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Rs 11,127 Cr Collected For Welfare Of Construction Labourers. 87% Of It Is Lying Unused.

The Building and Other Construction Workers Welfare Cess Act, 1996, had mandated all states to form a welfare board and collect 1 percent of the construction cost from employers and developers

2013-11-02 , Issue 44 Volume 10

Photo: Vijay Pandey

Photo: Vijay Pandey

On 29 November 2005, Ishwar Chandra Vishwakarma was among the eight construction labourers summoned to the Office of the Labour Commissioner in New Delhi. Officials of the Delhi Labour Welfare Board registered Vishwakarma’s name and told him that he would soon receive various benefits thanks to a decade-old law.

“The registrations were done in the presence of Delhi Chief Minister Sheila Dikshit amid much fanfare,” recalls Vishwakarma, 55, a carpenter who was then working at a construction site in Shalimar Bagh. Little did he know that it would take six more years to avail the first benefit of the much-touted scheme.

The Building and Other Construction Workers Welfare Cess Act, which was passed in 1996, had mandated all states to form a welfare board and collect 1 percent of the construction cost from employers and developers. The money was to be used for the welfare of the labourers.

In 2011, the Delhi Building and Other Construction Workers Welfare Board (BOCWWB) gave Vishwakarma a cycle worth Rs 3,500. A year later, he got Rs 12,000 as scholarship for his son’s studies.

The carpenter was lucky. For him, it was a case of better late than never. But lakhs of others are still waiting to enjoy the benefits of the scheme because of red tape. “I applied for other benefits but could never get any due to red tapism. They would always cite some flaw in my application,” says Vishwakarma, who came to Delhi from Deoria in Uttar Pradesh in search of a livelihood.

According to labour ministry data, Rs 11,127 crore has been collected by various state governments across the country as building and construction workers’ cess until 30 September. Of this, a meagre Rs 1,448 crore (13 percent) has been spent on the welfare of the labourers.

So what happened to the rest, which amounts to nearly Rs 10,000 crore? Much to the agony of the poor workers, it remains unused in the state welfare boards’ coffers. Trade unions and civil society groups fear that the money might be misused if it is not utilised for their welfare.

On 7 February 2012, while disposing of a petition on the disturbing state of the Act’s implementation, a Supreme Court Bench headed by the then Chief Justice SH Kapadia issued orders that “funds available with the welfare boards shall not be utilised by the state for any other head of expenditure of the state government”.

Although the Act was passed in 1996 and rules were framed in 1998, except for Kerala, Tamil Nadu, Puducherry, Gujarat, Madhya Pradesh, Delhi, Odisha, Uttarakhand and West Bengal, no other state or Union territory had formed a BOCWWB until as late as 2006. It took a Supreme Court order of the same year for the remaining states to constitute the welfare boards for registration and roll out the benefits.

According to the labour ministry, out of the estimated 4 crore construction workers, only 1.07 crore have been registered under the Act. And senior officials, both at the Centre and in the states, are using the excuse of low registration to shrug off their responsibilities.

Registration of building and other construction workers should be made mandatory on the lines of the Employees’ State Insurance and Employees’ Provident Fund schemes, says Delhi BOCWWB Secretary Piyush Sharma. “We have been constantly communicating this suggestion to the Centre. Once, the registration levels improve, we can identify more beneficiaries and roll out benefits,” he says, adding that there should be a pan-India card for the workers’ registration so that they could avail of the benefits even if they changed cities.

But a senior labour ministry official, who did not wish to be named, puts the ball back in the state governments’ court. “Under the Central government legislation, the states were mandated to constitute the welfare boards. The functioning of the boards is entirely a state matter. Though some states are doing good work, the rest have failed to act in accordance with the spirit of the Act,” he says.

The cess collected by the states is hardly a reflection of the total amount that should have been collected, says Subhash Bhatnagar, the coordinator of the National Campaign Committee for Central Legislation on Construction Labour, which is pursuing a case against the poor implementation of the Act in the SC.

“The boards are unwilling to share the data on how much cess has been collected,” he says. “Though government records show that a big amount is lying unused, the total is far less than what it ought to be. No one knows whether the money collected is 1 percent of the total construction cost and if the collection is done regularly.”

Interestingly, the southern states have performed better in terms of the overall implementation of the scheme while states in the north have fared poorly. Kerala and Tamil Nadu had created labour welfare boards even before the Act was passed. While Kerala has registered 17.45 lakh workers under the scheme and has spent 82 percent of the total cess collection of 546.88 crore, Tamil Nadu has registered 22.84 lakh workers, and spent 45.99 percent of its cess collection of 604.31 crore.

Geetha Ramakrishnan, the additional secretary of the trade union body Nirman Mazdoor Panchayat Sangam, attributes the scheme’s better implementation in the southern states to the vibrant trade unionism there. However, she cautions that large-scale violations are happening in these states as well. “Instead of 1 percent of the construction cost, builders in Tamil Nadu deposit only 0.3 percent. If streamlined, the entire collection and disbursement processes can impact lakhs of additional workers in the state,” she says.

While Chhattisgarh has spent 56.43 percent of its cess collection of Rs 222.18 crore, it’s the states closer to the National Capital that have been the worst performers. Delhi has spent only 8.53 percent of the Rs 1,196 crore, while Uttar Pradesh (0.91 percent of Rs 739 crore), Haryana (2.17 percent of Rs 803 crore) and Gujarat (0.22 percent of Rs 190.22 crore) too have fared badly. But the worst of the lot are Goa and Himachal Pradesh, who have not spent a single paisa out of the Rs 14.88 crore and Rs 51.22 crore they have collected, respectively.

Most of the workers are migrants and don’t have documentary proof to furnish to avail of the benefits. Moreover, to get registered, a worker needs to have worked for three months in the past one year. However, most of the migrants are brought on three-month contracts after which they return or change cities.

In many cases, it has been found that the contractors did not register their workers with the labour department. The workers, who are largely unaware of the benefit schemes, continue to lose out on their rights. In Haryana, a worker has to be registered with the labour department for 3-5 years to avail the benefits. However, a few benefits such as maternity allowance, aid for daughters’ marriage and financial assistance in the event of death are not bound by requirements like minimum years of registration. But, to avail these funds, labourers have to produce marriage, birth and death certificates within specified periods. They fail to do so due to lack of awareness and access to officials.

Moushami Das, a professor at New Delhi’s Jawaharlal Nehru University and member of the People’s Union for Democratic Rights (which exposed labour rights violations during the 2010 Commonwealth Games through a petition in the Delhi High Court), says that the labour department’s apathy in dealing with welfare schemes is too stark to be missed. “Besides low registration of workers and lack of awareness among them, there are minimum wage violations, muster rolls are not maintained, safety measures are not adhered to and even the labour department has failed to get them implemented,” she says.

Meanwhile, a Bill for amending the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, and Building and Other Construction Workers Welfare Cess Act, 1996, is gathering dust in the Rajya Sabha. It proposes to streamline the registration process by removing the 90-day condition as well as set a 30-day time limit for authorities to deposit the cess with the welfare boards.

Until the amended Bill is passed, the unsung heroes of the construction industry will be left out of the growth story.

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(Published in Tehelka Magazine, Volume 10 Issue 44, Dated 2 November 2013)

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