Struggle for Benefits of E.P.F, E.P.S, E.S.I.S is A Struggle Against the Neoliberal Economic Regime!

 

 

The new economic regime, unleashed in the 1990s through liberalisation, privatisation and globalisation, brought in an era where the economy was increasingly driven by the market. This also applies to the labour market, since these policies deregulate all markets. As a result, we now have a pro-capital and anti-labour economic regime, where the policy is to allow the market to govern labour and its rights, in favour of capital. Indian labour has a long history of struggles, which have resulted in some level of structural protections in the form of enshrined rights. These structures cannot simply be wished away. Hence the new economic regime has been slowly but surely chipping away these protective structures, dismantling labour rights and workers’ welfare institutions in the process. This process of chipping away have taken place in stages. During the Vajpayee regime, we saw the dismantling of the Old Pension Scheme, and now in the Modi regime, we are seeing multiple assaults on institutional protections of workers’ rights. The new labour codes are the latest such assaults in a long line of similar attacks.

The four new labour codes, for instance, do away with penalties (of imprisonment and fines) for non-compliance of regulations by employers. The government machinery, which has never been serious in trying to enforce regulations to defend workers’ rights, now will not even have to pretend to do so. Bureaucracy has always been markedly disinterested in this regard and moreover over the years, trade unions too had not been successful in enforcing penalties for non-compliance but for some sporadic attempts. And now, these penalties, which were only notional, are officially being done away with to boost the morale of the industrialists. Rather, penalties are being introduced to scare away workers and their organisations. Similarly, through the new ‘Code on Social Securities’, which is supposed to address social welfare policies related to workers, the government has, in principle, relieved industry from the responsibility of providing social welfare schemes while maintaining some reduced share of the industry in such schemes, perhaps for a short period. Even such penalties for violations are withdrawn but for giving some friendly advise and preaching. Now, the penalties are not for non-compliance of welfare measures, but are limited to acts of furnishing false documents and the like.

Over the years, the Government created huge corpuses under the Provident Fund Act and the Employee’s State Insurance Act. These corpuses are now being invested in the share market, under the pretext of earning greater returns. The money invested in the share market is without a counter guarantee from the government and may get wiped out as well. The investment of the EPS fund is to the tune of a whopping 45% of the total corpus. We do not have data to tell us where the investments are happening. Are the investments  catering to the interests of the beneficiaries? Or are they bolstering the fortunes of select corporations? What we do know is that these investments in the share market have not resulted in providing much needed relief to the beneficiaries.

The trajectory of the ESIC is a case in point. ESIC works as a comprehensive health cover scheme. Governments have been working towards increasing the number of people covered under ESIC. This has resulted in substantial collections. On the other hand, the contribution from workers’ salary and employer’s contributions have been reduced. Moreover, many sections of workers have been kept out of the scheme. In addition, the facilities available under the ESIC scheme are far from satisfactory. ESIC operates through State Governments. At a time when governments often appear to be shirking from their responsibilities, the ESIC faces significant challenges.

The ESIC hospitals are small in number and provide inadequate coverage.  Some have been converted into speciality hospitals, while the vast network of hospitals have very few facilities. In many cases, ESIC is turning into suppliers of patients to corporate hospitals at the cost of workers money, instead of strengthening its own network of hospitals to provide a cheaper treatment. The authorities are ever willing to spend on building works and infrastructure even as they are loathe to invest in better, well-maintained state-of-the-art equipments. The paucity of staff affects the service and many posts remain vacant. The ESIS OPDs are close to old industrial areas, and newer industrial areas where workers line in greater numbers do not have adequate number of OPDs. The work is outsourced to private doctors, agencies and hospitals. The payments are caught up in red tape and new entrants are not willing to take up the responsibilities of providing OPD facilities. “Diagnostics” and “in-patient” treatment in private hospitals are also often not satisfactory. Payments through ESIC do not happen smoothly, even though the ESIC scheme is supposed to provide cashless medical treatment. The nominated private hospitals refuse to provide cashless diagnostic and in-patient service. Moreover, contract workers suffer even more. Fake attendance records are created, in some cases, to reduce the contribution of contract workers. It saves money of the contractor but the worker and his family are refused treatment on basis of inadequate contribution. All these factors work towards workers families not getting adequate and satisfactory medical care.

The EPF scheme is similarly seeing a dilution. This scheme provides for retirement benefits and protects the family to some extent from such events as death during service period or accidents and physical impairments. The EPF scheme involves a contribution of 12% of salary by workers themselves and a matching contribution by the employer. The worker’s contribution is based on salary; however, the employer is given the facility of paying contribution on the basis 12% of certain ceiling, presently Rs. 15000 per month. While the total money collected is substantial, the beneficiary is at loss due to depleting value of money due to inflation. Returns on the money is also dropping due to dropping interest rates in market. The rate of returns on workers money should have been constant, given that EPF is a welfare scheme. However, workers have had to wage a relentless battle to prevent the government from reducing the rate of returns (which is currently under 8.1%, from the initial 12%).

The pension schemes for workers have also, of course, seen a systematic dilution. To begin with, the Old Pension Scheme was scrapped and replaced with a new one which drastically reduced guarantees and benefits for workers. The new pension fund has been turned into a contributory scheme while the basic concept of Old pension scheme was a beneficiary one. The pension fund corpus is formed by deducting 8.33% of salary as employer’s contribution and 1.67% from the government. Dearness allowance (DA) was also not protected under the new scheme. Since then, the workers’ movement has been waging several struggles to demand a minimum monthly pension of Rs 6500 as well as dearness allowance. As the result of this pressure, the BJP too has had to announce that it supports a minimum monthly pension of Rs 3000 and DA. This was subsequently accepted by the Pension Committee of the central government. However, the BJP backtracked on its promise to implement these recommendations within 90 days of coming to power in 2014. The Modi government, instead, announced that it would guarantee only a monthly pension amount of Rs 1000. Along with this, other changes were also announced (including a pro-rata calculation of pension). This anti-worker policy was successfully challenged in the Kerala High Court. Now the Union of India itself has challenged the decision in the Supreme Court. The struggle of EPF, EPS and ESIS is a struggle against loot and cheating by central government as part of new economic regime unleashed in the 1990s. What we are seeing is more extraction of money, hollow promises and dwindling returns for workers while offering the entire corpus and assistance, to corporate capital, to reduce their share to begin with and to gradually withdraw from the responsibility of social security for workers. The social security for workers is being turned into security for corporate capital.