Labour ministry to soon relax eligibility conditions for those awaiting unemployment benefits

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The labour ministry will soon move a proposal to significantly relax the eligibility criteria for availing unemployment benefits under the Employees’ State Insurance Corporation scheme besides enhancing the quantum of benefits to 50% of last drawn wages and double the support period to six months.

It will also propose to do away with the condition that the benefit can be availed only once in a lifetime and enhance the tenure of benefit.

The proposal, which will be presented before the corporation meeting on August 20, can benefit over 32 million ESIC subscribers should they become unemployed.

Top sources told ET that the idea has the backing of the Prime Minister’s Office, which had been insisting on some tweaking in the existing provisions to benefit a large number of people in the event of job losses, much on the lines of unemployment allowance in other countries.

“The proposal has been presented to the PMO last week and will now be tabled in the corporation meeting next week,” one of the officials said on the condition of anonymity.

The government is seized of the fact that millions of workers in the MSME sector would have lost their jobs because of nationwide lockdown during the pandemic.

The Centre for Monitoring Indian Economy had estimated 121 million workers had lost jobs in April, which was the first full month of lockdown. However, recovery started in May and, by end of June, 91 million jobs were recovered with majority in the month of June, which was the first month of unlocking.

The plan is to double the insured amount to 50% of the last drawn salary, extend the tenure of benefit from three months to six months, reduce the minimum work requirement of two years to 78 days and allow multiple withdrawals under the scheme subject to certain conditions.

Under the Atal Beema Vyakti Kalyan Yojana of ESIC, the government provides 25% of the monthly salary as unemployment benefit for three months.

However, this could benefit only those subscribers who have been an ESIC subscriber for at least two years.

The unemployment benefit can be availed only once in the lifetime work period by the ESIC subscribers.

The ESI, which is under the labour ministry, is a self-financing health insurance scheme for formal sector workers in India and is managed by the Employees State Insurance Corporation (ESIC).

It applies to all factories and establishments employing at least 10 workers. ESIC currently has 31.9 million subscribers and a corpus of Rs 91,444. 07 crore, out of which Rs 23,151.77 crore is earmarked as reserve fund.

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Tagged economy, eligibility, Employees’ State Insurance Corporation, Labour Ministry, MSME, pmo, unemployment

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