The Hindu : Front Page : Compensation planned for retrenched workers

Online edition of India's National Newspaper
Friday, Jan 14, 2005

Front Page

Front Page

Compensation planned for retrenched workers

By Aarti Dhar

NEW DELHI, JAN. 13. The Union Labour Ministry proposes to introduce a novel plan of providing compensation to workers who lose employment due to the closure of industry or face retrenchment owing to the liberalisation and privatisation policy. The social security plan will be applicable to employees covered under the Employees State Insurance Corporation (ESIC) scheme and the compensation limited to six months.

Highly-placed Ministry sources told The Hindu that an affected worker would be entitled to a compensation of 50 per cent of the last drawn pay.

The scheme allows the withdrawal of compensation at intervals in case the unemployed worker found suitable employment and lost the job once again due to distress in the industry. The Ministry will spend an accumulation of Rs. 10,000 crores lying with the ESIC for the scheme. The unutilised money has come from employees who have moved out of the scheme over the years. The ESIC gets an interest of Rs. 500 crores annually on the money and an equal amount is added to the fund every year. The Ministry has decided to use the money for the welfare of workers. Besides, there are plans to use a portion of the fund to give grant/loans to ESIC subscribers for housing, purchase of land, children's education or fulfilling other social obligations.

Now, 71 lakh workers, with a monthly income up to Rs. 7,500, are covered under the ESI scheme and the Ministry proposes to widen its coverage by raising the salary limit to Rs 10,000. In addition, it will bring in all the 1,646 municipalities under the scheme.

Super-speciality hospitals

The ESIC will start four super-speciality hospitals in four major cities. The first one will be started in Hyderabad followed by one each in Kolkata, Mumbai and Delhi.

It is planned to increase the subscribers' contribution to the Beedi-Workers Welfare Cess from Rs. 2 to Rs. 4 for 1,000 beedis. This would double the Government's annual collection from Rs. 100 crores to Rs. 200 crores. The money will be used to give a one-time grant to beedi-workers to construct a house or buy land — the Government will give a grant of Rs. 40,000 and the worker's contribution will be Rs 5,000.

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