CITU DENOUNCES UNILATERAL DECISION OF CENTRAL GOVT TO REDUCE ESI CONTRIBUTION IN VIOLENCE OF THE TRIPARTITE GOVERNING BODY CONCLUSION  

The Centre of Indian Trade Union denounces the unilateral and arbitrary decision of the Govt of India to reduce rates of contribution to Employees State Insurance Scheme (ESI) in gross violation of the decision of the tripartite Governing Body of ESI.

In the 175th tripartite Governing Body meeting of ESI held on 18-09-2018, it was unanimously decided to reduce the employers’ contribution to ESI from 4.75% of the wages of the enrolled workers to 4% and the workers contribution from 1.75% to 1% making the total ESI contributions at 5% annually. Accordingly draft Gezette Notification was issued asking for opinion, if any, within 45 days. Simultaneously in the 177th  Governing Body meeting held on 19 February 2019 in the presence of  and under the Chairmanship of Union Labour Minister, ESI Budget for the coming financial year (1919-20) was finalized on the basis of this the contribution generation of 5%.

Now suddenly, after the new Govt assumed charge with the same Labour Minister, the Govt 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.

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.

And ill motive of the Govt to benefit the employers’ lobby gets further clear by the fact that in the meeting of the tripartite Standing Committee of ESI Governing Body held on 13th June 2019, nothing was reported about the Govt decision on reduction of ESI contribution to be announced on same day evening 7-35 pm, and its arbitrary departure from the unanimous decision of the Governing Body of which Labour Minister was a party.

The increase of increase in enrollment in ESI as claimed by the Govt is due to upward revision of entitlement level from Rs.15000/ to Rs 21000/- from 1-1-2017 as decided by the Tripartite Governing Body. Reduction in ESI contribution mainly to benefit the employers/business class played no role in it. Rather this 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 on 18-09-2018 in letter and spirit.

Tapan Sen
General Secretary

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