The Hindu Business Line : ‘ESI seen as ineffective health scheme’

Employee State Insurance (ESI) is seen as an ineffective health insurance scheme for the organised sector temporary employees. In a study by staffing solutions company, TeamLease Services, nearly 70 per cent of temporary employees view the ESI deduction as a form of tax for which they get no or very poor return.

The report says that only 30 per cent of the two per cent who used ESI facilities were satisfied with the facilities and this was because of the poor and dilapidated conditions of the ESI facilities.

Another reason the report cited for poor usage of the facilities was the complex functioning of the ESI scheme that makes it ‘almost incomprehensible to the employee who pays for it.’ Only 15 per cent of the employees surveyed knew how the scheme functioned.

The report says that despite ESI Corporations’ revenues of Rs 2,400 crore in fiscal 2005-06 and an operating surplus of Rs 1,130 crore, the ESI infrastructure is way below WHO standards.

ESIC has a just one bed for 1,882 people to be served, which when benchmarked against bed availability in other countries, the ratio is ‘embarrassingly inadequate and needs to be improved at the least by a factor of 3.’

Mr N. Venkataraman, CFO, TeamLease Services, said about the study, “Our research points to an immediate need to revisit the fundamentals of the ESI scheme to address the radically changed employment scenario in the country. ESI reforms need to be prioritised because of the poor value for money, poor design and lack of consumer choice.”

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