BOCW Act | Labour Welfare | Unutilised Cess Funds

₹70,744 Crore in Cess Funds for Construction Workers Remain Unutilised: RTI Reveals Glaring Welfare Gap

A Right to Information (RTI) query has revealed a disturbing reality — despite decades of cess collection under the Building and Other Construction Workers (BOCW) Act, a massive ₹70,744.16 crore remains unutilised. These funds were meant to support millions of construction workers across India with housing, healthcare, and social security.

🏗️ The BOCW Act: A Welfare Promise

• Enacted in 1996, the BOCW Act aimed to regulate working conditions and ensure welfare for construction workers.
• Mandated creation of state-level welfare boards to oversee benefits and schemes.
• Funded through a 1%–2% cess on construction costs levied from employers.

💰 Cess Collection vs. Utilisation

• Total Cess Collected (2005–2023): ₹1,17,507.22 crore
• Utilised for Worker Welfare: ₹67,669.92 crore
• Unutilised Funds: ₹70,744.16 crore

➡️ Only 57.6% of the collected cess has reached the workers it was intended to support.

🔍 State-Level Insights

• Maharashtra:
  • Cess Collected: ₹19,489.25 crore
  • Utilised: ₹13,683.18 crore
  • Gaps in data and suspected cess evasion by employers.
• Kerala:
  • Recognised for better implementation of BOCW Act provisions.
  • More consistent disbursement of welfare benefits.

😷 COVID-19 & the Construction Workforce

• The pandemic amplified vulnerabilities of construction workers.
• Mass migrant exodus during lockdowns exposed the failure of welfare delivery.
• Delays and inefficiencies in fund disbursement left workers without essential support during crisis.

⚠️ Policy Shifts & Concerns

• The proposed Code on Social Security may:
  • Dilute cess collection, making it less statutory.
  • Shift welfare from a right to a discretionary facility.
  • Risk further erosion of construction workers’ entitlements.

🚨 Key Challenges

• Poor fund utilisation and administrative delays.
• Under-registration of workers across states.
• Lack of digital tracking or real-time monitoring of cess usage.
• Attempts in some states to divert funds for other purposes.

🛠️ The Way Forward

• Reconstitution of welfare boards in all states with proper accountability.
• Mandatory digital registration and tracking systems.
• Empower workers’ collectives and unions to monitor implementation.
• Clear guidelines to prevent fund diversion and ensure direct benefit transfer to workers.

This post shines a light on a system that needs urgent reform — where laws exist, but welfare remains out of reach. Let’s rebuild with justice, not just cement.