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Business News/ Politics / Policy/  ESIC board move to open, run medical colleges a big mistake: Narendra Singh Tomar
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ESIC board move to open, run medical colleges a big mistake: Narendra Singh Tomar

Labour minister says the NDA govt will review the scheme brought in by the previous the UPA government

Labour minister Narendra Singh Tomar. Photo: MintPremium
Labour minister Narendra Singh Tomar. Photo: Mint

New Delhi: The National Democratic Alliance (NDA) government on Thursday decided to stop a scheme of the previous government that allowed the Employee State Insurance Corporation (ESIC) to open and run medical colleges.

Calling the ESIC board’s decision to open medical colleges in 2008-09 a “big mistake", labour and employment minister Narendra Singh Tomar said he will review the scheme.

“The decision to open medical colleges by ESIC was a huge mistake and we will rectify it," Tomar told reporters after a meeting of the ESIC board comprising representatives of workers, industry and government.

“We decided that from now on any plan of ESIC board will revolve around insured persons. Else, it will not be discussed at all," Tomar said. He said his ministry would discuss with state governments and the health ministry on how the already operational medical colleges are run smoothly.

ESIC will not move forward on proposals to open nine medical colleges that would have required an initial outlay of 600- 900 crore each, and four medical colleges already functional will be given special attention with help from the states and the health ministry to improve service delivery, officials at the corporation said on condition of anonymity.

Most of these medical colleges are facing a shortage of workforce in terms of both doctors and paramedics to the tune of 40%.

“Medical education is not our core competency, and we would prefer to focus on our primary job—providing medical care services to industrial workers," said S.K. Rahate, finance commissioner, ESIC. “We have learnt from experience over the last five years."

“These are high cost projects causing a significant outflow of funds on both capital as well as revenue accounts. This will in near future cause the ESIC expenditure to be more than its revenue income," said an internal note based on an ESIC sub-committee report. Mint has seen a copy of the note.

It said the ESI system will require medical personnel immediately or within the next few years, but its medical colleges can give them doctors only after 2020. Also, the qualified personnel are not willing to shift to remote locations.

“...these medical colleges under the ministry of health and family welfare would definitely provide much larger benefits," it said.

Tomar also said on Thursday that it (health ministry) has hiked the compensation to state-run hospitals that help ESIC in providing healthcare to industrial workers from 1,500 per insured person to 3,000 per person per year.

He said ESIC will tie up with the health ministry-run primary health centres to provide medical facility to insured prople where there is no ESI hospital or dispensary.

ESIC has more than 15 million insured people. There are 36 hospitals under ESIC and 115 hospitals under states helping ESIC in medical service delivery. Every month, eligible staff contribute 1.75% of their salary and employers contribute 4.75% to the ESI corpus.

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Published: 01 Aug 2014, 12:27 AM IST
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