permanent disablement, occupational disease or death due to employment 'injury, resulting loss of wages or earning capacity - total or partial. ' Social security provisions made in the Act to counter balance or negate the resulting physical or financial distress in such. contingencies are thus, aimed at upholding human dignity in times of crises through protection from deprivation, destitution and social degradation while enabling the society the retention and continuity of a socially useful and productive manpower.

The ESI Scheme is based on the principal of 'pooling of risks and resources' in which every contributor, at any given point time, emerges as a beneficiary of a benefactor and society at large is the net gainer. Employees employers, State Govts. and the Corporation are the major stake holders in the system of organised and coordinated effort providing social protection to the benefactors. The role employers, in particular remains pivotal to the success of the scheme, be it surveys for coverage, implementation, registration of factories/establishments, registration of employees, regular payment of contribution,facilitating inspections and timely action to ensure steady flow of benefits to the employees.

COVERAGE: The ESI Act 1948 in the first instance, applies to non-seasonal factories using power in the manufacturing process and employing 10 or more persons and non-power using factories or establishments employing 20 or more persons for wages. The provision of the Act are being implemented areawise by stages. The Act contains an enabling provision under which the "Appropriate Government" is empowered to extend the provisions of the Act to other classes of establishments - industrial, commercial, agricultural or otherwise. Under these provisions most of the State Governments have extended the provisions of the ESI Act to the following classes of establishments.

Shops, hotels, restaurant, cinemas including preview theatres, road motor transport agencies and newspaper establishments, etc employing 20 or more employees.

Power using Beedi manufacturing units in the implemented areas employing 10 or more employees attract coverage under the Act. A few States have even extended the provisions of the Act to non power using Beedi manufacturing units employing less than ten persons.

Slate pencil manufacturing units employing one or more employees have also been brought under the coverage of the Act in a few States. The Scheme has so far been implemented in 26 states and union territories; the only exceptions being a few smaller . states in the North-eastern region of the country. Employees of the aforesaid factories and establishments in receipt of wages not exceeding Rs. 10,000/- PM. w.e.f. 1/10/2006 are covered under the Act. By the end of December, 02, about 2,45,000 factories and establishments at about 680 industrial centers had been brought under the coverage of the ESI Act benefiting about 80 lakh insured persons and their dependent family members.

COVERAGE UNDER THE ESI ACT, 1948 The Act was originally applicable to non-seasonal factories using power and employing 20 or more persons; but it is now applicable to non-seasonal power using factories employing 10 or more persons and non-power using factories employing 20 or more persons. Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons. The existing wage-limit for coverage under the Act, is Rs.10,000/- per month (with effect from 1.10.2006).

AREAS COVERED The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories

STATES All the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.

UNION TERRITORIES Delhi, Chandigarh and Pondicherry


 Coverage (As on 31st  March, 2006)
No. of Insured Person family units 91,48,605
No. of Employees 84,00,526
Total No. of Beneficiaries 3,54,96,589
No. of Insured women 15,43,250
No. of Employers, etc 3,00,718


ORGANISATION : At the national level, the ES1 Scheme is administered by a statutory body called the "Employees State Insurance Corporation" set-up under Employees' State Insurance Act, 1948. The Corporation comprises representatives of employees, employers, the Central Government, State Governments, medical profession and the Parliament. A Standing Committee, constituted from amongst the members of the Corporation acts as the executive body. The Medical Benefit Council, a statutory body, advises the Corporation on matters related to the provision of medical care to the beneficiaries of the Scheme. The Director General, is the chief executive of the Corporation and is also an ex-officio member of the Corporation and the Standing Committee. At the State level, Regional Boards have been constituted in each State and at the grass-root level, Local Committees have been formed as advisory bodies for smooth functioning of the Scheme. The Regional Boards and the Local Committees have representation, both hem employers and employees. For day-to-day administration, the Corporation has its Central Headquarters at New Delhi, besides Regional Offices and Sub-Regional Offices in the States and over 800 Local Offices etc. at industrial centres throughout the country.
The medical care in the States is administered by the State Governments concerned on cost sharing basis except in the National Capital Territory of Delhi and NOIDA are in Uttar Pradesh, where the medical facilities are being - provided directly by the Corporation. The Corporation has, over the last few years, also set up four well-equipped Zonal Occupational Disease Centres at Kolkata, Delhi, Chennai, Nagda(MP) and is setting up yet another , ODC at Chinchwad in Pune.The entire expenditure on these specialised Centres is brone by the Corporation and are being administered directly.