Coronavirus: States asked to use Rs 31,000 crore balance from building and construction workers’ fund

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Earlier this week, the Labour Ministry had directed states and Union Territories to use the cess proceeds to the tune of Rs 52,000 crore. (File Photo)

The Centre has asked states to use funds of around Rs 31,000 crore in their respective state construction worker welfare funds under the Building and Other Construction Workers’ Welfare Cess (BOCW) Act to mitigate the impact of COVID-19 pandemic for 3.5 crore registered workers.

Earlier this week, the Labour Ministry had directed states and Union Territories to use the cess proceeds to the tune of Rs 52,000 crore.

The difference in amount utilisation has surfaced because the respective state governments have already earmarked some amount from the total funds of Rs 52,000 crore for expenditure and welfare of construction workers as per the existing rules for the welfare boards, an official said.

“Rs 31,000 crore is the amount which state governments have been asked to spend for this (COVID-19) purpose,” the official added.

The on-ground benefit to the construction workers will depend on the states devising their respective welfare schemes to utilise the cess proceeds. However, the coverage will be limited to only registered 3.5 crore construction workers.

As per labour experts, over 1-1.5 crore construction workers are estimated to be unregistered, leaving them out of the coverage of this announcement.

The latest available government data for state-wise breakup of the registered building and other construction workers shows Uttar Pradesh having the highest share of such workers at 48.5 lakh, followed by West Bengal at 31.01 lakh.

According to the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, a cess is levied and collected at the rate of 1 per cent of the cost of construction by the state governments.

The states, through their respective State Building and Other Construction Workers Welfare Boards, constituted under the BOCW Act, utilise the cess fund as per Section 22 of BOCW Act, 1996.

Section 22 of the BOCW Act states that the Building and Other Construction Workers’ Welfare Board can provide assistance to a beneficiary in case of an accident; give pension to those who have completed the age of 60 years; sanction loans and advances to a beneficiary for construction of a house not exceeding such amount and on prescribed terms and conditions pay premia for group insurance scheme of the beneficiaries; give financial assistance for the education of children of the beneficiaries, for medical expenses for treatment of major ailments, payment of maternity benefits and make provision and improvement of such other welfare measures and facilities as may be prescribed.

Further, the Board may grant loan or subsidy to a local authority or an employer in aid of any scheme approved by the respective state government for the welfare of building workers in any establishment.

Every construction worker who has completed eighteen years of age, but has not completed sixty years of age, and who has been engaged in any building or other construction work for not less than ninety days during the preceding twelve months shall be eligible for registration as a beneficiary under this Act.

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