Emphasizing that Employees' State Insurance Corporation (ESIC) has enough corpus, Union Minister Santosh Kumar Gangwar Monday said the reduction in contribution rates towards employees' state insurance scheme will not impact benefits of insured persons. During the Question Hour, Gangwar said the ESIC has enough money and its corpus is Rs 75,000 crore.
The rate of ESI contribution has been reduced to 4 percent from 6.5 percent. The contribution of employer is now 3.25 percent of wages payable to the employee and that of an employee is 0.75 percent. The revised rates came into effect from July 1. The Minister of State for Labour and Employment said the move would help in reducing the burden on employees and employers, improve the coverage as well as compliance of ESI scheme and also contribute towards ease of doing business.
"... because of this reduction in rate of contribution, the employee covered under the ESI Act, will have to pay 0.75 per cent amount of his/her total wages instead of 1.75 per cent being paid earlier leading to enhanced disposable income in the hands of employees," Gangwar said. He said insured persons and their family members will continue to get all benefits prevailing as on date.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)