ESIC: A New Law Underneath an Old Institution

For 77 years, one law defined this institution. In November 2025, that law was repealed. The Employees’ State Insurance Corporation survived. Only its legal foundation changed underneath it.

Origins and Key Milestones

ESIC traces back to a report, not a law. In December 1944, Prof. B.P. Adarkar submitted his report on health insurance for industrial workers. It became the scheme’s founding blueprint.

The Employees’ State Insurance Act came into force on 19 April 1948. The scheme itself launched later, on 24 February 1952, in Kanpur and Delhi. Prime Minister Nehru inaugurated it, and became its first insured person. That date is now marked every year as ESIC Foundation Day.

What ESIC Does

ESIC provides medical care and cash benefits to organised-sector workers and their families. This covers sickness, maternity, disablement, and death due to employment injury.

ESIC operates under the Ministry of Labour and Employment. Employer and employee contributions fund it. The combined rate is 4% of wages: 3.25% from the employer and 0.75% from the employee. That rate has stayed unchanged since a July 2019 revision.

A New Legal Basis

On 21 November 2025, the 1948 Act was repealed. The Code on Social Security, 2020 took its place, re-constituting ESIC under its own Section 5.

The Corporation and its scheme kept functioning without interruption. Only their legal basis changed. Repealing the 1948 Act did not erase rights or liabilities created under it, either. Section 164(3) of the new Code invokes Section 6 of the General Clauses Act, 1897, so past actions taken under the old Act remain valid.

Structure and Legal Continuity

A Director-General heads the Corporation. It also has a Centrally appointed Chairman, a Vice-Chairman, and up to five nominated members. ESIC operates through five administrative Zones nationwide. Each Zone has a Zonal Medical Commissioner and a Zonal Insurance Commissioner. Dr. C.L. Katial served as ESIC’s first Director-General.

The current wage ceiling for coverage is ₹21,000 per month, or ₹25,000 for persons with disabilities. It has stayed unchanged since 1 January 2017, despite repeated proposals to raise it to ₹25,000-30,000.

ESIC vs EPFO

ESIC and EPFO are frequently confused. Both are worker social-security bodies under the same Ministry of Labour and Employment. Both now sit under the Code on Social Security, 2020, rather than only their original standalone Acts. See EPFO.

• Different Purposes ESIC provides medical and sickness-related benefits. EPFO manages retirement savings and pensions.
• Date Trap A common trap swaps the ESI Act’s 1948 commencement date with the scheme’s later 1952 launch date. The Act took effect in 1948, but Foundation Day marks the 1952 launch.

Current Affairs

• 21 Nov 2025 The four Labour Codes took effect, consolidating 29 central labour laws, and repealing the standalone ESI Act, 1948.
• 27 Jul 2026 Under the SPREE 2025 scheme (July 2025-January 2026), over 1.38 lakh new employers registered and more than 1.12 lakh new employees joined, without fear of retrospective penalties for earlier missed coverage.
• 30 Jun 2026 ESIC’s 198th meeting approved several steps. These include direct management of all upcoming ESI hospitals, a new medical college at Haridwar, and a Cancer Care facility at Kolkata. It also extended the Atal Beemit Vyakti Kalyan Yojana by one year, to 30 June 2027.
• 18 Sep 2026 ESIC signed an MoU with JIPMER, Puducherry. Beneficiaries now get cashless outpatient, inpatient, diagnostic, and emergency care there.