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Welcome to the presentation on Amendment 2010 regarding ESIC Medical Colleges. Amendment of Sec. 59 of the ESI Act, 1948 by adding Sec. 59-B. What happened and how. ‘The public is entitled to know on what evidence the decision is based .’ – M.C. Chagla . . The Bill 2009.

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    1. Welcome to the presentation onAmendment 2010 regarding ESIC Medical Colleges

    2. Amendment of Sec. 59 of the ESI Act, 1948 by adding Sec. 59-B. What happened and how.

    3. ‘The public is entitled to know on what evidence the decision is based.’ – M.C. Chagla.

    4. The Bill 2009 The Clause 15 of the ESI (Amendment) Bill, 2009 as introduced in the LokSabha is reproduced below: “15. After section 59A of the principal Act, the following section shall be inserted, namely:— "59B. The Corporation may establish medical colleges, nursing colleges and training institutes for its para-medical staff and other employees with a view to improve the quality of services provided under the Employees' State Insurance Scheme."

    5. The Statement of Objects and Reasons This Statement is meant for convincing the Hon’ble Members of Parliament about the purpose of the amendments proposed. The Para 4 (xiv) of the Statement says that the provision in the Bill reproduced in the previous Slide is one of the Salient Features of the Bill and “it improves the quality of its service delivery andraise infrastructural facilities by opening medical colleges and training facilities in order to increase its medical and para-medical staff.” (See Page No. 89 of the Parliamentary Standing Committee Report given as Appendix I)

    6. When read together • When the Clause 15 of the Bill and the Para 4 (xiv) of the Statement of Objects and Reasons are read together, it gives the impression that the quality of services provided under the ESI Scheme will be improved by increasing the number of medical and para-medical staff in the ESI Corporation.

    7. In other words, it implies that increasing the number of the medical and para-medical staff in the ESI Corporation would facilitate improving the quality of services provided under the ESI Scheme.

    8. ESIC Medical Colleges for Under-graduate courses and institutions for para-medical staff

    9. The ESI Corporation was aware that “a number of ESI Hospitals are under-utilised but the fixed expenditure on salaries, equipments and maintenance remains the same which results in increase in per-capita expenditure medical care.” The Sub-Committee of the ESIC, therefore, suggested for opening up the hospitals “to non-insured persons also against payment of user charges”. • (Refer to Col.4 against Sl.No.15 of the Report of the Sub-Committee regarding the need for amending Sec. 59(1) to insert a proviso thereunder). This statement with reference to Sec. 59(1) runs contrary to the stand taken for adding Sec. 59 –B as mentioned in the Slide No.4. Does it not? • The information provided in the Annual Report revealed that considerable number of ESIC Hospitals and ESIS Hospitals were under-utilised.

    10. If there was a need for increasing the number of medical officers and para-medical staff, in spite of there being less occupancy in the hospitals, the natural course of action was recruitment only.

    11. The ESI Corporation had published a book in the year 2002 titled “Norms and Standards of Staff & Equipment for ESI Hospitals & Dispensaries”. • It had been published after extensive research and comparison with the hospitals run under the CHS specifying norms of staff. • It was not clear whether the norms prescribed after extensive analysis for deployment of staff at the field level, as per the said book were found to be defective before the ESI Sub-Committee arrived at the findings that increasing the medical and para-medical staff by setting up medical colleges and nursing colleges was the solution for improving the quality of service provided under the ESI Scheme.

    12. If the ESI Corporation had arrived at the decision that the number of medical and para-medical staff must be increased even beyond the norms prescribed for the CHS-run hospitals and dispensaries, it could activate the recruitment process and recruit more doctors, nurses, etc., It was not necessary to set up medical colleges and that too by amending the Act for that purpose. Besides, it is not legally permissible to use services of trainee-nurses as a substitute for the services of trained nurses.

    13. Is there any need for undergraduate Medical Colleges? • The proposals for setting up Medical Colleges for undergraduate courses in so many centres would not have been recommended by the Sub-Committee, if only • The Committee had been informed of the experience of the ESI Corporation that there was no difficulty in recruiting any number of doctors. • The no. of applicants far exceeded, always, the no. of vacancies, whenever the ESiC conducted examinations for recruitment.

    14. ESIC Post-graduate Medical Colleges

    15. If the ESIC was in need of more doctors with post-graduate qualifications, • Why did the ESIC not permit the already serving doctors to join post-graduation courses, even though they had, themselves, qualified for it and were ready to execute the agreement to serve the organization as per rules on the subject? • How many Medical Officers were denied permission and Study Leave to prosecute their post-graduate courses, instead of taking advantage of their extra efforts? • Why did the ESIC not tie up with post-graduate medical educational institutions for sponsor-ship, when such sponsor-ship is accepted by various institutions? • Were these facts examined on file before taking action for construction of buildings even before the parliamentary approval on 03.05.2010?

    16. Super-specialists

    17. The ESI Hospitals did not have any super-speciality facilities by 2009. They were functioning almost as referral hospitals and referred cases to the hospitals with whom there were tie-up arrangements. • It was also a fact that medical personnel with super-speciality qualification were not available to the ESIC always. • But, does it necessitate recruitment of specialists on contract basis or opening of so many post-graduate medical colleges by the ESIC? (One may keep in view that there was a separate amendment to Sec. 17 for recruitment of specialists which has been dealt with in http://flourishingesic.info/2012/08/23/amendment-2010-the-enigma-episode-1

    18. As every proposal is required to be made after examining the cost-benefit ratio, the following questions, naturally, arose in the issue of opening medical colleges by the ESIC both for undergraduate and post-graduate courses: • How many super-speciality cases were then referred to such hospitals during the previous three years? • What was the total cost of such referred cases? • What was the total estimated initial cost for setting up the super-speciality hospitals and the recurring yearwise expenditure in so many centres with medical colleges for under-graduate courses and post-graduate courses?

    19. No such analysis of cost-benefit ratio had been brought out in the proposal.If such analysis had been made, the proposal for opening so many post-graduate colleges would have been re-considered by the Sub-Committee.

    20. At the time when these proposals were being mooted, it was the common talk in the ESI Corporation that if the requirement was to purchase a pin for office use, the action taken was not to buy a pin from the market but to set up numerous Steel Rolling Mills. • This simile applies very correctly to the proposal for the setting up of so many medical colleges. • The requirement of the Indian Defence is met through only one medical college at Pune. But, the ESIC wanted to set up numerous medical colleges.

    21. Recurring and Non-recurring expenditure • Running the medical colleges would involve heavy recurring expenditure. • It is learnt that in respect of one medical college alone, (A relatively small hospital with an attached 500-bedded hospital), it was calculated later that the recurring expenditure would be around Rs.129 crores, when the ESIC ran it. • The non-recurring expenditure would be Rs. 560 crores, as per the calculation.

    22. How many Medical Colleges for Delhi, Maharashtra, Karnataka, Kerala, Tamilnadu, AndhraPradesh, Orissa and West Bengal regions? • What is the revenue from these regions?

    23. Allahabad and Benares Universities • The information from a reliable source is that the Allahabad University finds that the cost of running a single Medical College costs four times the total expenditure of the entire university. • The cost of running a medical college by the Benares University is five times the cost of the entire university.

    24. This calculation regarding the recurring expenditure does not seem to have been made on record before the amendments were made. • These calculations had been made only later. • So, what was the information provided to the Parliament, earlier, as per the Bill cleared by theMinistry of Law?

    25. Financial Memorandum Para 3 of the Financial Memorandum which was part of the aforesaid ESI (Amendment) Bill, 2009 reads: “The Bill does not involve any expenditure whether recurring or non-recurring nature”. (Please see page 90 of the Parliamentary Standing Committee Report for the Financial Memorandum in the Bill, given as Appendix – I )

    26. That was the reply given to the Parliament before which the Annual Reports of the ESIC are placed as per Sec. 36 of the ESI Act, 1948.

    27. Now the events in History

    28. Proposal of the ESI Corporation: • The ESI Corporation decided, in its meeting dated 17.7.2007, that a Sub-Committee of the Corporation be constituted to review the existing provision of the ESI Act and suggest amendments keeping in view the changed economic scenario.

    29. Proposal of the Sub-Committee: • The Report of the Sub-Committee of ESI Corporation on amendments to the ESI Act, 1948 contains the following as “Reasons” for inserting a ‘New Section’ as Sec. 59 (B) against Sl. No. 17 of its report (Page 17 & 18 of Annexure – A):

    30. “There is acute shortage of doctors and para-medical staff in ESI Hospitals/dispensaries which is adversely effecting the delivery of health care services to insured persons. It is, therefore, necessary for ESIC to have its own Medical Colleges and other training institutions to produce doctors and paramedical staff. These doctors/paramedical staff would be required to render such minimum service in ESI hospitals/dispensaries/institutions as may be decided by the Corporation.”

    31. Approval of ESI Corporation • The ESI Corporation approved the report of the Sub-Committee on 22.2.2008 in its 142nd meeting.

    32. Approval of the Ministry of Labour “The amendment proposals suggested by the Corporation have been considered in the Ministry. It is considered necessary to incorporate amendments in the ESI Act as suggested by the Corporation”. (Para 4 of the Note for the Committee of Secretaries dated 3.11.2008 signed by Mr. S.K.Srivastava, Joint Secretary to the Government of India with the approval of the Secretary, (L&E)

    33. Ministry of Labour • Ministry of Labour & Employment prepared the Draft Note for the Cabinet and circulated it to the Ministries/Departments/State Governments. • The Ministry obtained their views. • The views of the State Governments are given in the following slides:

    34. Uttarakhand • Uttarakhand gave specific opinions only in respect of Sec.87, Sec. 2 (9), Sec. 45 and Sec. 45 -1 (b).

    35. Assam • Assam “agreed to proposed amendments”.

    36. Madhya Pradesh • Madhya Pradesh gave opinion about Sec. 87 only.

    37. Goa • “Supported”

    38. Gujarat • Gujarat opined about Sec. 59 (2) on third party participation only.

    39. Tamil Nadu “No comments”.

    40. Kerala • Kerala gave opinion about Sec. 2(1), Sec. 2 (11) (v), Sec. 2 (17), Sec. 59(2) only.

    41. Bihar • Bihar gave opinion about Se. 2 (1) and Sec. 91(A) only.

    42. West Bengal • West Bengal gave opinion about Sec. 2 (1), Sec.2 (11) (iii) & (iv), Sec. 17 (3), Sec. 45-A (1), Sec. 56 (3), Sec. 59 (3) and Sec. 87 only.

    43. Haryana • “Agreed to proposed amendments”

    44. Chandigarh • “Agreed to proposed amendments”

    45. Andhra Pradesh • Andhra Pradesh gave opinion about Sec. 10 only.

    46. Puducherry • Puducherry gave opinion about Sec. 2 (1), Sec. 17, Sec. 87 and Sec. 91-A only.

    47. Orissa • “No comments”

    48. Meghalaya • “No comments”.

    49. These facts make it clear that the intricacies of the issue were not understood by the State Governments, in spite of the fact that they are Members of the Corporation and are very important stakeholders.

    50. Video Conference • Video Conference was held in the Ministry of Labour & Employment on 10.7.2008 with State Governments regarding the Draft Note for the Cabinet, on the amendments.