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| Commercialisation or governance in social security sector | | |
Certain observations
were made by the
Finance Minister in his budget speech on 28 February 2015 regarding two premier social security schemes of the country, namely Employees' State Insurance Scheme (ESI) and Employees' Provident Fund Scheme (EPF). He observed that these schemes had 'hostages' rather than clients. In Paragraph 62 he intended to provide alternative options to the employees served by these schemes in the form of health insurance through commercial insurance providers approved by Insurance Regulatory and Development Authority (IRDA) and provident fund and pension scheme through new pension schemes. Employees of these organisations are obviously anxious on several counts, including fear of loss of their jobs, though such anxieties may not be well founded. But now brainstorming among the employees in these organisations is going on about the formulations to translate these intentions of the government into reality and what if scenario post placement of alternatives in place. The fruit of such labour would take time to appear on the horizon and can be critically examined only after that. However the situation that might have led the Finance Minister to such propositions can be roughly gathered from certain indicators provided by these organisations.
But before that there is a pertinent question about the governance of these schemes. These schemes are statutory and managed and controlled by the government through its representations in the apex Corporation (Board) and Standing Committee (Governing Body) of ESI Scheme and Board of Trustee of EPF Scheme. In fact the Union Labour Minister is the chairman in both the apex bodies of both the schemes. Besides the Chief Executive Officers (CEO) of these schemes are also appointed by the government, as per provisions of the respective statutes. So as a matter of corollary the standard of success or failure of these schemes will reflect the standard or otherwise of the government of the day. Of course, the present government at the centre is very new and hence the status obtaining till quite some time qua these schemes cannot be attributed to it.
Now, two factors being touted as primary reasons for putting alternative or option in place are undistributed EPF of Rs. 27000 crores and accumulated ESI general reserve of around Rs.30000 crores. No one would disagree that such accumulations should not have happened. But it happened, is the reality. Then the questions would be why these accumulated and who are responsible? The answer to first part would be simple non distribution of employees' money by EPF due to faulty identification mechanism and other factors. In case of EPF it might be due to few improtant factors, chief of these being lack of portability on migration of employees, insufficiency of computerized database and mechanism for tracking, etc. In case of ESI Scheme there are different issues. Some of these have been long been reiterated such as non-improvement of basic infrastructure such as ESI Dispensaries and Hospitals and other administrative offices. In fact of the around 1450 dispensaries and 150 hospitals of ESI Scheme, large number are in conditions requiring urgent improvements and modernisation with basic facilities for convenience and comfort of the visiting beneficiaries. Other reasons are lower spend or reimbursement on medical care by limiting the entitlements, restricting the eligibility of beneficiaries based on larger tenures of service for employee and family members to prevent 'misuse', etc. When the answer for persons responsible is searched, it will point out in larger proportion to the apex body or personnel. In fact, in case of ESI Scheme there is state level governance mechanism where its Regional Board considers the issues within its areas, including the infrastructure and other improvement areas, and makes recommendations to the apex body or officer for implementation. In reality, this too is not happening in letter and spirit adding to accumulations as several projects considered and recommended by Regional Boards lie in limbo for years together or not considered at all, and lost.
If the intention of the government be to get these accumulations spent where these ought to be, then the government can direct EPF to give search notices to trace the beneficiaries whose money is to be refunded and ESI to take up a planned programme to improve the existing infrastructure to desired modern standard, to put the recommended ones in place within a time frame, and to remove all those ceilings and curtailments on the spend on and reimbursements to insured employees and beneficiaries strictly in accordance with the statute. The novel method of the Prime Minister to monitor the individual performance of all the departments through the Secretaries and Chief Secretaries through newly placed computerized platform and video conference can be put to salutary effect in this direction, perfectly in line with his catch sentence 'minimum government maximum governance'. The accumulations thus can be diminished to marginal required level.
The service by the government institution is a sense guaranteed through the statutes, though the standard can be considered for examination. But in commercial sector, what the sector would itself like to be guaranteed is the profit. Standard can be put examination there too. It is not always the panacea for ills, if any, of the government sectors. While interacting with a relation who was under cover of ESI Scheme till sometime back but now out of its coverage due to salary hike, he informed that his company was going to give him and his family of four members a health insurance coverage of Rs.2 lakhs per year for a monthly charge of Rs.400. That too has not yet been put in place. Hear, in the ESI Scheme a family of six members including the dependant parents of the covered employees getting, for example, the maximum ceiling salary of Rs.15000, he would pay only 1.75% of it, that is Rs.262.50 per month. Of course another 4.75% of it, that is Rs. 712.5 being contributed by the employer. But in the statute, there is no upper ceiling of the health benefit for any or all the members covered in the ESI Scheme. But then it provides other beneficial cash compensations during the sickness, maternity and in case of employment injuries, besides full and unlimited medical treatment facilities required during these conditions and also pension to the dependant family members in case of death of the covered employees due to the employment injuries or even while commuting to and from the workplace! There has been instance reported where in the ESI Scheme a whopping Rs.17 crore has been spent on treatment of a family member of a covered employees. And there are many individual instances of expenditures ranging between Rs. 5 lacs to 15 lacs made on the beneficiaries for cardiac interventions and surgeries, renal and liver transplants, neurosurgery, etc through the aforesaid dispensaries and hospitals as well as around 700 private corporate hospitals in tie-up under the ESI Scheme. All such conditions will be either eliminated from the commercial health insurance option or it will exact huge unaffordable cost on the employees opting for it. In contain cases, the coverage may altogether be refused. Health of the nationals being one of the main concerns of any government anywhere in the world, should a component of it like the facilities in ESI Scheme not be retained by the government? It is no secret that there is inadequate health infrastructure facilities in the government sector and there is need to put more in place. In that view, these vast infrastructure under ESI Scheme can be opened up to general public in critical areas like preventive programmes, primary first care or pay and use by public on no profit no loss basis where general public can get the medical services at very reasonable cost to cost basis, particularly the poorer among the populace, which services by any rate are becoming unaffordable in private commercial health sectors.
There are other ways to properly put the surplus money to good use. The statute also provides for suitable variation of the rate of contributions of the employee and employer in case noticeably large accumulations might be taking place.
However, in the present scenario that does not appear to be the case as the larger part of annual revenue of around Rs.11000 crores generated in the ESI Scheme can be gainfully deployed and ploughed back for the beneficiary base of 9.5 crores for employee base of about 1.9 crores. The employee base is also low of around 4% of the workers in the country. Hence in fact, there is need to bring more workers under the social security coverage of ESI Scheme instead of reducing the same by hiving off this mere portion for commercial sector health insurance.
These are points that need to be gone into, for similar public welfare considerations the governments in the past nationalized the banks and insurance sectors and retained its share therein even after entry of private sectors.
Hence there is a case for expanding the net of social security for workers in the organised sectors. There is a case for governance in these social security sectors like ESI and EPF. Probably not a case for this sovereign function to be handed over to the commercial sectors; time does not seem to be ripe for that. Yes, there could be no two opinions to reach the accumulated EPF money to the right owners and to spend such funds of ESI on improvements through governance. Some such improvements can be upgrading of all the aforesaid infrastructure of ESI to defined modern standard and requirement, removing the ceilings and hurdles for the beneficiaries put from time to time which might not been meeting the statute, putting best and adequate general and technical manpower in place to provide the services ordained by the statute, reaching out to newer areas having a threshold and demanded by Regional ESI Boards of the states and so on.
Arvind Kumar,
Regional Director, ESI Corporation, Jammu
(The views in the article are personal views of the author) |
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