Home / Politics / Policy /  Govt scraps planned Rs25 lakh bond for ESIC medical students

The labour ministry has rejected a plan to mandate a 25 lakh bond on students enrolling in medical colleges run by the Employees’ State Insurance Corporation (ESIC), fearing the move could have been seen as anti-people.

ESIC, which operates under the labour ministry, provides healthcare to over 20 million industrial workers and their families through a chain of clinics and hospitals. It runs five medical colleges, which teach more than 500 students a year. Seven more are in the pipeline.

The planned 25 lakh bond for its medical students was to deter them from joining the private sector after graduation at a time when ESIC’s hospitals are facing a 30% shortage of doctors.

“We have given up the 25 lakh bond plan," said ESIC director general Deepak Kumar.

ESIC’s board, headed by Union labour minister Bandaru Dattatreya, recently disapproved of the plan, according to R.K. Kataria, medical commissioner of ESIC. He said medical students at ESIC colleges do not pay even 10% of the money the government spends on them. The bond plan was to ensure that such students, after their highly subsidized education, serve ESIC hospitals. An MBBS student at an ESIC medical college pays 24,000 as annual tuition fee.

In the past four years, the labour ministry has invested over 12,000 crore in its medical college project, aiming to draw doctors from its own colleges who would help run an end-to-end medical service for people insured with the ESIC. But earlier this year, it decided not to open any new medical colleges other than the 12 in operation or under construction as the labour ministry does not have a core competency in health education.

ESIC has nearly 20 million insured people and benefits more than 76 million people, including family members. Every month, eligible industrial workers contribute 1.75% of their salary and employers contribute 4.75% to the employees’ state insurance corpus. ESIC provides health services—from outpatient services to tertiary care—through its own hospitals or empanelled ones.

ESIC has a network of 151 hospitals, 36 of which are run by the corporation. Of 1,908 sanctioned posts for doctors in ESIC hospitals, at least 567 are vacant, labour ministry data show. Besides, there are vacancies for 382 specialists, accounting for over 46% of the sanctioned strength.

The shortage may increase as the ministry is planning to convert 54 dispensaries into small hospitals in 2016.

Instead of the bond plan, Kataria said, ESIC will now offer students a 100% placement as soon as they complete the courses. “In 2016-17, we will absorb the 100 doctors graduating from our medical colleges, and by 2019-20, we will absorb 500 of them," Kataria said. “It’s a 100% placement for our own students in our hospitals."

Since ESIC has spent thousands of crores on medical colleges, it is unfair for students who get subsidized education and then join the private sector, a labour ministry official said. “So, the 25 lakh bond plan was mooted, but in the current political environment, such a move has been put on the back-burner," the official said, requesting anonymity.

The ministry has been accused of backing “pro-industry anti-people reforms". Congress party vice-president Rahul Gandhi on 5 December accused it of deliberately weakening labour laws. “If you look at the new laws being made in Gujarat, Rajasthan and Haryana, you will see that (Prime Minister) Modi has started a big assault on workers," he said while addressing a labour union conference.

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