Ministry of Labour Extends ESI Scheme to 25 Districts in Madhya Pradesh Effective October 1

The Central Government has mandated the commencement of social security contributions and benefits across 25 districts of Madhya Pradesh, marking a significant expansion of the state's employee insurance coverage. In a move to formalize social security for thousands of workers, the Ministry of Labour and Employment notified that both employer and employee contributions will become mandatory in these regions starting next month.

Background

The Ministry of Labour and Employment issued Notification S.O. 5313(E) on September 28, 2026, exercising its powers under the third proviso to the First Schedule of the Code on Social Security, 2020. The notification seeks to bridge the gaps in the implementation of the social security framework within the State of Madhya Pradesh. Prior to this, several districts remained either entirely non-implemented or only partially covered under the existing insurance schemes. By invoking the transition provisions of the Code on Social Security, 2020, the government has streamlined the jurisdictional reach of the Employees' State Insurance Corporation (ESIC) to ensure uniform application of benefits across the identified regions.

Stakeholders Impacted

This notification directly impacts all employers and employees of establishments situated in the designated districts of Madhya Pradesh. Specifically, it applies to one previously non-implemented district, Niwari, and 24 partially implemented districts: Agar Malwa, Alirajpur, Anuppur, Ashoknagar, Balaghat, Barwani, Betul, Chhatarpur, Damoh, Datia, Harda, Jhabua, Mandla, Narsinghpur, Panna, Rajgarh, Seoni, Sheopur, Shivpuri, Sidhi, Tikamgarh, Umaria, Vidisha, and Dindori. Compliance officers, HR departments, and the Employees’ State Insurance Corporation (ESIC) officials are the primary administrative stakeholders responsible for executing this transition.

Key Provisions

Mandatory Contribution under Section 29:

The notification stipulates that contributions from both employers and employees of establishments in the specified 25 districts shall be payable under Section 29 of the [Code on Social Security, 2020](https://lawbase.lexops.ai/quicksearch-result/all-search/act?ref=20200928_Act_36_UOI). This formalizes the financial obligation of establishments to contribute to the social security fund managed by the ESIC.

Provision of ESIC Benefits under Chapter IV:

The Central Government has directed that any benefits provided by the Corporation under Chapter IV of the [Code on Social Security, 2020](https://lawbase.lexops.ai/quicksearch-result/all-search/act?ref=20200928_Act_36_UOI) shall now be extended to the employees of establishments in these areas. This includes medical, sickness, maternity, and disablement benefits as governed by the statutory framework of the Corporation.

Geographic Extension of Social Security:

The instrument identifies Niwari as a newly implemented district, while providing for the full implementation of the scheme in 24 other districts that were hitherto only partially covered, ensuring a comprehensive administrative rollout across the state.

Practical/Compliance Impact

Establishments operating in the listed districts must immediately update their payroll systems to account for employee and employer ESI contributions starting from the October wage cycle. Employers are required to register their employees on the ESIC portal if they have not already done so as part of the previous partial implementation. Failure to remit contributions under Section 29 may lead to penalties as prescribed under the Code on Social Security, 2020. Employees in these regions will now be eligible to access ESIC-run hospitals and dispensaries, and claim statutory benefits for medical exigencies as per the provisions of Chapter IV.

Effective Date

The Central Government has appointed the 1st day of October, 2026, as the date on which the contributions become payable and the benefits become available. The notification was issued and signed by Joint Secretary Ashutosh A.T. Pednekar on September 28, 2026.