ESI contribution rates cut from 6.5% to 4%, for the 1st time in 22 years

The rate of contribution under the Employees State Insurance Act has been reduced from 6.5% to 4%. The employer's contribution is cut from 4.75% to 3.25% while for employees it is cut down from 1.75% to 0.75%. This is the first time move in 22 years; the reduced rates will come in effect from July 1 and will benefit nearly 3.6 crore employees & 12.85 lakh employers. The ESI act provides for health-related events.