Use Cess Fund to pay construction workers: Centre to states

In what could bring smile to construction workers in times of COVID-19, the Government has asked states to dive deep into over Rs 52,000 crore Cess Fund and transfer money to around 3.5 crore workers registered with authorities.

Union Labour Minister Santosh Gangwar wrote to all Chief Ministers and union territory administrators asking them to utilise the cess collected from builders, which is lying unutilised in the Building and Other Construction Workers Welfare Cess Fund, to provide relief to the workers.

He has asked them to transfer the funds in the account of construction workers through Direct Benefit Transfer (DBT) mode from the Cess Fund collected by the Labour Welfare Boards, an official statement said adding around Rs 52,000 crore is available with Welfare Boards and around 3.5 crore construction workers are registered with them.

Construction activities have come to a halt across the country due to lock-down, which has affected the livelihood of lakhs of daily wagers.

The Building and Other Construction Workers Cess Act, 1996, provides for the levy and collection of cess at 1% of the cost of construction. This cess is collected by States.

“The amount to be granted to the construction workers may be decided by the respective state governments and union territories. The financial assistance at this point in time would help to mitigate the financial crisis of our construction workers to some extent and boost their morale to deal with this epidemic,” Gangwar said.

On Monday, Congress president Sonia Gandhi shot off a letter to Prime Minister Narendra Modi raised the issue of the hardships faced by construction workers, saying over 4.4 crore people working in the sector are now faced with a "precarious future" with many stranded in cities and deprived of their livelihoods due to the stringent lock-down.

Emphasising that the Labour Welfare Boards collected cess amounting to Rs 49,688.07 crore till 31 March, 2019 out of which only Rs 19,379.92 crore were spent, she had said that the government could think of advising the Welfare Boards in the states to roll out emergency welfare measures, particularly wage support, to those who are in distress.

In August 2017, the Parliamentary Standing Committee had also raised similar concerns saying the Welfare Boards set up by states collected Rs 32,632.96 crore as cess towards the welfare of construction workers in 20 years, but spent only a dismal 23% or Rs 7,516.52 crore, which included Rs 375.82 crore towards salaries of the officials who run the state welfare bodies.

The report had said that Karnataka with 10.74 lakh registered workers had collected the highest cess, Rs 3,861 crore, but spent only 6.21% (Rs 240 crore). In contrast, its neighbour Kerala collected Rs 1,474.73 crore and spent Rs 1,455.88 crore.

“The committee is of the view that had the cess been collected/deposited fairly, it could run into crores of rupees,” it said. The committee also stated that the collection of cess from private bodies has “not been properly done”