Govt reduces rate of ESI contribution from 6.5 pc to 4 pc

NEW DELHI: In what has been described as a ‘historic’ decision, the Union Government on Thursday reduced the rate of contribution under the ESI Act from 6.5 per cent to four per cent, with employers’ contribution being reduced from 4.75 per cent to 3.25 per cent and employees’ contribution reduced from 1.75 per cent to 0.75 per cent.
The reduced rates will be effective from July 1, this year.
“This would benefit 3.6 crore employees and 12.85 lakh employers”, said the Ministry of Labour and Employment, in a statement here. (AGENCIES)