AHMEDABAD: The Gujarat government has collected over Rs 4,700 crore as a welfare cess from developers over the past 16 years, until 2023. However, only Rs 808 crore, or 17%, has been utilized for worker welfare through a legally mandated board.
This issue was highlighted in the audit report from the Comptroller and Auditor General of India (CAG), which was presented in the legislative assembly on the last day of the monsoon session.
The ‘performance audit on the welfare of building and other construction workers for the period 2017-22’ indicated that the absence of a Welfare Fund resulted in the cess proceeds being deposited into a government account, much of which remained unspent.
The Centre introduced the Building and Other Construction Workers (Regulation of Employment and Conditions of Services) Act in 1996 to oversee employment conditions and provide safety, health, and welfare measures for BOC workers.
Section 18 of the BOCW Act mandates the creation of a State Welfare Board (SWB) to offer financial assistance or loans to registered eligible workers.
The Building and Other Construction Workers Welfare Cess Act, also enacted in 1996, aimed to enhance the Board’s resources through a cess levied at a rate between 1% and 2% of the construction costs incurred by employers.
According to the BOCW Act, the State Welfare Board is to have a chairperson, a representative from the Centre, and up to 15 members, ensuring equal representation from the state government, employers, and workers.
The initial board was formed by the state government in December 2004 and has undergone several reconstitutions since then.
However, as of March 2022, the CAG reported that a single-member board has been operating without input from employer or worker representatives since 2017.
Section 24 of the BOCW Act requires the establishment of a Building and Other Construction Workers’ Welfare Fund (Welfare Fund), yet the audit noted that this fund had not been created.
Consequently, the cess collected in Gujarat has been deposited in a government account. The report noted that between 2006-07 and 2022-23, Rs 4,787.60 crore was deposited as cess.
By March 2023, the state government released Rs 2,544.81 crore (53%) to the board, with Rs 2,242.79 crore (47%) remaining with the state, according to the report.
Out of the Rs 2,544.81 crore granted by the state, the board managed to utilize only Rs 808.49 crore, which is around 17% of the total cess collected of Rs 4,787.60 crore. As of March 2023, Rs 1,736.32 crore remained unutilized with the board.
The Ahmedabad Municipal Corporation failed to deposit Rs 72.06 crore in cess collected from March 2021 to March 2022, while the Gandhinagar Municipal Corporation (GMC) has not deposited any cess since its establishment in March 2010. Following the 2023 audit, GMC accounted for cess collection for 2018-23 and deposited Rs 27.52 crore into the government account.
Moreover, the board has not conducted a statewide survey to identify BOC workers and has not set a timeline for processing registration applications for construction workers.
Visits to 50 selected construction sites revealed numerous deficiencies in health, safety, and welfare compliance, including the lack of protective equipment and emergency medical preparedness, alongside inadequate temporary living accommodations for workers.
Of the 31 welfare schemes operated by the board between 2017-22, 13 schemes (42%) were closed or paused during this period.
One key responsibility of the board is to provide old age pensions to beneficiaries who reach 60 years of age. However, the Old Age Pension scheme has been on hold since May 2019, as noted by the CAG.
The CAG recommended that the Gujarat government take appropriate steps to establish a fully integrated board, as outlined in the BOCW Act, 1996. The report suggested that the state should create a BOC Workers Welfare Fund and develop a mechanism to directly transfer cess collected by cess collectors to the board.
