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Unit 4: The Employees’ State Insurance Act, 1948: Definitions, Scope and Objective

Tamil nadu and to Private Medical Institutions in the State of West Bengal, Rajasthan, Bihar, Notes
Kerala, Himachal Pradesh, Uttarakhand, Andhra Pradesh, Punjab, Assam, UT Chandigarh,
Jharkhand and Orissa. As of now, employees of factories/establishments mentioned above in
the implemented areas and drawing wages (excluding overtime) not exceeding 15, 000/- per
month are covered under the Act.
Self Assessment

State whether the following statements are true or false:
7. The Act applies in the first instance to all factories using power and employing 20 or more
persons on wages.
8. The monthly wage limit for coverage under the ESI Act would be such as prescribed by the
Central Government in the ESI [central] rules, 1960.

9. The Act applies, in the first instance, to, non-seasonal factories employing 10 or more
persons.

4.4 The Role of ESI Corporation

Section 3 of this Act provides for the establishment of Employees’ State Insurance Corporation
by the Central Government for administration of the Employees’ State Insurance Scheme in
accordance with the provisions of Act. Such Corporation shall be body corporate having perpetual
succession and a common seal and shall sue and be sued by the said name.

Constitution

The Central Government appoints a chairman, a vice-chairman and other members representing
interests of employers, employees, State Governments/union territories and medical profession.
Three members of the Parliament and the Director General of the Corporation are its ex-officio
members. [Section 4]

Powers and Duties of the Corporation

Section 19 empowers the corporation, to promote (in addition to the scheme of benefits specified
in the Act), measures for the improvement of the health and welfare of insured persons and for
the rehabilitation and reemployment of insured persons who have been disabled or injured and
incur in respect of such measures expenditure from the funds of the corporation within such
limits as may be prescribed by the Central Government.

Notes Section 29 empowers the corporation (a) to acquire and hold property both movable
and immovable, sell or otherwise transfer the said property; (b) it can invest and reinvest
any moneys which are not immediately required for expenses and or realise such
investments; (c) it can raise loans and discharge such loans with the previous sanction of
Central Government; (d) it may constitute for the benefit of its staff or any class of them
such provident or other benefit fund as it may think fit.

However, the powers under Section 29 can be exercised subject to such conditions as may be
prescribed by the Central Government.

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