corporate law

Published on 10 April 2025

Employees' State Insurance Amendment 2024: Increased Investment Limits Explained

Introduction

On February 26, 2024, the Ministry of Labour and Employment issued the Employees’ State Insurance (Central) Amendment Rules, 2024, which took immediate effect upon publication in the official gazette. This amendment introduces a significant adjustment regarding investment limits for the Employees' State Insurance Corporation (ESIC).

Key Changes

  • Increased Investment Limit:
    • The financial limit for investments in securities—excluding those issued by the Central Government—has increased from Rs. 5 crore to Rs. 25 crore.
    • This change provides ESIC with enhanced flexibility in its investment strategies.

Background

  • A draft of these amendments was made available for public comment in December 2023.
  • During the feedback period, which lasted 30 days, no objections or suggestions were received.

Notification Details

The formal notification from the Ministry states:

G.S.R. 134(E).—In accordance with the requirements under sub-section (1) of section 95 of the Employees’ State Insurance Act, 1948 (34 of 1948), a draft of the amendment rules was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) on December 6, 2023. The public was invited to submit feedback within 30 days of the notification's release, which occurred on the same date.

  • Outcome of Public Feedback:
    • The public comment period concluded without any feedback received.

Provisions of the Amendment

In exercising powers granted by section 95 of the Employees’ State Insurance Act, 1948, the Central Government has established the following rules to amend the Employees’ State Insurance (Central) Rules, 1950:

  1. Title and Commencement:

    • These rules shall be known as the Employees’ State Insurance (Central) Amendment Rules, 2024.
    • They will come into force immediately upon their publication in the Official Gazette.

  2. Amendment to Investment Limits:

    • The existing rule 29, sub-rule (2), will be amended. The text will be revised from “rupees five crores” to “rupees twenty-five crores.”

Conclusion

The recent amendment significantly increases the financial capacity for the ESIC's investment in securities, enhancing its operational flexibility. Stakeholders are encouraged to familiarize themselves with these updates as they impact the management of the Employees’ State Insurance funds.

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