ESIC likely to raise wage ceiling to ₹30,000, expanding coverage to over 50 lakh workers

NEW DELHI: The Employees' State Insurance Corporation (ESIC) may soon raise the wage ceiling for eligibility under its social security scheme from the existing ₹21,000 to ₹30,000 per month, a move that could bring an additional 50 lakh workers under its ambit. The proposal was discussed during a meeting of the ESIC board in New Delhi on Tuesday, chaired by Union Labour Minister Mansukh Mandaviya, who assured trade union representatives that the government is actively considering the revision.

At present, ESIC provides medical and cash benefits to over 3.8 crore insured workers and their dependents across India. However, several trade unions have been demanding an upward revision of the wage ceiling, arguing that the current threshold has become outdated due to rising minimum wages and inflation in various states.

Speaking to The Hindu after the meeting, S. Durairaj, the Bharatiya Mazdoor Sangh (BMS) representative on the ESIC board, said the demand was made unanimously by all trade union representatives. “We have raised this demand in one voice. Two years ago, the minister had assured us that the government is positively considering this proposal. We are hopeful that it will be implemented at the earliest,” he said.

Mr. Durairaj also highlighted that the definition of wages under the Code on Wages and the Code on Social Security could help expand coverage. If basic wages, dearness allowance, and retaining allowances are included within the proposed ₹30,000 limit, many more workers would qualify for ESIC benefits, he explained.

The BMS leader has written to ESIC Director General Ashok Kumar Singh, urging an urgent revision of the wage ceiling. In his communication, he pointed out that minimum wages in many states have already surpassed the existing ₹21,000 limit, effectively excluding a significant section of workers from the scheme.

The meeting also witnessed sharp differences over an ESIC proposal to contract primary health centres (PHCs) for treating insured workers. Trade union representatives opposed the move, arguing that PHCs are already accessible to the general public and that the focus should instead be on strengthening ESIC’s own infrastructure, including hospitals and dispensaries. According to sources, the board has decided to defer a decision on this proposal until further consultation.

ESIC is a statutory body under the Ministry of Labour and Employment that administers the Employees' State Insurance Act, 1948. The scheme covers workers earning up to the prescribed wage ceiling in factories and establishments with 10 or more employees. Benefits include medical care, sickness benefit, maternity benefit, disablement benefit, and dependent benefit.

Labour experts have long argued that the wage ceiling should be reviewed periodically to keep pace with economic changes. The last revision was made in 2019, when the ceiling was raised from ₹15,000 to ₹21,000. With the government's push for universal social security coverage, a further increase to ₹30,000 would be a significant step towards meeting that goal.

However, any increase in the ceiling would also entail higher contributions from both employers and employees, as ESIC is funded through contributions levied at fixed percentages of wages. The current rates are 3.25% for employers and 0.75% for employees. The government may need to balance the expansion of coverage with the financial sustainability of the scheme.

Trade unions have welcomed the minister's assurance but remain cautious. “We have been hearing this for two years now. We want a concrete announcement, not just a promise,” said a union representative who did not wish to be named. The next ESIC board meeting is expected to take a final call on the wage ceiling revision.