Are the Centre’s welfare measures for daily wagers effective or mere paper tigers?

With lakhs of bogus workers registered and the welfare boards sitting on thousands of crores of unused funds, migrant workers aren’t the real beneficiaries of these schemes.
Are the Centre’s welfare measures for daily wagers effective or mere paper tigers?
Are the Centre’s welfare measures for daily wagers effective or mere paper tigers?
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Earlier this year, the Supreme Court’s judgment, delivered by Justices Madan Lokur and Deepak Gupta was hailed as coming down heavily upon the lethargy and apathy that plagues welfare boards for construction workers across states.

Vide their judgment, the judges directed the state welfare boards to strengthen their machineries for registering construction workers and the collection of cess from the construction sites. They directed the Union government to formulate a model welfare scheme that could thereafter be emulated by the state welfare boards. They also directed the Central as well as state governments to conduct a social audit of the implementation of Building and Other Construction Workers Act, 1996, (BOCW) on the lines as has already been done for MGNREGA, so that the law and its implementation could be strengthened to the benefit of the construction workers.

In this piece, we focus on the finer aspects of the judgment and talk to the man, Subhash Bhatnagar, who petitioned the Supreme Court to hear the case of construction workers.

Subhashji is now in his sixties and is brimming with energy and optimism. His entire life has revolved around working for the welfare of construction and domestic workers. Both sets of workers belong to the informal sector, i.e., where there is no permanent employer-employee relationship and no strict demarcation between the self-employed and wage-employed. In the absence of a permanent employment relationship, it becomes difficult and unsustainable for the workers to be vigilant about their rights.

Thus, in 1980s, Subhashji began conceptualising and lobbying for a national body that would directly employ the crores of construction workers, which would play the role of nodal agency for the builders and constructors to approach whenever they would want to hire labour. Thus, the National Campaign Committee for Central Legislation on Construction Labour (NCC-CL) came into existence.

Such a concept would have provided, says Subhashji, the much-needed end to the free market conditions in the construction labour industry, which has only led to an over-exploitation of workers through the rungs of contractors/munshis and no check over the builders. It would have put an end to the ‘footloose’ (migrant) labour conditions. Employers/contractors would have been unable to herd workers from other parts of the country for construction activities, so that the demands for bare minimum wages and humane terms of employment could be browbeaten effortlessly.

 The employers/contractors, prefer to keep this class of workers footloose so that they remain vulnerable, and they never develop a consciousness nor an understanding of their rights. In 1996, efforts of NCC-CL led to the enactment of Building and Other Construction Workers Act and its sister legislation, Building and Other Construction Workers Cess Act.

The Act conceptualised the setting-up of Welfare boards for construction workers in each state that would register the construction workers, collect cess from the construction sites and utilise the cess funds for the welfare of the workers and their families.

The apathy post 1996

The liberalisation and globalisation of 1990s saw not only the workers being left behind, but also their issues getting sidelined in the mainstream discourse. The governments too turned a cold shoulder towards labour and inequality issues, as they rushed to shore up GDP growth rates and private investments. Even 10 years after the law had been enacted, the state governments did not set-up the welfare boards adequately and were noted as not utilising the cess being collected for the workers. This led to the NCC-CL petitioning the Supreme Court and, in 2009, they were able to obtain binding orders for setting-up the welfare boards, complete with registering officers and proper mechanisms to collect cess.

The boards having been set-up, still saw their essential functions as optional and dispensable. Thus, Subhashji through NCC-CL filed a contempt petition, so that the boards would finally start registering the actual construction workers, assess and collect the correct amounts of cess from each construction establishment within the state, frame rational welfare schemes, and make it convenient and accessible for the registered workers to avail the schemes.

Aside from the apathy, it is also the landscape of the industry which poses a challenge to the boards’ functionaries, says Subhashji.

The footloose nature of construction labour market poses a major challenge, as a migrant worker does not stays in their home state, where they may be registered, to follow-up and avail the welfare schemes for the education of their children, marriage grants or maternity benefits.

 Then, there is also no incentive or mechanism in place for the destination states to provide these workers benefits of the schemes on behalf of their home states. The workers end up migrating from one state to another as soon as the construction project they have been engaged for is completed. Registration requires both an upfront payment of fees and an annual renewal fees. Thus, it also makes zero economic sense for the worker to register themselves with each state’s welfare board where ever he/she is working; given that availing benefits from any board is a time- and resource-consuming affair, which is more expensive for this class of daily-wage workers.

Secondly, according to Subhashji, the welfare boards are ill-equipped in assessing the exact amount of cess that ought to be levied from each construction project. They lack structural engineers to make such assessments. The boards find it more convenient to rely on the declarations made by the builders themselves, which, as per Subhashji, leads to the gross under-calculation of realisable cess.

The problem does not end there. The cess that is collected often remains unspent for years and the cess is often mistaken as tax by the state governments. The Delhi government in 2015, for instance, sought to re-allocate Rs 1,000 crore of funds from the welfare board to advance their education and health works for the general population.

Subhashji took a strong exception to such proposal and disapproved the poor justification of the Delhi government that even the families of construction workers would benefit from more affordable schools and clinics. The construction workers alone have the right over the funds collected, he says, they could be used only for their benefit alone.

Other problems of corruption and diversion of funds also plague the boards. Labour commissioners are known to float fake unions in order to register bogus workers as beneficiaries so that the funds could be diverted. Several regulatory forms pertaining to cess collection, are also conveniently misplaced. Subhashji has also been working on a campaign to combat corruption within the boards.

Registration of workers – Universal Access Number

During the course of the hearings, the apex court sought numbers relating to the registration of workers from the respondents. In 2017, the Secretary of the Ministry of Labour claimed that 2.8 crore of the 4 crore workers had been registered. Even if the number of bogus workers is left aside, Subhashji says, the figures provided by the government are grossly inflated. The total number of workers must be around 7.5 crore, he estimates on the basis of NSSO surveys.

The registration of workers requires both a one-time fees to be paid as well as a periodic/annual renewal fees to be paid. The latter is provided so there could be a check on bogus registrations, as the workers at the time of renewal, are required to furnish their passbooks in which the employers/contractors are expected to make entries relating to the work assignments.

The figures taken on record do not take into account the ratio of active registration versus the cases wherein the workers have failed to renew their registrations. The number of one-time registration stands much higher, according to Subhashji. Take the case of Delhi, he says, there are about 5 lakh workers registered with the Board. Amongst them 2-3 lakhs are bogus registrants and whereas only 1 lakh workers would have an active registration. The data on renewal of registrations is also hardly ever tabulated.

Given the footloose nature of the labour market, the Union government proposed a Universal Access Number concept in order to facilitate the registration and to enable to workers to avail benefits from whichever state they are presently located. An injured worker in Bengaluru would not have to approach his home state board in West Bengal to seek medical reimbursements for operation. She could claim it through the Karnataka Board itself, which would record the payment as having been made on behalf of the Bengal Board and claim reimbursement accordingly. The idea, on the lines of tax administration, was not thoroughly expounded upon, but the Supreme Court was quick to see the wisdom therein even as the petitioner remains cold.

Subhashji does not refute the wisdom in having inter-state portability in registration. But having spent his entire life in the sector, he notes warily that it is a second nature of government officials to propose such white elephant ideas as they would retire before its implementation.

Welfare schemes and the model welfare scheme

The under-utilisation of cess was the other issue which the SC decided to focus on. It disdainfully noted that the boards were sitting on top of Rs 25,000-30,000 crore of funds, that they were hardly utilising any of this for the welfare, but have been spending huge amounts on the administrative overheads of running these boards. With the exception of states like Kerala, Chhattisgarh and Arunachal Pradesh, the states have disbursed less than 50% of the cess that has been collected. That is, despite including disbursements for procuring laptops, washing machines, etc.

The Supreme Court took a strong exception – Why would a construction worker need a washing machine on a priority basis?

The court therefore felt it was necessary for the Union to draft a model scheme that could be emulated by the states. This is one aspect where the judgment seems flimsiest at best. It is in complete ignorance of regional disparities, particularly within the construction industry which should ideally be determining the welfare schemes that the state boards want to implement. A model scheme with limited flexibility may be marginally more efficient if the universal access number concept is implemented, and if states are to settle accounts with one another.

What played on the minds of the judges is this: “State governments and UTAs have framed a large number of schemes allegedly for the benefit of construction workers. The multiplicity of schemes brings to mind the adage that too many cooks spoil the broth. Keeping a track of these schemes is by itself an enormous task, perhaps resulting in administrative issues and red tape.”

The Court did state that the state governments shall have the flexibility to tweak the model scheme as per their requirements. However, the very idea of having a model scheme is contradictory to the federal scheme of the BOCW Act. While Subhashji does not make comments about the implications to scheme of the Act, he says it would still not solve the issues of implementation nor of corruption. Justification for a model scheme would have been more sound and reasonable if it were to be based on recorded instances, rather than reliance on proverbs and sweeping statements.

A model scheme was accordingly prepared in May 2018. It was published without a report or any supporting material to help a reader understand how specific figures for each head had been arrived at.

Prevailing free market conditions in the construction labour market

Right opposite the Supreme Court, the road is dotted with several construction projects. One of them is a huge project, building chambers for lawyers. Talk to any construction worker at that site, and one would be convinced that the BOCW Act is a mere paper tiger, the Minimum Wages Act is something that one is supposed to laugh about and welfare boards just do not exist.

Workers at that particular site, like at any other large construction project in India, are all migrants. They are usually the ones who come from the most desperate economic conditions and are largely ignorant about their rights. A disproportionate majority belong to the OBC/SC castes and wages that are paid are hardly near the minimum wages rate. Disparity in wages exists more visibly on gender lines than on age.

When asked about paid sick leaves, weekly offs, eight-hour working days and double wages in case of overtime, the workers scoff. It is only amongst the workers who are permanently settled that are found within mazdoor bastis and at labour chowks, that one finds some degree of awareness about the mythical welfare board. Those who do not have contacts with NGOs find it quite difficult to navigate the bureaucratic maze to get themselves registered and to avail benefits.

The Supreme Court is now seeking compliance with its directions. Subhashji has started formulating how a social audit could be designed to fully comprehend the effect of BOCW Act on socio-economic conditions of workers as well as the construction industry. The ugly existence of the free market conditions in construction labour market continue with no fear of laws or of regulations. And these free-market conditions that lead to the over-exploitation of workers would continue as the executive’s will is still largely missing.

An immediate example is non-publication of the report/supporting documents on the basis of which model scheme has been prepared. How does one provide comments to the central government on the model scheme, as being sought, when there is no comprehensive financial data and reasoning that has been provided? Then, how does one debate why the pension amount should be Rs 1000 or Rs 1500 or Rs 3000 in the complete absence of formulae and parameters that the government is considering? For the government has done what it was directed to do by the apex court, it has prepared a model scheme and sought comments. But clearly, this absence of proper supporting data and a comprehensive report to back up the proposed scheme is something which one can only hope that the court takes a strong exception to.

Views expressed are author's own.

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