States yet to use ₹70744-cr. funds for welfare of workers

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.