Cess on construction not collected properly: Par Panel

States collected Rs 32,632.96 crore as cess for construction workers’ welfare in 20 years but a Parliamentary panel has expressed doubts that this amount does not match with the building activities carried out so far.

Of this, a dismal 23% (Rs 7,516.52 crore) has been spent, which includes Rs 375.82 crore as salaries for officials who run the state welfare bodies. As per the Building and Other Construction Workers Act 1996, 1% of total construction cost could be collected as cess to fund workers in case of an emergency.

A report by Parliamentary Standing Committee on Labour headed by BJP MP Kirit Somaiya has articulated the huge mismatch in the collection of cess as well as spending.

India Economy

For example, Karnataka with 10.74 lakh registered workers had collected the highest cess Rs 3,861 crore but spent only 6.21% (Rs 240 crore). In contrast, its neighbour Kerala collected Rs 1,474.73 crore and spend Rs 1,455.88 crore.

Haryana, which has a construction hub Gurugram near Delhi, collected just Rs 1,847.05 crore and spent only Rs 172.07 crore. Gujarat collected Rs 1,564.64 crore but expenditure is only Rs 35 crore or 2.23%.

Raising questions of Ministry of Labour and Employment’s cess figures till March 31, the panel said it “does not match with the construction activities carried out” in the past 20 years after the promulgation of the Act. It wondered whether these figures could be that of central agencies like Railways and National Highway Authority of India among others and not that of state.

The Committee are of the view that had the cess been collected/deposited fairly, it could run into crores of rupees,” it said. Going by the figures, it also said, the collection of cess from private bodies has not been “properly done”.

The committee are astonished to note that no efforts have been made to compare the collected cess futures with the total construction activities carried out in the respective state,” it said.

**************************************************************************

State

No of registered workers (in lakh)

Cess Collected

(in Rs crore)

Amount Spent

(in Rs crore)

Uttar Pradesh

32.14

2,943.80

598.90

Haryana

6.71

1,847.05

172.07

Tamil Nadu

26.45

1,706

600.00

Kerala

15.63

1,474.73

1,455.88

Karnataka

10.74

3,861

240.00

Bihar

Gujarat

7.74

4.54

921.92

1,564.64

75.23

35.00

All India

2,58,17,780

32,632.96

7,516.52

**************************************************************************

When it came to spending, the panel said salaries and allowances accounted for 5% of the expenditure from cess. Actually, only Rs 7,140 crore has been spent on the welfare of workers and recommended that the expenditure should not be mixed with the spending on workers’ welfare.

The committee said that the utilisation is “very poor” as there was no fool proof system developed by the states.

(An edited version appeared in Deccan Herald on Aug 14, 2017)

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