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More than Rs. 28000 Crores Cess collected 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. More than Rs. 28000 crores of cess collected in the last 20 years is still unspent.

In the PIL (W.P. (Civil) No. 318/2006) regarding the misuse and low spending of the ‘Building And Other Construction Workers Welfare Cess’, the Supreme Court issued a slew of directions to both the Central & State Governments. Among other things, the court directed mandatory social audits for the expenditure from this fund, constituting advisory & expert committees, extending other benefits, coming with a model welfare scheme for building & other construction workers.

The Building Workers Cess
Parliament enacted the ‘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 the workers. Though the act was passed in 1996, the actual implementation began in 2007.

Model Welfare Scheme for the Workers
Following the directions of the Supreme Court, the Government of India came up with a model welfare scheme for ‘Building and Other Construction Workers’ including an action plan for its implementation. The model scheme lays emphasis on easy registration of workers, life & disability cover, health & maternity cover, education, housing, skill development, awareness programs, pensions etc. The model scheme is supposed to be adopted by states and all the benefits listed in the scheme have to be extended to the workers.

Only about 60% of the Workers registered with the Welfare Boards
A total of 3.24 crore construction workers are registered across the country with these boards as of December 2018. According to the available state wise data, Uttar Pradesh with 42.1 lakh has the most number of registered workers followed by West Bengal with 31 lakh workers. Madhya Pradesh is third in the list with 29.96 lakh registered workers. Apart from these three states, Tamil Nadu, Odisha, Andhra Pradesh, Kerala, Rajasthan, Karnataka, Chhattisgarh, Telangana & Bihar 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 numbers of workers registered with the respective boards. Goa is the only state where less than 10000 workers are registered.
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. As per the National Sample Survey (2011-2012) estimates, there are 5.02 crore building & other construction workers in the country. Of these, 3.24 crore have registered with the respective state welfare boards till December 2018. In other words, only about 60% of the workers are registered with these boards.

Only 39% of the Cess is spent till date
As per the data released by the government, only Rs. 17,869 crores has been spent by the welfare boards out of the total of Rs. 46,118 crores Cess collected till December 2018. This is only 39% of the total cess collected. In other words, more than Rs. 28,000 crores collected in the name of the workers welfare lies unspent. Only 12 States/UTs have spent more than half (50%) of the cess collected. Kerala is the only state to have spent more than 100% of the cess collected. In all, 14 States/UTs spent a greater percentage of cess compared to the national average of 39%. Of the bigger states, Maharashtra & Gujarat each spent less than 10% of the cess collected till December 2018. In fact, both these states account for close to Rs. 8000 crores of unspent cess.

Featured Image: Labour Welfare

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