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Code on Social Security should ensure proper utilisation of BOCW funds

Last week, the Union Ministry of Labour and Employment notified the draft rules under the Code on Social Security, 2020 inviting objections and suggestions from the stakeholders. The process was delayed by at least six months due to pandemic spread in the country and subsequent lockdown.

The draft rules provide for operationalization of provisions in the Code on Social Security, 2020 relating to Employees’ Provident Fund, Employees’ State Insurance Corporation, Gratuity, Maternity Benefit, Social Security and Cess in respect of Building and Other Construction Workers, Social Security for Unorganised Workers, Gig Workers and Platform Workers.

The code provides for self-assessment and payment of Cess in respect of building and other construction workers. However, such self-assessment may be subject to abuse by the building contractors because building workers are usually migrant labours from rural areas of the same State or other States who often work in one or many States where the Cess contribution is collected, but require benefits in another State. As the implementation of BOCW Welfare Scheme reflects widespread evasion of payment of Cess adversely affecting generation of funds, the method of self-assessment as introduced in the Code be revisited so as to ensure that the building contractors do not abuse the provision.

Though certain social security benefits have been mentioned in the Code for the Building and Other Construction Workers (BOCW), the details of benefits, entitlement calculation, mode of delivery, etc. have not been clearly spelt out. What is more worrisome is the fact that no procedure/guidelines have been prescribed for the management of funds collected out of the Cess.

Since there is little recognition in the Code of the real problem underlying the accumulation of Cess Funds leaving the BOCWs at the mercy of the State Level Boards which are generally not constituted or do not function effectively, there is need to issue specific guidelines and hold periodical meetings with such Boards at the appropriate level to ensure better monitoring and potent management of funds collected out of Cess.

The rules further provide for Aadhaar based registration of Building and Other Construction Workers on the specified portal of the Central Government and the State Government or the State Welfare Board. Where a building worker migrates from one State to another he shall be entitled to get benefits in the State where he is currently working and it shall be the responsibility of the Building Workers Welfare Board of that State to provide benefits to such a worker. To make the rules more effective and worker friendly there should time bound process to disburse workers’ entitlements.

Another important matter of concern is non utilisation of BOCW funds and allowing them to accumulate by several states. It is a matter of serious concern that States are sitting on thousands of crores of rupees collected towards the welfare of construction workers, even as labours have been left to fend for themselves amid the prolonged lockdown period arising out of the Covid-19 Pandemic. The Government should clearly specify and frame regulations on the items on which the Cess Fund should be spent, the violations of which shall attract stringent penalty and criminal liability. In other words, there must be legislative checks in the law itself on the reported under utilisation and misutilisation of BOCW funds for fixing accountability for poor implementation or non-implementation of the Directives regarding spending of Cess Fund.

The Code should also provide for regular internal audit and periodic CAG audit by the CAG of the BOCW Cess Funds collected by the States so that corrective measures can be initiated, as and when warranted, to prevent under utilisation or misutilisation of such Funds accumulated for the purpose of the Welfare of construction workers.

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