1. Employee’s State Insurance
ACT, 1948
By: Sachin Masan, BAMS (IIIrd Year)

2. Scope
1. Purpose: The ESI Act, 1948, is a law in India designed to provide social security and health
insurance benefits to industrial workers.
2. Amendments: The act was initially passed in 1949 and has been amended in 1975, 1984, and 1989 to
improve its provisions.
3. Benefits: It offers cash and in-kind benefits to workers who face sickness, maternity, or employment-
related injuries. This helps alleviate their financial and physical concerns.
4. Scope: The ESI Act applies to the entire country. It covers factories employing less than 20 workers
with power and more than 20 workers without power. In 1975, it was expanded to include various
other establishments like hotels, cinemas, road transport, newspapers, and shops.
In summary, the ESI Act serves as a safety net for workers in India, ensuring they receive support during
health-related challenges and job injuries.

3. ● Coverage Expansion (2004): The Act covers all employees, including manual, clerical,
supervisory, and technical workers, earning up to ₹7500 per month.
● Extension to Other Establishments: The provisions of the Act can be applied to other
agricultural or commercial establishments as needed.
● Name Explanation: The name “ESI Act” has significance:
● “Employees” because it’s for workers.
● “State” because state governments are responsible for helping workers in times of
crisis.
● “Insurance” because workers contribute a small percentage (1% to 2.5%) of their
wages as a premium, even if they don’t immediately benefit.

4. Administration
Imagine the ESI Scheme like a well-organized team:
1. ESI Corporation (The Big Boss):
- Meets twice a year.
- Led by the Labor Minister and other important folk like government, representatives of
employees, employers and medical professionals
- They create the game plan (policies) for the scheme.
2. Standing Committee (The Doers):
- Made up of team members from ESI Corporation.
- They meet four times a year.
- Their head honcho is the Director General.
- These are the folks who execute the game plan and make sure things run smoothly
day to day.

5. 3. Medical Benefit Council (The Health Experts):
- Led by the Director General of Health Services.
- They have a mix of health experts, employees, employers, and representatives from different
places.
- Their job is to give advice on how to keep everyone healthy.
4. Field Offices (The Helpers):
- There are 21 State Wise regional and 15 local offices
- They handle claims and make sure everyone gets the money they need.
- Inspectors keep an eye on things to make sure everyone's playing fair.
So, it's like a big team effort. The bosses make the rules,
the doers make things happen,
the health experts keep everyone well,
the helpers make sure the money gets to the right people.
Teamwork makes the ESI Scheme work!

6. The benefits for employees under the ESI Scheme :
Cash Benefits (First Five):
1. Sickness Benefit: Money when you're sick and can't work.
2. Maternity Benefit: Support for new moms during pregnancy and childbirth.
3. Disablement Benefit: Help if you're hurt at work and have a lasting injury.
4. Dependent Benefit: Assistance for your family if worker pass away.
5. Funeral Benefit: Financial help when a loved one passes away.
6. Medical Benefit: You get medical care and treatment when you're unwell.
7. Rehabilitation Benefit: Assistance to recover and return to work after a serious
injury or illness. It's like a helping hand to rebuild your life.
These benefits are for employees earning up to ₹7,500 per month, providing a safety
net during tough times.

7. Sickness Benefit
What is it?
- Cash support when you're too sick to work.
- Certified by an Insurance Medical Officer.
How much?
- 50% of your daily wage.
- Up to 91 days for short-term illnesses.
Extended Sickness Benefit:
- For long-term illnesses.
- Up to 309 days if you've worked continuously for two years.
Covered Illnesses:
- Includes diseases like tuberculosis, diabetes with complications, heart diseases, and more.
- 34 diseases in total.
Important Note:
- Job is protected during sickness.
- It covers illnesses, whether work-related or not.

8. Maternity Benefit:
- For insured women workers.
- Duration varies:
- Miscarriage and premature birth: 6 weeks.
- Sickness due to pregnancy: 30 days.
- Confinement (before & after delivery): 12 weeks.
- Paid at full wages.
Disablement Benefit:
- For workers disabled due to work-related reasons or job injuries. 3 types
- Temporary disability: 85% of wages.
- Total permanent disability: Full pension for life.
- Partial permanent disability: A portion as a life pension.

9. Dependent's Benefit:
- For the family of an insured worker who dies due to a work injury.
- Paid periodically.
- Children and widow get 40% more than the Standard Benefit Rate.
- Minimum benefit: ₹14 per day.
- Benefits for children until 18 years, or until the daughter gets married.
- Widow gets benefits for life or until remarriage.
Funeral Benefit:
- Immediate cash benefit, up to ₹2500.
- Given to the eldest surviving family member to cover funeral expenses

10. Medical Benefit
Medical Benefit:
- Unlike other benefits, this is not cash but medical care.
- It includes three types of medical care:
1. Full Medical Care:
- Hospitalization, free for insured persons and their families during sickness, work injuries, and
maternity.
- Services include outpatient care, inpatient care, drugs, specialists, tests, antenatal and postnatal
care, and more.
- Complex cases may be referred outside the state, paid for by ESI.
2. Limited Medical Care:
- Only outpatient care is provided.
3. Partial Medical Care:
- Full care but no hospitalization

11. Direct and Indirect pattern
Direct Pattern:
- Through ESI hospitals and dispensaries.
- Full-time medical and paramedical staff.
- Established where there are more than 1000 families.
Indirect Pattern (Panel System):
- Care provided indirectly through private doctors known as 'Insurance Medical
Practitioners.'
- 1 doctor per 750 families.
- Doctors receive a fixed payment, whether services are used or not.

12. Miscellaneous Medical Benefits:
- Free supplies for disabled workers.(Spects, hearing aid etc)
- Preventive shots.
- Free contraceptives and rewards for sterilisation.
- Yoga training
Cost of Medical Benefit:
- It's been rising over the years.
- Was
₹23.79 in 1961-62,
₹67.53 in 1973-74,
₹905 in 2001-02.
Rehabilitation Benefits are also received by workers.

13. ESI Scheme by March 31, 2003:
- Covered 78 lakh employees, including 14 lakh women.
- Total beneficiaries around 253 lakhs.
- 27,000 beds available.
- 700 ESI hospitals, 350 specialist centers, and 1500 hospitals.
- Doctor to population ratio: 1:585 (better than the national average of 1:2148).

14. Benefits to Employers:
- Exemption from Workmen's Compensation Act, 1923.
- Exemption from Maternity Benefit Act, 1961.
- No need to pay medical allowances or arrange medical care.
- Rebate on Income Tax for ESI contributions.
- Promotes a healthy workforce.

15. Workmen's Compensation Act, 1923:
- Deals with compensating workers for occupational injuries or diseases.
- Applicable where ESI Scheme isn't in place.
- Compensation amount decided by labor courts.
- Challenges due to illiteracy, ignorance, and employer indifference.

16. Thank you 😃