Construction workers deserve better treatment

Construction workers deserve better treatment

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The cess at the rate of 1% is collected by states and Union Territories and utilised for the welfare of building and other construction workers by the State Building and Other Construction Workers Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. The actual/practical implementation of the Act, however, started only in 2007

According to the Union Labour Ministry, Rs 32,632.96 crore had been collected till the end of 2-16-17 FY as Cess under Building and Other Construction Workers’ Welfare Cess Act against which an amount of Rs 7516.52 crore had been spent for the purpose and objective of the Act. The Building and Other Construction Workers’ Welfare Cess Act, 1996, provides for levy and collection of cess at such rate not exceeding 2 per cent, but not less than 1 per cent of the cost of construction as the central government may notify. The cess at the rate of 1% is collected by states and Union Territories and utilised for the welfare of building and other construction workers by the State Building and Other Construction Workers Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.  The actual/practical implementation of the Act, however, started only in 2007.

There are two issues which emerge from this. First, construction is the second largest activity after agriculture in the country and the amount collected so far as Cess appears to be far less than the potential. It also shows that Labour Ministry’s surveillance and enforcement mechanism is poor and there are many loopholes in the system which need to be corrected urgently. Construction activities of Government of India, State Governments and PSUs constitute substantial portion of the total construction in the country and there seems to laxity in paying the Cess by the government agencies too. And secondly, the utilisation of cess is very poor as there was no fool proof system of collection and utilisation developed by the States. Thus, the basic objective of the Act has also been defeated as the construction workers have not been benefitted by the Cess Fund.

It should be noted that the Supreme Court had also taken serious cognizance of the lack of commitment in implementation, assessment, collection and utilization of the Cess Fund. The Supreme Court had also asked the CAG to undertake an audit. The Supreme Court had also passed instructions for healthy execution and implementation of the Act but the ground realities have not changed even after that.

The cess fund is required to be spent as per the requirements of the schemes formulated by the State Board. The Act provides for welfare measures like accidental assistance, pension, loans and advances for construction of a house, premia for group insurance schemes, education assistance, medical expenses, maternity benefits and other measures as may be prescribed.

The present system of assessment, collection of cess and its transfer to the BOCW Boards, is weak which often results into non-transparent actions and also leakages. The Parliamentary Standing Committee on Labour had once noted that no efforts had been made to compare the collected Cess figure with the total construction activities carried out in respective State. Also, the Departments/State Governments or BOCW Board have not made any efforts to reconcile those figures. It is also a fact that the cess assessing and collecting authorities were not under the direct control of BOCW Boards and there was no proper system of assessment and collection of cess, the Committee had desired to develop a foolproof system of assessment, collection and deposition of cess. There were also reports of the cess collected by the designated authorities not transferred to the BOCW Boards fully and the State Governments had utilized or diverted the collection in other heads/accounts.

It is also true that unlike ESI schemes, there is lack of knowledge and awareness about welfare Schemes and benefits thereof for the registered construction workers so that they may be encouraged to come forward for registration.

According to one survey, there are more than five crore construction workers in the country. Despite being one of the largest work force, construction workers are highly unorganised which in turn has resulted in their exploitation. These workers are one of the most vulnerable segments of the unorganised Labour in India. Their work is of temporary nature, the relationship between employer and the employee is temporary, working hours are uncertain. Majority of workers engaged in Building and Other Construction activities are migrants. As such they do not possess necessary documents required for registration, leading to less number of registrations. Moreover, either the contractors or the workers do not come forward for their registration. Basic amenities and welfare facilities provided to these workers are inadequate. Risk to life and limb is also inherent.

The Act has a noble objective of regulating the employment and conditions of service, safety and health and welfare measures for the construction workers by setting up a Welfare Fund at the State level for crediting thereto contribution made by beneficiaries and collection made out from levy of cess of 1% of the construction cost incurred by an employer on construction works. The Fund is to be used for providing financial assistance to the families of beneficiaries in case of accident, old age pension, housing loans, payment of insurance premia, children’s education, medical and maternity benefits etc. However, by not spending the money so collected for the purpose for which it was collected the governments – both at the Centre and the state – are doing great injustice to the construction workers.