Cess on construction projects to aid workers
The draft National Housing and Habitat Policy 2005 has reportedly proposed a cess on all construction projects. The main emphasis of the policy is on using such contributions for educating the construction workers and improving their skills. Though the policy document is yet to be put up on the public domain the response to the proposal is mixed.
"We welcome any such move as long as the amount of cess levied is reasonable," said a spokesperson from Nandi Infrastructure Corridor Enterprise Ltd. But he added that the problem was mainly with the implementation of any such welfare schemes. There should be an adequate policy protection to implement the project. "If our workers are trained/skilled, our productivity will go up and it is beneficial to us," he added.
But the policy pronouncement is still not clear as there is already an existing cess as per the Building and Other Construction Workers' Welfare Cess Act, 1996, according to Raju John, Executive Secretary, Builders' Association of India. As per the act a cess of one to two per cent is to be levied on all construction projects and the act makes individual states responsible for the implementation of the policy. "So far only six states have formulated policies and constituted welfare boards for implementation and even Maharashtra is only now framing rules for enforcement of the cess," he says.
There are over three crore construction workers in the country and they constitute the major portion of unorganised workers. Close to 60 per cent of them fall under the unskilled labour category. It was almost after a decade of protests and representation the workers got reprieve in the form of two acts enacted in 1996, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; and the Building and Other Construction Workers' Welfare Cess Act, 1996.
Kerala, which already had a welfare board and a pre-existing legislation, progressed faster in registration of workers and collection of funds rose rapidly after 1996. Even there it was the trade unions that did most of the work and even they found collection of cess from certain quarters like contractors of Central and state governments difficult as per an ILO research paper.
Tamil Nadu chose to levy a cess that was lower than the minimum one per cent the act proposed and it has shown a contribution of Rs 26.3 crore during 2004 to the welfare fund. Registration of workers with a nominal fee of Rs 25 moved up by 1,11,031 taking the total number up to 6,30,812 as on December 31, 2004. Total disbursements towards various needs amounted to Rs 6.4 crore to 22,562 workers.
The Delhi government got into the act much later and even now the progress is slow. From the time the act came into effect in 2002, to 2004, not a single worker registered with the construction workers board as a beneficiary, according to report from an NGO.
The National Commission for Women, which had brought out a paper on the status of women workers in the construction industry, says the cess should have yielded a collection of over Rs 100 crore by now, given the scale of construction activity in the capital.
One of the main reasons cited for poor collection of cess is that it is being collected by the labour department instead of the local authority sanctioning construction projects.
[26 September 2005]