SC Blasts Govt On ‘Rotten’ Construction Cess Collection System, Asks It To Treat Labour As Formal

SC Blasts Govt On ‘Rotten’ Construction Cess Collection System, Asks It To Treat Labour As Formal

SC Blasts Govt On ‘Rotten’ Construction Cess Collection System, Asks It To Treat Labour As Formal

It was in 1996 when Parliament passed the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, (BOCW Act) and the Building and Other Construction Workers' Welfare Cess Act, 1996, (Cess Act). Through the legislation, the government levied a one per cent cess on cost of construction. This money was to be used for the welfare of the workers employed in the informal construction sector. The Centre and states have made little effort to make sure the money collected through this levy did its intended job, says the Supreme Court (SC).

While directing the Centre and states to formulate model policy to bring construction workers in the formal fold within six months, the top court on March 19 said that it was quite shocking that even the Comptroller and Auditor general of India (CAG) did not have the figures on construction cess collection. “Whatever figures are available may not be reliable," an SC Bench added.

"If this constitutional body (CAG) does not have the required and accurate information, there is undoubtedly a financial mess in this area and this chaos has been existing since 1996. The only victims of this extremely unfortunate state of affairs and official apathy are construction workers who suffer from multiple vulnerabilities," it said.

While the construction sector workforce is about four-crore strong, only 1.5 crore of the workers have been registered. This means most construction workers are denied “what is constitutionally and statutorily due to them”.

On that note, the apex court directed the Centre and states to treat construction workers as formal sector staff and offer them all the benefits of social security, including minimum wages, pension and paid maternity leave.

No lack of funds

While pointing out that over Rs 37,400 crore has been collected for the benefit of construction workers in the name of construction cess over the years, the SC said only Rs 9,500 crore of that money had been used for their benefit.

“Why are millions of construction workers being denied the benefit of remaining Rs 28,000 crore,” the SC asked.

The SC said between April and June last year alone, Rs 5,000 crore was collected as construction cess .

"This is a huge amount and would work out to about Rs 20,000 crore on an annual basis. The figures presented to us by the CAG or even the standing committee do not reflect such a huge collection. Obviously, there is something terribly rotten with the collection and accounting mechanism, and it is quite clear that the exercise of registration, both of the establishments and of the construction workers, is not being carried out satisfactorily," the bench said.

With inputs from Housing News

Last Updated: Thu Mar 22 2018

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