Indian Staffing Federation opposes the Government’s move on raising the salary cap to avail

DELHI/NCR, India - Sept. 25, 2013 - PRLog -- The Indian Staffing Federation (ISF), an apex body of flexi staffing industry in India, set up by leading staffing companies in India, today strongly disagreed with the Indian Labour Ministry’s decision to raise the salary cap of ESIC beneficiaries to Rs. 25,000 from the current Rs. 15,000.

As of 2012 ESIC is sitting on a corpus which is in excess of half the contribution of Rs 7070 crores. That amounts to substantial fund to address the plaguing issues around inadequate doctors, poor diagnostic services and non-availability of common drugs.  It is more critical to address the absolutely lack of faith in the institution of ESIC amongst the very people that the authorities are presumably trying to protect.

An employee with gross salary of Rs 25000works upto a Cost to Company Salary of approximately Rs 28000. This single move shall lead to an additional burden of Rs 1200 for employers for every employee with Gross Salary of Rs 25000 and decrease the net pay of the employee by Rs 450. Given the uncertainty all around, which is affecting industries, this single move is yet another step discouraging job creation and encouraging available work to be shifted to the informal sector.

These are the expected outcomes of this move:

1.     More jobs would move to the informal sector. So far informality was largely at the grass root level. This move actually shall be an impetus for informality to creep in at a higher level as well.

2.     Affect Net pay of employees causing widespread dissatisfaction and possibly causing unrest. Especially amongst those who since they have entered the job market have never experienced any deduction around ESIC.

3.     Added financial burden on industries who are in anycase struggling with the widespread uncertainty

4.     Further increase to the unutilised ESIC corpus at the ESIC end

5.     Little accountability taken by ESIC authorities towards improving the state of existing ESIC infrastructure, doctors and availability of proper care and medicines.

It’s a patronising and delusionary step which really doesn’t attempt to putting any accountability within ESIC to benefit the sector of employees who doesn’t have access to proper healthcare nor can afford it. ISF acknowledges wholeheartedly that ESIC is one of a kind healthcare scheme in today’s world, however, ISF would like urge the ESIC authorities to take on greater accountability in making the scheme actually beneficial for all those they are attempting to protect by way of ease of access to basic healthcare facilities as and when they require completely doing away with their need to visit any other Private or Government Hospital or giving them the flexibility to choose the kind of healthcare they want for themselves.