Over Rs 25,000 Crore Meant for Labour Welfare Remains Unspent

As many as 2.58 crore construction workers are registered across the country with labour boards.

Representative image of a construction worker.

(Photo: Tanmoy Bhaduri)

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. More than Rs 25,000 crore collected in the last 20 years is still unspent.

The Standing Committee on Labour submitted a report in the recent session of Parliament about the workers’ welfare cess and their utilisation. As per data published in this report, more than Rs 25,000 crore cess collected in the last 20 years is still unspent and labour welfare sounds more like empty talk.

The Building Workers Cess

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 noted by Factly earlier, these welfare boards are supposed to take up a variety of activities for the welfare of workers.

Though the Act was passed in 1996, the actual implementation began in 2007.

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Less than 50% of the Workers Registered with the Welfare Boards

A total of 2.58 crore construction workers are registered across the country with these boards as of March 2017. According to the available state-wise data, Uttar Pradesh with 32.14 lakh has the most number of registered workers, followed by West Bengal with 28.81 lakh workers.

Madhya Pradesh is third on the list with 26.53 lakh registered workers. Apart from these three states, Tamil Nadu, Odisha, Andhra Pradesh, Kerala, Rajasthan, Karnataka, and Chhattisgarh have more than 10 lakh registered workers each.

Another six states have more than 5 lakh but less than 10 lakh registered workers. Big states like Bihar, Gujarat, and Jharkhand have fewer number of workers registered with the respective boards. Fewer than 10,000 workers are registered in the states of Goa, Nagaland, and Meghalaya.

(Photo Courtesy: Factly)

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It is widely believed that the entire construction workforce is not registered with these boards because of lack of awareness and stringent conditions like age criteria, 90 days of work, etc. The committee also noted that the primary work relating to registration of workers has not been given the desired priority by the Ministry and the welfare boards.

The Ministry of Labour representatives told the committee that there are around 4.6 crore construction workers. The committee noted that these estimates could be wrong and there could be many more construction workers since the construction activity across the country has picked up.

To increase the number of registrations with the welfare boards, the committee has suggested multiple measures, including giving registration powers to greater number of officers, visiting construction sites for registration of workers, wide publicity, online registration of workers, etc.

(Photo Courtesy: Factly)

The Cess Collected in the Last 20 Years is Too Low

The state and the local governments are supposed to collect the cess and then transfer the same to these boards. The Ministry of Labour reported to the committee that a total of Rs 32,632.96 crore had been collected by the states during the last 20 years.

The Committee felt that the amount of cess collected in the last 20 years does not match the construction activities carried out. The committee further noted that the amount reported by the Ministry could be of the government organisations like the Railways/NHAI/PWD/CPWD alone.

The committee also noted that there is no proper system of collection of cess and its transfer to the welfare boards.

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In some states, the welfare boards were constituted about eight years after cess collection began. The committee asked the Ministry to identify such states and seek the actual numbers related to cess collection in the last 20 years.

(Photo Courtesy: Factly)

As per data submitted by the government, only Rs 7,516.52 crore has been spent by the welfare boards out of the total cess collection of Rs 32,632.96 crore.

This is only 23% of the total cess collected. Only six states have spent more than half the cess collected. Kerala spent close to 99% of the cess collected, the only state to have spent more than 90%.

(Photo Courtesy: Factly)

The data indicates that the states that collected the highest amount of cess spent the least on the welfare of construction workers. Maharashtra collected a total of Rs 5,074 crore, but spent just 5% of this amount on the welfare of workers. Similarly, Karnataka collected Rs 3,861 crore, but spent just 6%.

Uttar Pradesh (20%), Delhi (9%), Haryana (9%), Tamil Nadu (35%), Rajasthan (39%), and Madhya Pradesh (35%) are next on the list. A total of 13 states collected more than Rs 1,000 crore each.

These 13 states collected more than 82% of the total cess collected in the country and together spent just 21% of the amount collected.

(Photo Courtesy: Factly)

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Labour Welfare an Empty Talk?

The committee noted that 5% of the total 23% expenditure was on administrative expenditure like salaries, etc. The committee also noted that many state welfare boards have not submitted audited accounts to the state government.

(Photo Courtesy: Factly)

This indifference is seen across party lines and in various states. Gujarat, which has been ruled by the Bharatiya Janata Party (BJP) for close to two decades, has spent only 2.2% of the cess collected. States like Maharashtra that have been ruled by the Congress till 2014 have fared no better. Of the bigger states, the only exceptions seem to be Kerala and West Bengal.

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 and collection and utilisation of cess.

But despite all this talk, there is hardly any progress on the ground. The Supreme Court has also been hearing a writ petition (W.P. (Civil) No. 318/2006) in this matter since 2006 and has recently directed all the state governments to submit the following within six weeks to the CAG.

• Amount of cess collected since the enactment of the act till 31 March 2017
• Amount collected and transferred to welfare boards till 31 March 2017
• Amount which has been collected but not yet transferred to the boards

Hopefully, the CAG will be able to throw more light on this issue.

(This article was first published on Factly and has been republished with permission.)