It is an election year in Punjab and lollipops are being distributed. Construction workers too got one – a Rs 3,100 Diwali gift. However, they will draw this from their own pocket – the Building and Other Construction Workers Welfare Cess Fund. Tossing norms and Supreme Court directions, arbitrary extravagant announcements for vote- bank politics, shoddy registration of workers, deficient collection of cess, corruption and government apathy have shaken the foundation of the social security arrangement for unorganized construction workers to the extent that it may soon collapse if careful and compassionate attention is not paid, writes MOHIT SINGLA from Nabha (Patiala).
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TODAY is the 107th birth anniversary of the architect of the Building and Other Construction Workers Welfare Cess Act, 1996 (BOCW Act). The benefactor of numerous forgotten and voiceless people, Justice V.R. Krishna Iyer invested over a decade towards the enactment of the law to ensure social security to the unorganized and thus voiceless construction labour force. Wary of apathy in powerful corridors, the doyen of civil liberties and human rights, Justice Krishna Iyer was shrewd enough not to rely on governments for arrangement of funds, and thus created the provision of cess fund in the law.
After his retirement from Supreme Court in 1980, Justice Krishna Iyer, along with renowned socialist thinker and activist Surendra Mohan (who was a Rajya Sabha MP from 1978 to 1984) worked rigorously towards the formation of the BOCW Act, which was cleared by the Parliament in 1996. However, ten years later, the retired judge had to knock at the doors of the Supreme Court in 2006 for the proper implementation of the Act through an NGO founded by him – the National Campaign Committee for Central Legislation on Construction Labour (NCC-CL).
Unfortunately, both of the reformists could not live long enough to see the desired implementation of the law. Even after 25 years of enactment, the law is still longing for the executive fervour needed to efficiently implement it and serve the unnoticed contributors to nation building and the economy – construction labourers.
The state of Punjab did not even frame rules under the BOCW Act for 12 years after its enactment. The state woke up only after the NCC-CL petition was filed at the Supreme Court in 2006, and framed rules in 2008. In Punjab, the Act came into effect only in 2009.
Eyeing the upcoming elections in Punjab, the pompous announcement of Rs 3100 as festival gift to the 3.17 lakh currently registered BOC workers (which total only 15-20% of total work force in the state) will cost between Rs 90-100 crores of the BOCW cess fund, whose meagre annual collection remains between Rs 150 – 200 crores, as per official records. Notably, the fund is supposed to provide health, education and other benefits to the 15 – 20 lakh construction workers in the state.
With Section 22 of BOCW Act listing the functions of BOCW Welfare Board, which include mandatory schemes like pension, sanctioning loans, medical treatment benefits, help in crisis like accident, education of children, and maternity benefits, governments are often seen exploiting clause (h) of this section, that allows state boards to frame additional schemes which they feel necessary for the welfare of the workers.
The state of Punjab did not even frame rules under the BOCW Act for 12 years after its enactment. The state woke up only after the NCC-CL petition was filed at the Supreme Court in 2006, and framed rules in 2008. In Punjab, the Act came into effect only in 2009.
While applications from many genuine workers for availing these benefits remain pending for over two years, in violation of Supreme Court directions which mandate the delivery of benefits within six months, irregular payments amounting to 4.4 crore rupees were made to over 5,000 ineligible workers. The Comptroller and Auditor General of India (CAG) flagged numerous such irregularities in its report tabled in the Punjab legislative assembly last year.
Irregularities flagged in CAG report
Even in the small sample size taken by CAG to scrutinize the board’s 2013-2018 records on directions of the Supreme Court, the auditor raised anomalies worth crores of rupees. The survey on various aspects of the Act was done in one to six districts of Punjab
The audit found that around Rs 2.6 crore ex gratia benefits were disbursed either to non-eligible workers or those who were not even construction workers.
The CAG found irregularities in distribution of over Rs 38 lakhs in the Shagun scheme (as per which Rs 21,000, later upgraded to Rs 31,000 were given at the time of marriage of the daughter of a construction worker). This scheme was aggrandized to Rs 51,000 as per poll promises during elections last time.
The authorities did not even care for sanctioning Rs 8.06 lakhs for the marriage of 26 minor girls in contravention of the Prohibition of Child Marriage Act.
Finding irregularities in almost every scheme, including funeral scheme, cycle distribution, maternity benefits, education benefits, leave travel concession, medical treatment benefits, pension schemes, and so on, the CAG came across gross irregularities, such as the sanctioning of education fees of wards of 378 workers for same class multiple times in different years.
Out of 427 randomly checked beneficiaries for education benefits, 43 were found not to be construction workers.
Despite so many irregularities highlighted by the CAG, no inquiry or action against any official has taken place so far.
Other allegations of anomalies
On the basis of information derived under the Right to Information Act in 2018, an NGO, Centre for Social Change and Equity (CSCE) raised the suspicion of illegal back date registration of workers (or perhaps non-workers). It complained about ex gratia benefits being given against the norms to 64 workers’ nominees who had died within three months of registration in BOCW in Sangrur district, while nine others were registered after death. Similarly, 15 registrations were done after the marriage of their daughters, and the sum under the Shagun scheme was delivered to these beneficiaries.
Despite so many irregularities highlighted by the CAG, no inquiry or action against any official has taken place so far.
Then Principal Secretary, Labour, Sanjay Kumar had ordered an inquiry, terming it a serious allegation against Assistant Labour Commissioner, Sangrur. However, the inquiry is still pending. State Special Chief Secretary, Labour Ravneet Kaur demanded time to respond to the queries (which will be uploaded when the response comes).
Adding to the list, benefits for hundreds of beneficiaries worth Rs 46 lakhs were transferred into four bank accounts in Ludhiana district in 2017. Four outsourced employees were booked in the case, while four others were under suspicion. In 2020, the welfare board raised suspicion on the role of another employee and asked police to probe her role. However, she continues to hold her post, and the investigation is still pending in the case.
Labour rights activities also criticize the state board for burdening the BOCW welfare fund with the government’s duty of saving girl child. Rs 51,000 are paid from this fund under the Balri birth gift scheme to construction workers on the birth of a daughter.
Meanwhile, it’s not just Punjab that constructs such schemes using section 22(h) of the BOCW Act. Therefore in March 2018, the Supreme Court had asked the central government to make a composite model of welfare schemes, and approved a model in October 2018.
Incorporating suggestions from the states, the model welfare scheme listed out schemes which must be rolled out at priority. After delivery of these schemes, if funds allow, states may bring out more schemes under section 22 (h). But Punjab continues its schemes, and keeps on adding schemes under this clause, without budgeting and reviewing the projections of following years’ requirements.
“While Punjab is forming such extravagant schemes, it must implement the Supreme Court-approved model welfare schemes on maternity benefits, which suggest paying minimum wages for a minimum three months to women construction workers. Here, Punjab is paying only Rs 5,000 as total benefit” said Sunita Kaidupur, a local activist.
Poor registration continues to keep the workers bereft of their rights.
Last month, three construction workers died in Nabha due to a lightning strike while they were at work. Had they been registered, their families would have received Rs 4 lakhs each under ex gratia scheme.
Over 20 lakh construction workers, including migrant workers, are estimated to contribute to the Punjab economy through their labour. In 2018, the labour department had issued directions to register 15.33 lakh construction workers in the state under the BOCW Act. Till 2018, the labour department had registered about 7.48 lakh workers but only 3.17 lakh workers continue their subscription to the board, which costs only Rs 10 per month.
“This phenomenon raises doubts regarding the quantum of fake registrations, which discontinue the subscriptions after availing benefits. as highlighted by the CAG and NGOs” said Gurmeet Singh Thuhi, a labour rights activist.
In order to improve registration, the Supreme Court in its 2010 order directed state governments to ensure that government contractors have their labourers registered. In 2014, the state government’s labour department barred other departments from making payments to contractors until verifying that all of their labourers are registered in the BOCW act. The deputy secretary of the welfare board casually replied to a complaint of non-compliance last month, and said they will furnish the directions again.
“Registration remains poor because more registration will force more demand of benefits from genuine workers, and the scope of leakage will fall short which will hurt corruption and middlemen” said Vijay Walia of CSCE, who has suggested to the department multiple ways to improve registration, but to no avail.
Poor cess collection and other violations
The BOCW Act mandates 1 per cent BOCW cess on the total construction cost. Annual cess collection of Punjab has ranged between Rs 150 – 200 crores in the past eight years which is quite stunted as per activists and the Supreme Court as well.
Despite repeated appeals by NGOs, the department has been lax in collection of cess. CSCE had to struggle numerous times to move the labour department for collection of cess from marriage palaces, schools, religious buildings, bungalows and farmhouses in rural regions. The major source of cess collection is government projects.
“Cement consumption in the state is above Rs 8,000 crores; if we calculate cess on this alone, it comes to Rs 80 crores. If we add the value of iron and other metals, roads, glass, furniture, brick, sand, labour, sanitary products, paint, electricals, and so on, the cess collection would cross 1,000 crores annually” calculated activist Gurmeet Singh.
Under the ex gratia scheme, the family of a worker fulfilling the criteria would get Rs 3 lakhs in case of natural death of a worker or Rs 4 lakhs in case of accidental death. As per CAG audit, the state board spent Rs 25.4 crores in five years (nearly Rs 5 crores per year) in just six districts out of 23.
Now, as per model welfare schemes adopted by Punjab in 2019, instead of paying benefits directly, the state board should pay Rs 189 per live registered worker to insurance companies and the same will be contributed by the central government. If we calculate this on the 3.17 lakh registered workers, the total cost of the scheme for the state board would be less than Rs 6 crores per annum at current rate of live registration.
Interestingly, the state board continues to disburse this ex gratia benefit directly. Activists allege that this serves middle men and corrupt officials.
In another violation of SC directions, raised by CAG, Punjab BOCW welfare fund was used for construction of schools and training centres. The construction was halted after intervention from the union government, but 48 crore rupees spent on the construction is yet to be recovered by the board. Rather, the board meeting is going to be held on November 29 in which one of the agendas is to approve the further construction of these stalled projects.
Activists and labourers are concerned that the Act will meet a slow death at the given rate of ‘half-hearted’ cess collection in the state and the arbitrary spending.
CSCE has repeatedly raised objections on rolling out schemes and incurring expenditures without approval from the welfare board as per law. “The chairman of the board has no administrative and financial powers, yet all the decisions are taken arbitrarily and illegally” said Walia. In the agenda notice for November 29, at least 17 such decisions and expenditures are to be approved which have been already implemented in the past.
Activists and labourers are concerned that the Act will meet a slow death at the given rate of ‘half-hearted’ cess collection in the state and the arbitrary spending, since it will not be possible to support benefits at a sum as low as Rs 1,000 per worker per annum if and when all the 15 – 20 lakh workers are registered and brought in the ambit of this social security arrangement.
(Mohit Singla is an independent journalist based in Nabha, Patiala. The views expressed are personal.)
