Annual Review of ESIC

Source: Business Standard
GS II: Statutory, regulatory and various quasi-judicial bodies

Overview

1. News in Brief
2. About the Parliamentary Committee

Why in the News?

The Parliamentary Standing Committee on Labour has told the Employees’ State Insurance Corporation (ESIC) to review its investment policy annually without fail.

News in Brief

• This comes as interest received by the social security body from government bonds has seen a decline in the past few years.
• The committee noted that the interest received on government securities, which includes government bonds and state developmental loans, declined to 4,711 crore in 2021-22 from 5,115 crore in 2020- 21.
• Similarly, the interest received on bank fixed deposits and special deposit accounts (SDA), declined to 1,290 crore in 2021-22 from  4,075.48 crore in 2019-20.
• It includes fixed deposits (FD) of scheduled commercial banks and AAA-rated public sector undertakings (PSUs) bonds.

Total Investment and corpus fund

• Up to February 2023, the ESIC’s total investment amount has increased by about twofold over the previous six years, from around 60,000 in March 2017 to nearly 1.33 trillion.
• ESIC had allocated nearly 84,118 crores (or 74% of its total investment) to government securities (Gsec, state development loans, government guaranteed and government serviced bonds), 23,401 crores (or 21% of its total investment) to ‘AAA-rated’ PSU bonds, and roughly 6,330 crores (or 5% of its total investment) to short-term debt instruments.
• The ESI corpus is financed by payments totalling 4% of the income of employees making up to 21,000 per month, with employers contributing 3.25 % of the salary and the remaining amount withdrawn from employees’ pay.
• The ESI program has 31 million insured people and about 120 million beneficiaries as of 2021–2022.

About the Parliamentary Committee

• A group of MPs known as a Parliamentary Committee is one that is either appointed, elected, or suggested by the Speaker or Chair of the House.
• The committee operates under the chairmanship of the Speaker and submits its findings to the Speaker or to the House.
• The British Parliament is where the concept of a parliamentary committee first emerged.
• Parliamentary committees are of two kinds
  • Standing Committees
    • The Standing Committees are permanent and work on a continuous basis.
  • Ad Hoc Committees
    • Committees are temporary and cease to exist on completion of the task assigned to them.
• Chairperson
  • Each committee has a chairperson who is a senior MP selected by the Speaker of the Lok Sabha or the Chairman of the Rajya Sabha.
  • The chairperson is typically from the ruling party or coalition in the Lok Sabha.
• Confidentiality
  • The proceedings of these committees are usually confidential.
  • This allows members to have frank discussions and evaluate issues without political pressure or public scrutiny.

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