The Hindu Business Line : Gap narrows between organised sector wages, per capita income

Bangalore, Nov. 2 The organised sector workforce is no longer a wage island. The gap between organised sector wages and per capita income has been narrowing in recent years. It is another matter that employment in the organised sector has been increasing since 2004-05, reversing a decade or so of jobless growth.

The per capita contribution income of the Employees’ State Insurance Corporation (or the contribution income on account of one employee insured with it) increased from Rs 1,840 per annum in 2000-01 to Rs 3,296 a year in 2008-09. Contributions from employer and employee amount to 6.5 per cent of the workers’ salary. By this reckoning, the average monthly salary of the organised sector worker was Rs 2,359 in 2000-01 and Rs 4,225 in 2008-09.

Employment rising

The ratio of the organised sector workers’ wage to the per capita income (taking the per capita income of Rs 15,881 or Rs 1,323 a month in 1999-00) was 1.78 in 2000-01. In 2007-08, the per capita income was Rs 33,823. Assuming that this is now about Rs 36,000 a year or Rs 3,000 a month, the ratio works out 1.40. This shows that while employment in the organised sector is rising, which shows up in higher ESI contributions, the gap between this and the per capita income is narrowing.

ESIC surpluses have increased over the years because the contribution income increased by 155 per cent between 2000-01 and 2007-08, while the expenditure increased by 43 per cent over this period, from Rs 1,082 crore to Rs 1,549 crore.

Contribution income

According to officials, the contribution income, at Rs 4,500 crore in 2008-09, was 12.8 per cent higher than the contribution income in 2007-08. Officials said that the surplus out of operations amounted to Rs 2,500 crore in 2008-09, against Rs 2,440 crore in 2007-08.

The number of insured under ESIC actually fell from 84.93 lakh as on March 31, 2001, to 79.12 lakhs in March 31, 2004. But on March 31, 2008, the number of insured persons was 121 lakhs, reflecting a turnaround in employment trends. Officials said that the number of persons ensured with ESIC is expected to have increased by 10 per cent in 2008-09, against a growth of about 20 per cent in the previous year.

Karnataka tops

Officials said Karnataka topped the number of ESIC registrations in 2008-09, more than registrations in other industrialised regions, such as the National Capital Region of Delhi, Maharashtra, Gujarat and Tamil Nadu.

The ESIC officials said that there was no noticeable impact of the 2008-09 industrial slowdown in Karnataka and Andhra Pradesh. However, the number of registrations is believed to have taken a hit in the Pune region, suggesting that there was negative growth in employment.

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