Stagnant cess pool

There has been a complete failure to register even 25 per cent of the total construction workers in the country. Rs 28,000 crore is lying unutilised for years. Over Rs 37,000 crore has been collected under the Building and Other Construction Workers’ (BOCW) Cess Act over the last 11 years. Maharashtra is the worst performing state —it has spent only Rs 830 crore of the Rs 7,482 crore that has been raised since 2007. The dereliction of the welfare board is not only tragic but also makes a mockery of the well-being of construction workers. No wonder the Supreme Court (Madan B Lokur) judgment on the contempt of court petition no. 52/2013 questions the conduct of the state governments and Union Territory Administrations (UTAs): “Directions given by this Court from time to time to implement the two laws have been flouted with impunity… the BOCW Act has been disregarded by State Governments and UTAs. Hopefully, the gravity of the situation… will be realised by someone, somewhere and at some time”.

The construction industry is inherently unorganised, decentralised and transitory, with the majority of workers being in migratory and non-permanent employment. There exists a multi-step, graded sub-contracting system starting from the developer down to the last labour contractor at the site.

In view of this, Parliament enacted two laws — Building and Other Construction Workers Act in 1996 and Building and Other Construction Workers’ Welfare Cess Act, 1996 (the BOCW Acts). The purpose was to provide workers protection and welfare benefits, which included safe working conditions. The latter act (Welfare Act) imposed a cess at the rate of 1 per cent on the construction cost incurred by the builders on each new project. The funds raised through this cess was to be handed to state-level Building and Other Construction Workers Welfare Boards, set up as per the said Act. Maharashtra approved this act in 2007.

However, there has been a total failure in the implementation of these two acts. In this context we can see a clear contradiction between the processes of cess collection and its expenditure. On the one hand, it is mandatory for the builder to pay the cess at 1 per cent of the construction cost towards the welfare of the workers employed by him, before the commencement of any construction. On the other hand, enrolment with the board — which is the minimum eligibility for welfare schemes as well as any compensation in case of accidents — is left to the worker. Builders or employers or the board have no responsibility or liability to enrol the workers as members. Contrast this with similar beneficial legislations like Provident Fund or ESIS, where both the registration of a worker as well as the employer’s contribution are compulsory. The same compulsory enrolment and inclusion provision must be introduced for membership of welfare boards for construction workers.

Finally, this is precisely the reason why the construction workers who died in Pune have been deprived of welfare benefits, despite their employer-builders having paid the required cess at the rate of 1 per cent of the cost of construction.

The Welfare Act provides that the administrative expenditure should not exceed 5 per cent of the expenditure incurred on welfare. Imposition of such limits, though justifiable, are absolutely misconstrued in application. This is because an elaborate administrative setup has to be in place prior to the enrolment of prospective beneficiaries from among such a huge and unorganised set of workers, and the extension of any welfare schemes to them. Maharashtra has 29 such schemes on paper. These require a large amount of paperwork and monitoring to prevent undeserving elements from taking undue advantage of the schemes. Prior establishment of a proper machinery is a pre-condition, even for minimal implementation of any welfare scheme for beneficial legislation.

Abhyankar is a CITU office bearer and CPI(M) Maharashtra state committee member. Chakraborty is studying at Symbiosis College of Liberal Arts, Pune