New Delhi, March 2 (KNN) Union Budget 2015-16 signalled breaking of monopoly of two social security giants the  Employees' Provident Fund (EPF) Organisation and  Employees' State Insurance Corporation a move likely to be hailed by millions of workers especially in small factories.  

Alluding to highly deficient services of the two organizations,  while presenting the budget Finance Minister Arun Jaitley remarked “both EPF and ESI have hostages, rather than clients”. 

He indicated bringing in required amendments to allow options to employees to either opt for EPF or New Pension Scheme. Further, the employees below a certain threshold of monthly income, contribution to EPF may be made optional, without affecting or reducing the employer’s contribution.  

Similarly, with respect to ESI, the employee would be given an option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA).

The national MSME body, Federation of Indian Micro and Small and Medium Enterprises (FISME) welcomed the move.   

According to FISME spokesman, while the minimum social security related costs to employers per worker has risen to almost 30% of basic wages, the welfare measures are of such poor quality and riddled with such cumbersome procedures that most workers do not avail their services in spite of having spent so much of their hard earned money and prefer to rely on private medical aid when in need.

More importantly, what makes the existing social security mechanism really superfluous is that in spite of excessive contribution the intended benefits do not reach to most workers. They find ESI hospitals dysfunctional and have to rely on private medical aid when in need.

The move is to bring in competition and may force the two social security behemoths the ESI and the EPFO shed their inertia.   (KNN/AB)