Construction Worker Welfare Cess ‘Being Frittered and Defalcated’, Says Supreme Court

“We may note that huge amounts have been collected in the region of Rs 29,000 crores and not even 10% has been spent for the benefit of construction workers,” the court said.

Supreme Court in New Delhi. Credit: PTI

Supreme Court in New Delhi. Credit: PTI

New Delhi: An affidavit filed on behalf of the Comptroller and Auditor General of India (CAG) in the Supreme Court has revealed the manner in which a cess collected under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, for the welfare of workers has been improperly utilised.  

The CAG filed its affidavit on October 10, after the Supreme Court directed it to find out where the amounts, running into several crores, collected as cess under the Act since 1996, vanished.  

A Supreme Court bench of justices Madan B Lokur and Deepak Gupta, in its order, noted that the CAG affidavit shows “expenditure having been incurred for payment of entry tax/value added tax; expenditure incurred for purchase of washing machines for construction workers; expenditure incurred for purchase of laptops for construction workers etc”.

“This is really astonishing; It is quite obvious from the above that the amounts are just being frittered away and if not defalcated by the concerned Welfare Boards”, the bench recorded in its order.

The bench also found that huge amounts have been spent towards administrative expenses while the statute permits only 5% expenditure for the same.

“The Act is clearly being misused in the sense that the beneficiaries are the construction workers but they are not being given the benefits that they are entitled to in accordance with law but the money collected is being diverted to the Welfare Boards or the State Governments for purposes that have nothing to do with the benefits of construction workers”, the bench further recorded.

The bench added: “We may note that huge amounts have been collected in the region of Rs.29,000 crores and not even 10% has been spent for the benefit of construction workers.  The amounts, whatever has been spent, appear to have been spent for the purposes other than for the benefit of construction workers”.

To get to the bottom of this, the bench has summoned the secretary from the labour ministry on November 10, to understand how the Act is being implemented and why it is being misused if not abused to the detriment of the construction workers.  The bench made it clear that the next date of hearing will not be changed.

The public interest litigation (PIL)  in this case has been filed in 2006 by  an NGO, ‘National Campaign Committee for Central Legislation on Construction Labour’, which has alleged that statutory cess levied from real estate firms for the welfare of construction workers is not being utilised properly as there is no mechanism to identify the beneficiaries and for extending the benefits to them. The petition has also prayed that the rules and regulations relating to the health, safety and welfare of the workers should be framed and safety equipments including safety harness and safety nets should be provided to them at the place of work.

The petition has named the Centre and all the states and union territories as the respondents.  

The Supreme Court’s continuing monitoring of the case has brought out the wide gaps between the intentions of the legislations enacted for the welfare of the construction workers and their actual implementation.  

In 2009, a three-judge bench of the Supreme Court held in its order that “urgent steps are to be taken so that the benefits of this legislation shall not go waste.  Otherwise, the unorganised workers of the construction sector will be denied the benefit of the Act”.  

Eight years since, the legal crusade is still continuing to ensure that the Act benefits those it intended to.

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