As Supreme Court steps in, more than 22000 crore meant for construction workers welfare remains unspent

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In 1996, two acts were passed to promote the welfare of building and construction workers. These acts mandated constitution of construction workers’ welfare boards at the state level and collection of 1% Cess on cost of construction. The cess thus collected is to be spent by these boards to extend various welfare schemes to the registered construction workers. More than 22000 crore collected in the name of these workers remains unspent.

Government of India brought  ‘The Building And Other Construction Workers Welfare Cess Act’ in 1996 to levy and collect 1% to 2%  cess on the cost of construction incurred by builders to augment the resources of the Building and Other Construction Workers Welfare Boards. These boards are constituted in every state under the Building and Other Construction Workers Act of 1996. As of October 2016, more than Rs 22000 crore collected in the name of the construction workers welfare remains unspent.

What are these Boards for?

As per the provisions of the act,  every building & construction worker registered as a beneficiary with the board is entitled to avail benefits under various schemes formulated by the respective state Building & Other Construction Workers Welfare Board. These welfare schemes vary from state to state. For E.g., in Andhra Pradesh, the welfare board provides the following benefits for the registered construction workers

  • Marriage Gift (Rs 10,000)
  • Maternity Benefit (Rs 20,000)
  • Fatal Accident Relief (Rs 5,00,000)
  • Disability Relief (Up to Rs 5,00,000)
  • Natural Death Relief (Rs 60,000)
  • Hospitalization relief ( Rs 3,000 per month up to three months)
  • Funeral Expenses (Rs 20,000)
  • Pension Scheme (Rs 3,000 per year)
  • Skill Development Training ( Rs 7,000 cost for training & Rs 300/- per day stipend)

Similarly, the Odisha board also extends different benefits. These benefits are extended to all those who are registered with the boards as a construction worker.  A person employed to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work for hire in connection with any building or other construction work is defined as a construction worker. Various categories of workers come under the definition of construction works and they are entitled for all the benefits under the Act.

How many workers are registered with these Boards?

A total of 2.15 crore construction workers are registered across the country with these boards as of December 2015. The detailed state wise breakup of the registered construction workers is available only up to 31st December, 2014. According to the available state wise data (up to December 2014), Madhya Pradesh leads this list with 24.9 lakh registered workers followed by Tamil Nadu (23.97 lakh), Andhra Pradesh (17.97 lakh), Kerala (16.87 lakh) and Uttar Pradesh (10.91 lakh). Big states like Bihar, Gujarat, and Jharkhand have fewer numbers of workers registered with the respective boards. Not a single worker is registered in Manipur, Dadra & Nagar Haveli, & Lakshadweep. Fewer than 1000 workers are registered in Goa, Daman & Diu, Himachal Pradesh & Nagaland. It is widely believed that not more than 40% of the total construction workforce is registered with these boards because of reasons like lack of awareness, stringent rules like age, 90 days of work etc.

How are these boards funded and how to they spend?

The State and the local governments collect the cess and then transfer to these boards. Till October 2016, , a total of Rs 28,455 crore  has been collected by the various states.  Out of this amount, the state boards spent a meager Rs 6097 crore. This is just 21% of the total cess collected. Over Rs 22000 crore remains unspent. Only 13 States/UTs have spent more than a third of these funds. Only Kerala state welfare board spent more than 90% of cess collected for this purpose. Eight (8) other States/UTs spent more than half the amount of collected cess. About 19 States/UTs have spent less than 20% of the total collected cess.

building and construction workers cess_Proportion of funds spent.png

The data indicates that some of the states that collected the highest amount of cess spent the least on the welfare of the construction workers. Maharashtra collected a total of Rs 3800, but spent just 6% of this amount on the welfare of workers. Similarly, Karnataka collected Rs 3626 crore, but spent just 6% of this amount. Uttar Pradesh (19%), Haryana (7.5%), Delhi (11.4%), Madhya Pradesh (35%), Tamil Nadu (34%) are also in the list. A total of 12 states collected more than Rs 1000 crore rupees in cess. These 12 states collected about 79% of the total cess collected in the country and together spent just 20% of the amount collected.

building and construction workers cess_amount of cess collected & spent.png

Labour Welfare an empty talk?

This indifference is seen across party lines and in various states. Gujarat that has been ruled by the BJP for close to two decades has spent only 2.5% of the collected cess. States like Maharashtra that have been ruled by the Congress till recently have fared no better. The only exception seems to be Kerala.

The Central Government says it has been constantly reminding the State governments and State Welfare Boards to take steps to accelerate registration of construction workers, collection and utilization of cess. But despite all this talk, there is hardly any progress on ground

Supreme Court steps in

The Supreme Court while hearing a PIL (WP (Civil) 318/2006), recently mentioned that these facts are quite startling. The court directed every state government to intimate the total amount of cess collected till March 2017 to the CAG. The court also directed that the cess collected by various state & local governments, but not transferred to the board should immediately be transferred to the board. The CAG on its part has highlighted the laxity of the various welfare boards in registering workers and spending the amount meant for them.

building and construction workers cess_3.png

 

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