States yet to use ₹70744-cr. funds for welfare of workers
- January 24, 2025
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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States yet to use ₹70744-cr. funds for welfare of workers
Sub :Schemes
Sec: Economy
Context:- The Union Labour Ministry said in a Right to Information (RTI) reply that the welfare boards for building and other construction workers of various States have not yet used the cess worth ₹70,744.16 crore they collected from the employers for the welfare of the workers.
About Building and Other Construction Workers (BOCW) Act,1996
- Purpose:
- It aims to regulate the employment, conditions of service, and welfare of construction workers.
- The Act mandates the creation of Construction Workers’ Welfare Boards by State governments to implement welfare measures
- Cess Collection:
- Under the Act, the welfare boards are empowered to levy a cess from employers at a rate between 1% and 2% of the cost of construction incurred by the employer.
- The cess is collected to fund welfare initiatives such as temporary accommodation, drinking water, sanitation facilities, and social security benefits for workers.
- Eligible Beneficiaries:
- As per the provisions, any worker aged between eighteen and sixty years, engaged in building or construction activities for a minimum of ninety days in the preceding twelve months, is eligible for registration as a beneficiary with the State Welfare Boards
Current Status of Cess Collection and Utilization
- Cess Collected and Allocated:
- Since 2005, ₹1,17,507.22 crore has been collected as cess from employers across the country.
- Of this, only ₹67,669.92 crore has been allocated to workers, leaving ₹70,744.16 crore unutilized.
Issues Highlighted in Implementation
- Underutilization of Funds:
- States have spent only a fraction of the funds collected, leaving large amounts unused.
- This has deprived workers of their statutory benefits.
- Cess Evasion:
- Allegations of significant cess evasion by builders and employers.
- Example: Maharashtra’s total cess collected over 19 years suggests construction worth ₹1 lakh crore annually, which is considered an underestimation.
- Lack of Support During COVID-19:
- The exodus of workers during the COVID-19 lockdowns in 2020 highlighted the lack of adequate welfare measures by the Centre and State governments.