CAG flags under-utilisation of welfare fund for construction workers

Ahmedabad, Sept 10 (PTI) The Gujarat government collected a welfare cess of over Rs 4,700 crore from developers in 16 years until 2023. However, the actual utilisation of funds for the welfare of workers through a board mandated by law, remained only Rs 808 crore or 17 per cent of the total cess.

This finding was flagged in the audit report of the Comptroller and Auditor General of India (CAG) tabled in the legislative assembly on the last day of the monsoon session on Wednesday.

The 'performance audit on the welfare of building and other construction workers for the period 2017-22' stated that due to non-constitution of the Welfare fund, the proceeds of the cess got deposited in a government account, and a large portion of it remained unspent.

It stated that the Centre had enacted the Building and Other Construction Workers (Regulation of Employment and Conditions of Services) Act in 1996 to regulate the employment and service conditions of BOC workers and to provide for their safety, health, and welfare measures.

Section 18 of the BOCW Act stipulates that the constitution of the State Welfare Board (SWB) to provide financial assistance or loan to the eligible registered workers.

The Building and Other Construction Workers Welfare Cess Act 1996 or the Cess Act, was also brought in 1996 to augment the resources of the Board.

The Cess Act provides for the levy and collection of a cess at such rate not exceeding two per cent but not less than one per cent of the cost of construction incurred by an employer.

As per the BOCW Act, the State Welfare Board shall consist of a chairperson, a person to be nominated by the Centre, and members not exceeding fifteen, provided that the board shall include an equal number of members representing the state government, employers, and the building workers.

Initially, the board was constituted by the state government in December 2004, and thereafter it was reconstituted from time to time.

"However, since 2017, a single-member board had been functioning without representatives of the employers and the workers as of March 2022", the CAG stated.

Section 24 of the BOCW Act stipulates that the Board shall constitute a Building and Other Construction Workers' Welfare Fund (Welfare Fund). The audit observed that the board had not constituted the welfare fund.

In the absence of the welfare fund, cess collected by the cess collectors in Gujarat was deposited in the government account, according to the CAG.

"The audit observed that due to non-constitution of the welfare fund, the proceeds of the cess collected by the cess collectors in the state were being deposited in the government account. During 2006-07 to 2022-23, Rs 4,787.60 crore towards cess was deposited," the report mentioned.

As of March 2023, out of Rs 4,787.60 crore, the state government released a grant of Rs 2,544.81 crore (53 per cent) to the board, and the remaining Rs 2,242.79 crore (47 per cent) was lying with the state government, the report stated.

Against the grant of Rs 2,544.81 crore provided by the state government, the board could utilise only Rs 808.49 crore, which comes to around 17 per cent of the total cess of Rs 4,787.60 crore, said the report.

As of March 2023, Rs 1,736.32 crore was lying unutilised with the board, it said.

Ahmedabad Municipal Corporation had not deposited cess amounting to Rs 72.06 crore, collected between March 2021 and March 2022, into account while Gandhinagar Municipal Corporation (GMC) had never deposited any cess since its establishment in March 2010, said the report.

Following the audit in 2023, GMC accounted Cess collected for the year 2018-23 and deposited Rs 27.52 crore into the government account, the report mentioned.

Moreover, the board had not conducted a state level survey for the identification of BOC workers. Further, the board had not prescribed a time limit for the disposal of applications received for registration of construction workers.

Joint field visits of the 50 selected construction sites revealed several deficiencies in compliance of norms related to health, safety, and welfare measures for workers.

They include non-availability of overhead protection, eye protection, head protection, fire extinguishing equipment, lack of preparedness to handle medical emergencies, and non-providing of temporary living accommodation, the report said.

Of the 31 welfare schemes being operated by the board during 2017-22, 13 welfare schemes (42 per cent) were closed or put on hold by the board/state government during 2017-22.

One of the main functions of the board is to provide an old age pension to beneficiaries who completed 60 years of age. However, the Old Age Pension scheme was kept on hold from May 2019, the CAG observed.

The CAG recommended that the Gujarat government may take appropriate action for the constitution of a full-fledged Board, as envisaged in the BOCW Act, 1996.

"State Government may establish BOC Workers Welfare Fund and evolve a mechanism for transferring the cess, collected by the Cess Collectors, directly to the Board," the national auditor suggested. PTI PJT PD NSK