Government reduces ESI rate to 4% from 6.5%

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Government has reduced rate of contribution for medical care under the ESI (Employees’ State Insurance) Act to 4% from 6.5%. Reduction in contribution will benefit all the employees and employers covered under ESI Scheme.

The reduction will bring relief to workers, encourage more to join formal sector, besides making establishments more viable. The reduced rates will come into effect from July 1. The first revision in ESI rates since 1997, however, has faced criticism from Left-backed trade unions. The Income limit for availing medical benefit for the dependent parents of an Insured Person covered under ESI Scheme has been enhanced from the existing Rs.5000/- per month from all sources to Rs.9000/- per month.