ESI Scheme: Complete Overview

In March 2023, there was a significant increase in employment as per the provisional payroll data of ESIC. A total of 17.31 lakh new employees were added during this period. Additionally, around 19,000 new establishments registered themselves, which means more businesses are now covered under the social security scheme provided by the Employees’ State Insurance Corporation. This expansion in coverage ensures that workers have greater protection. It is noteworthy that the majority of new registrations were from individuals under the age of 25, with 8.26 lakh employees belonging to this age group. This indicates a positive trend of job creation and enhanced social security coverage for the youth in the country.

About the Employees’ State Insurance Corporation (ESIC)

ESIC stands for Employees’ State Insurance Corporation. It is a social security and health insurance scheme for workers in India. Here are some important details about the scheme:

  • ESIC was launched on February 24, 1952, under the Ministry of Labour and Employment, Government of India.
  • The scheme is administered by the Employees’ State Insurance Corporation, a statutory body created under the ESI Act, 1948.
  • The objectives of the scheme are to provide social security to workers, including medical care and cash benefits, and to protect them against financial distress caused by sickness, disability, maternity, and death due to employment injury.
  • The scheme covers workers earning up to Rs. 21,000 per month in certain specified industries, such as factories, mines, and plantations, among others.
  • Employers are required to contribute 4.75% of the workers’ wages towards the scheme, while employees contribute 1.75% of their wages. Self-employed people can also avail of the benefits of the scheme by paying a nominal fee.
  • Employees earning less than Rs. 137 per day as daily wages are exempted from paying their share of the contribution.
  • The scheme provides medical benefits to workers and their families through a network of ESIC hospitals and dispensaries across the country. Cash benefits are also provided in case of sickness, disability, maternity, and death due to employment injury.
  • The significance of the scheme lies in the fact that it provides social security to workers and their families, especially in cases of medical emergencies, without causing them undue financial burden. It also ensures compliance with labor laws and promotes the welfare of workers.

Benefits under the ESI Scheme

Under the Employees’ State Insurance (ESI) Scheme, registered employees are entitled to various benefits, including:

  • Medical Benefits: The scheme provides comprehensive medical care to insured employees and their dependents. It covers expenses related to outpatient treatment, hospitalization, specialist consultations, diagnostic tests, medicines, and ambulance services.
  • Sickness Benefits: Insured employees who are unable to work due to temporary sickness receive cash benefits at a rate of 70% of their average daily wages. This benefit is provided for a maximum of 91 days in a benefit period.
  • Maternity Benefits: Female-insured employees are entitled to maternity benefits, including paid leave for up to 26 weeks (extended to 34 weeks in certain cases), pre and postnatal medical care, and a cash allowance for additional expenses.
  • Disablement Benefits: In case of employment-related disablement due to an accident or occupational disease, insured employees receive a monthly pension based on the extent of the disablement.
  • Dependent Benefits: In the unfortunate event of an insured employee’s death due to employment-related causes, their dependents are eligible for a monthly pension.
  • Funeral Expenses: The scheme provides a lump-sum amount towards funeral expenses to the dependents of an insured employee who has passed away.

These benefits aim to provide financial support and healthcare coverage to employees and their families during various situations, promoting social security and well-being.


What is ESI Act?

The Employees’ State Insurance Act (ESI Act) is a social welfare legislation that provides health and social security benefits to employees in India. It was enacted by the Indian Parliament in 1948 and is administered by the Employees’ State Insurance Corporation (ESIC). The act provides for a self-financing, contributory scheme that enables registered employees to receive medical care, sickness benefits, maternity benefits, disability benefits, and various other benefits. It is applicable to all establishments with 10 or more employees and is aimed at protecting employees against the financial consequences of work-related illnesses, injuries, and disabilities.

Who is eligible for ESI?

Under the ESI scheme, the following persons are eligible for benefits:
Employees earn up to Rs. 21,000 per month.
Employees engaged in factories and establishments employing 10 or more persons.
Employees working in non-seasonal factories and establishments, shops, hotels, cinemas, road transport undertakings, educational and medical institutions, newspaper establishments, and also under the Indian government and certain state government organizations.


  • Shubham Mittal

    Shubham Mittal is a renowned current affairs writer and expert in government exam preparation, inspiring readers with insightful articles and guiding aspirants with his expertise.

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