Business Laws and Ethics · Employees State Insurance Act, 1948

Employees' State Insurance Corporation: Constitution and Authorities

Updated 10 October 2026 · Fact-checked

The Employees' State Insurance Corporation is a body corporate set up by Central Government notification under Section 5 of the Code on Social Security, 2020. It has a Chairperson, Vice-Chairperson, members from several groups and the Director General ex officio. A Standing Committee runs its affairs, and a Medical Benefit Committee assists on medical benefits.

Understand Employees' State Insurance Corporation and its Authorities

The ESI scheme needs a body to run it. That body is the Employees' State Insurance Corporation (the Corporation). Under the Code on Social Security, 2020, Section 5 creates it. The Central Government constitutes it by notification, from a date it specifies, for Chapter IV (the ESI chapter) and the related provisions of the Code.

The Corporation is a body corporate. It has perpetual succession and a common seal, and it can sue and be sued in its own name. So it continues even when its members change, and it can hold rights and be held liable as a legal person.

The Corporation is large and balanced. It brings together the Government, the States, employers, employees, doctors and Parliament. Because it is big, it cannot manage daily work. So the Code allows a Standing Committee drawn from its members, which administers the affairs of the Corporation subject to the Corporation's general superintendence and control.

Medical care is a major part of ESI. So the Central Government may constitute a Medical Benefit Committee to assist the Corporation and the Standing Committee in administering medical benefits. The Corporation may also set up other committees by order to help it.

The Director General of the Corporation is a member ex officio. Section 24 deals with the Director General's salary, powers and duties, which are partly left to rules. Do not confuse the Director General with the Chairperson, who is appointed by the Central Government.

Key rules to remember

Constitution of the Corporation: Central Government constitutes the Corporation by notification, from the date specified (Section 5(1)); Purpose: Chapter IV and related provisions, and their administration.
Members of the Corporation: Chairperson 1 + Vice-Chairperson 1 + Central Government officials (not more than 5) + one for each State + one for Union territories + employers' representatives 10 + employees' representatives 10 + medical profession 2 + Members of Parliament 3 + Director General (ex officio); Chairperson and Vice-Chairperson are appointed by the Central Government. Employer, employee and medical members are appointed in consultation with recognised organisations.
Parliament members: 3 = 2 Lok Sabha + 1 Rajya Sabha; Elected respectively by the members of the House of the People and the Council of States.
Legal status: Body corporate + perpetual succession + common seal + can sue and be sued (Section 5(2)); Name: Employees' State Insurance Corporation.
Standing Committee: Constituted by the Central Government by notification, from amongst the members of the Corporation (Section 5(3)); Works subject to the general superintendence and control of the Corporation.
Functions of the Standing Committee: (a) administers the Corporation's affairs and may exercise its powers; (b) must submit matters specified in regulations to the Corporation; (c) may submit any other matter at its discretion (Section 5(4)); Clause (b) is mandatory, clause (c) is discretionary.
Medical Benefit Committee: Constituted by the Central Government by notification, with composition as specified, to assist the Corporation and the Standing Committee on medical benefits (Section 5(5)); Its duties and powers are as prescribed by the Central Government.
Other committees and tenure: Corporation may constitute committees by order (Section 5(6)); a member continues in office after tenure expires until a successor is appointed (Section 5(7) proviso); Terms and tenure of Corporation and Standing Committee members are as prescribed.

How to solve Employees' State Insurance Corporation and its Authorities questions

Questions on this topic ask you to state composition, status, or the roles of the committees. Use the same frame every time.

1Read the question and mark which body it asks about: Corporation, Standing Committee, Medical Benefit Committee or Director General.
2Start with the source: Section 5 of the Code on Social Security, 2020, and that the Central Government acts by notification.
3For the Corporation, state its legal status first: body corporate, perpetual succession, common seal, sue and be sued.
4If composition is asked, list members in the Code's order with numbers, and note who appoints each group.
5For committees, state who constitutes them, from whom they are drawn, and what they do.
6Add the control link: the Standing Committee works under the Corporation's superintendence and control.
7Close with prescribed matters: manner and terms are left to rules made by the Central Government under Section 155.
8Check that each number you wrote (5, 10, 10, 2, 3) matches the Code.

Quickest way: Remember the members as a list

When to use it: Use this for short notes and MCQs asking for the number or type of members.

Write the order: Chair, Vice-Chair, Centre's officials, States, UTs, employers, employees, doctors, MPs, Director General.
Attach the numbers: not more than 5, one per State, one for UTs, 10, 10, 2, 3.
Remember MPs as 2 + 1, Lok Sabha then Rajya Sabha.
Remember Standing Committee as 'administers', Medical Benefit Committee as 'assists'.
Tag every constitution as 'Central Government, by notification'.

Common mistakes in Employees' State Insurance Corporation and its Authorities

Saying the ESI Corporation is created under the ESI Act, 1948 only, without the Code.
The chapter title still uses the old Act name.
Fix: Cite Section 5 of the Code on Social Security, 2020, and mention that the Act's subject is now in the Code.
Giving wrong numbers of employer, employee or medical members.
Students mix the numbers 10, 10 and 2.
Fix: Learn: employers 10, employees 10, medical profession 2, Members of Parliament 3.
Saying all three Members of Parliament are from Lok Sabha.
Students forget the Rajya Sabha member.
Fix: Write two from Lok Sabha and one from Rajya Sabha.
Treating the Standing Committee as independent of the Corporation.
The word 'administer' suggests full power.
Fix: State that it acts subject to the general superintendence and control of the Corporation and must refer specified matters to it.
Saying the Director General is appointed like other members or votes as Chairperson.
The role is confused with the Chairperson.
Fix: Say the Director General is a member ex officio, by virtue of the office.
Mixing up the Medical Benefit Committee's role with that of the Standing Committee.
Both assist the Corporation.
Fix: The Medical Benefit Committee is for medical benefits only and assists both the Corporation and the Standing Committee.

Worked examples

Example 1

Explain the legal status of the Employees' State Insurance Corporation and how it is constituted under the Code on Social Security, 2020. (Short note)

Show the solution

Source: Section 5 of the Code on Social Security, 2020.
Constitution: the Central Government, by notification, constitutes the Corporation from a date specified in it, for Chapter IV and related provisions and their administration.
Status: the Corporation is a body corporate named Employees' State Insurance Corporation.
Features: it has perpetual succession and a common seal, and can sue and be sued in that name.
Meaning: its existence does not end with a change of members, and it can enforce rights and be sued in its own name.

Answer: The Corporation is constituted by Central Government notification under Section 5. It is a body corporate with perpetual succession and a common seal, and it can sue and be sued in its own name.

Example 2

State the composition of the ESI Corporation, and the role of the Standing Committee and the Medical Benefit Committee.

Show the solution

Composition (Section 5(1)): a Chairperson and a Vice-Chairperson, both appointed by the Central Government.
Government side: not more than five officials of the Central Government, one person for each State, and one person for the Union territories.
Stakeholders: ten employers' representatives, ten employees' representatives and two from the medical profession, appointed by the Central Government in consultation with recognised organisations.
Parliament and officer: three Members of Parliament (two from Lok Sabha, one from Rajya Sabha) and the Director General as ex officio member.
Standing Committee: constituted by notification from amongst the Corporation's members. It administers the Corporation's affairs under the Corporation's superintendence and control, must submit matters specified in regulations, and may submit any other matter.
Medical Benefit Committee: constituted by notification to assist the Corporation and the Standing Committee on medical benefits, with duties and powers as prescribed.

Answer: The Corporation has a Chairperson, Vice-Chairperson, up to 5 Central officials, State and Union territory representatives, 10 employer, 10 employee and 2 medical members, 3 MPs and the Director General ex officio. The Standing Committee administers its affairs under its control. The Medical Benefit Committee assists on medical benefits.

Exam tips

Short notes and 14-mark parts often ask for composition. Write it as a numbered list with the figures.
MCQs test numbers such as 10 employer members, 10 employee members, 2 medical members and 3 MPs. Check them against your list.
Always say 'Central Government, by notification' when asked who constitutes a body.
Write 'Code on Social Security, 2020, Section 5' in your answer. Do not cite the repealed Act's section numbers.
For matters left to rules, mention that the Central Government prescribes them, as Section 155 allows.

Practice questions from Employees State Insurance Act, 1948

Employees' State Insurance Corporation and its Authorities in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Employees' State Insurance Corporation and its Authorities: frequently asked questions

Who is the Chairperson of the ESI Corporation?

The Code says the Chairperson is appointed by the Central Government. It does not name a person, so in an exam write the rule, not a name. The Vice-Chairperson is also appointed by the Central Government.

How many Members of Parliament are on the Corporation?

There are three. Two are members of the Lok Sabha and one is a member of the Rajya Sabha. They are elected by the members of their respective Houses.

What does the Standing Committee do?

It administers the affairs of the Corporation and may exercise its powers, subject to the Corporation's general superintendence and control. It must submit matters specified in the regulations to the Corporation, and may submit any other matter.

Is the Medical Benefit Committee the same as the Standing Committee?

No. The Medical Benefit Committee assists the Corporation and the Standing Committee only in administering medical benefits. The Standing Committee has wider administrative work.