‘Bulk of cess for construction workers welfare unutilized’

February 23rd, 2009 - 5:36 pm ICT by IANS  

New Delhi, Feb 23 (IANS) More than 75 percent of cess collected by state governments from developers in the past six years, meant for welfare measures for construction workers, remain unutilised, says a report by an industry lobby.
“Of Rs.1,353.92 crore (Rs.13.54 billion) collected, a meagre Rs.305 crore (Rs.3.05 billion) has been utilised for intended purposes,” according to the Real Estate and Construction Committee of the Associated Chambers of Commerce and Industry of India (Assocham).

“Cess of 1 percent was imposed through Welfare Cess Act 1996 of construction cost undertaken by developers and builders to ensure welfare of construction workers covering education of their children, medical expenses in case of sickness and provide them dwelling units, however, was notified in 2002 only for implementation by state governments,” said the report.

Until 2008, of the Rs.3.05 billion spent on workers’ welfare, Kerala accounts for more than 90 percent.

“State of Kerala collected a cess of Rs.254 crore from 2002-08, of which Rs.227 crore has already been spent towards welfare of its construction workers,” Assocham said.

Delhi, Haryana, Rajasthan, Kerala, Gujarat, Bihar, Karnataka, Andhra Pradesh, Tamil Nadu, Himachal Pradesh, Punjab, Orissa, Mizoram, Maharasthra and Uttarakhand have collected cess.

Delhi collected Rs.140 crore (Rs.1.4 billion) from builders has hardly utilised it has no workers registered with it, the report said.

Haryana, Karnataka, Gujarat and Bihar have respectively collected Rs.200 crore, Rs.75 crore, over Rs.80 crore and Rs.20 crore but provide no definite amount that these states spent on welfare of construction workers.

The other states account for the remaining Rs.6 billion (Rs.600 crore).

There are over 30 million construction workers in the country, with only 4,100,000 workers being registered with the labour boards of the various state governments.

“The Assocham is of the view that many of the states have not constituted their welfare labour boards and that is why the amount collected by states remains unutilised and rots in their coffer,” the chamber said.

“Since the builders and developers are in direct touch with their workforce, they can better make use of this amount,” it added.

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