For the first time in India, medical benefit as a non-cash benefit was provided under

Correct — A, (a) the Employees’ State Insurance Act, 1948. The phrase to fasten on is ’non-cash benefit’. Indian labour statutes before 1948 all gave the worker money — compensation for an employment injury, wages during sickness, an allowance around confinement. The Employees’ State Insurance Act was the first to give him a service instead: medical treatment, delivered through dispensaries, hospitals and panel practitioners, to the insured person and to his family, with no bill to settle and no reimbursement to claim.

Section 46 of the Act lists six benefits, and reading the list makes the point better than any summary. Five of the six are periodical payments — sickness benefit, maternity benefit, disablement benefit, dependants’ benefit and funeral expenses. The sixth, medical benefit, is defined as medical treatment for and attendance on insured persons. Cash flows in five of the six; in the sixth what is provided is care. That is what makes the Act the first Indian statute to deliver a social security benefit in kind.

The history is worth knowing because it also disposes of the dates. In March 1943 the Government of India commissioned B. P. Adarkar to report on health insurance for industrial workers; his report, examined with help from the International Labour Organisation, became the basis of the Bill that was passed as the Employees’ State Insurance Act in 1948, the first major piece of social security legislation in independent India. The scheme itself was inaugurated at Kanpur on 24 February 1952, and at Delhi the same day. Everything in the Act is built around a contributory insurance fund into which the employer and the employee both pay, which is precisely what allows a benefit to be given as a service rather than as a sum of money: the Corporation runs the medical facilities out of the fund.

Why the others are wrong

• (b)the Factories Act, 1948 — The Factories Act, 1948 was passed in the same year and does contain health and welfare chapters, which makes it a genuine competitor until the question’s wording is taken seriously. But what the Factories Act creates are duties of the occupier about the premises — cleanliness, ventilation, lighting, drinking water, first-aid appliances, an ambulance room in a large factory, a canteen, a creche. Those are conditions of work and safety obligations, not a benefit payable to an insured person on the happening of a contingency. No worker has a claim under the Factories Act to be treated for an illness; he has a right to work in premises that meet a standard. The two ideas are different, and social security is about the first.
• (c)the Maternity Benefit Act, 1961 — The Maternity Benefit Act, 1961 pays cash. Its central provision is the maternity benefit itself — payment at the rate of the average daily wage for the period of absence around confinement — and even the item in it that sounds medical is money: the medical bonus is a sum payable where no pre-natal confinement and post-natal care is provided free of charge by the employer. Its date is also wrong for a claim about being first: 1961 is thirteen years after the Employees’ State Insurance Act, and provincial maternity benefit legislation going back to the Bombay Maternity Benefit Act of 1929 had already been paying cash for decades.
• (d)the Mines Act, 1952 — The Mines Act, 1952 is safety legislation for a single industry. It regulates hours, employment underground, the appointment of managers and safety officers, notification of accidents and diseases, and requires first-aid appliances and arrangements at mines. Like the Factories Act it imposes duties on the employer about the workplace rather than conferring an insured benefit on a worker; and like the Maternity Benefit Act its date is later than 1948, so it could not be first in any case. A useful discipline on ’for the first time’ items is to check the dates before checking the substance: two of the three wrong options here are eliminated by arithmetic alone.

Social security benefits divide into benefits in cash and benefits in kind. A cash benefit replaces income the worker has lost — because he is sick, injured, out of work, too old to work, or has died leaving dependants. A benefit in kind supplies the thing itself, most often medical care, and it is administratively harder because the scheme must own or contract for hospitals, dispensaries and doctors rather than simply write cheques. The Employees’ State Insurance Act, 1948 built that machinery in India. Section 46 sets out six benefits: sickness benefit, maternity benefit, disablement benefit, dependants’ benefit, medical benefit and funeral expenses, of which only medical benefit is in kind. The Act came out of the report B. P. Adarkar was commissioned to write in March 1943 on health insurance for industrial workers, and the scheme began at Kanpur and Delhi on 24 February 1952. It is a contributory scheme, financed by contributions from employers and employees with State Governments sharing the cost of medical care, and it is administered by the Employees’ State Insurance Corporation, a statutory body. Two other landmarks frame it: the Workmen’s Compensation Act, 1923, which was the earliest Indian social security statute and paid only compensation in money, and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, which followed four years later with old-age and long-term savings benefits, again in cash.

Key facts

• The Employees’ State Insurance Act, 1948 was the first Indian statute to provide medical benefit as a benefit in kind rather than in cash.
• Section 46 of the Act lists six benefits: sickness benefit, maternity benefit, disablement benefit, dependants’ benefit, medical benefit and funeral expenses.
• Medical benefit means medical treatment for and attendance on insured persons; it is the only one of the six that is not a periodical cash payment.
• The Act grew out of the report B. P. Adarkar was commissioned to prepare in March 1943 on health insurance for industrial workers.
• The ESI scheme was inaugurated at Kanpur, and at Delhi, on 24 February 1952.
• It is a contributory scheme administered by the Employees’ State Insurance Corporation, with employer and employee contributions and a State Government share of the cost of medical care.
• Medical care under the scheme extends to the insured person and to the members of his family.
• The Workmen’s Compensation Act, 1923 was the earlier landmark and paid compensation only in money; the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 followed in 1952 with cash benefits for old age and long-term savings.

Common traps

• Choosing the Factories Act, 1948 because it shares the year and mentions first aid and an ambulance room. Those are duties about the premises, not an insured benefit.
• Assuming the Maternity Benefit Act provides medical care because it contains the words ’medical bonus’. The medical bonus is a cash payment.
• Forgetting that two of the four options are dated after 1948, which alone rules them out of any claim to be first.
• Confusing the date the Act was passed, 1948, with the date the scheme began, 24 February 1952.

• practice — not a real PYQ

  How many benefits are enumerated in section 46 of the Employees’ State Insurance Act, 1948?

  • (a)Four
  • (b)Five
  • (c)Six
  • (d)Seven

  Answer(c) Six

• practice — not a real PYQ

  The Employees’ State Insurance scheme was first inaugurated in India in the year

  • (a)1948
  • (b)1950
  • (c)1952
  • (d)1956

  Answer(c) 1952