Modi government reduces ESI contribution for employer and employees
The first general budget of the second term of the Modi government will be on July 5. Before this, many decisions are being taken by the government, which will be given to the common people directly. Recently the government started the pension scheme for nearly 10 crore workers unorganized sector. Now, a change in the Employees State Insurance Corporation (ESI) scheme has given a huge gift to more than 3 lakh employees.
The Central Government has reduced the total contribution of the employer (institution or company) and employees to the health insurance program of Employees State Insurance Corporation (ESI) from 6.5 percent to 4 percent. After the new announcement of the government, the contribution of the employer to the company will be 3.25%. Earlier, the employer had to contribute 4.75 per cent.
This means that the ESI Health Insurance employer or company has to contribute 1.5 per cent less than earlier. Similarly, the decision to reduce employee contribution from 1.75 per cent to 0.75 per cent has been decided.
The employee will have to contribute less than one per cent less to ESI health insurance than before. This decision of the government will save 12.85 lakh employers or companies to save Rs 5,000 crore every year.
Similarly, 3.6 million employees are expected to get direct benefits. The reduced rates of government will come down from July 1 this year. Under the Employees State Insurance Act, 1948 (ESI Law), the benefits of medical, cash, maternity, disability and dependence are available.
ESI employee is administered by State Insurance Corporation (ESIC). Benefits made available under ESI law are funded through contributions made by employers and employees.
The government has started the program of special registration of employers and employees from December, 2016 to June 2017 to give more social security coverage to more people and decided to increase the tax benefits of the scheme to all the districts of the country at different stages. The salary limit in coverage was increased from 15,000 rupees per month on 1.1.2017 to 21,000 rupees per month.
