Covid-19: Govt directs states to transfer cash to construction workers

To provide relief to employers, the government has extended the last date for filing returns under eight labour laws and 10 central rules for the year 2019 till April 30, 2020
In a first major step for the unorganised sector to tide over the COVID-19 pandemic during lockdown, the central government on Tuesday directed states to transfer cash into the bank accounts of construction workers from the unutilised welfare funds earmarked for them.

Additionally, to provide relief to employers, the government also extended the last date for filing returns under eight labour laws and 10 central rules for 2019 till April 30.
The central government will not initiate legal action against establishments if they failed to file returns till February-end due to the pandemic, stated the March 20 letter by the chief central labour commissioner.

Labour and Employment Minister Santosh Kumar Gangwar wrote a letter to all chief ministers (CMs) of states and Union territories, urging them to utilise Rs 52,000 crore lying vacant in the building and other construction workers welfare cess fund. There are about 35 million construction workers registered under the Building and Other Construction Workers Welfare Cess Act, 1996.

The cess fund is maintained by state governments which also maintain a register of construction workers in their region. The states are required to frame schemes for the welfare of construction workers related to medical needs, pension, loans for construction of houses, insurance, education of children, maternity benefit, among others. However, various state governments have not utilised the funds. The Supreme Court has pulled up both the Centre and states for this.

In a rare move, the government has invoked Section 60 of the Act to issue directions to state governments to frame a scheme “for transfer of adequate funds to the bank accounts of construction workers, through the direct benefit transfer mode".

“The amount to be granted to construction workers may be decided by the respective state governments and Union territories. The financial assistance at this point in time would help to mitigate the financial crisis of construction workers to some extent and boost their morale to deal with this epidemic,” the letter issued by the labour minister stated.

A senior labour ministry official said the country has about 50 million construction workers and the states can also launch a drive to register more workers under the Act, so that the rest of the unaccounted construction workers are able to take benefit of the cash transfer.

Some state governments have already announced relief to workers by utilising money from the cess fund. Punjab CM Amarinder Singh has declared an immediate relief of Rs 3,000 to each registered construction worker in the state; Himachal Pradesh will also provide one-time relief of Rs 1,000 to such workers.

Due to lockdown announced by several states, economic activity, except those involved in essential services, has taken a hit, with potential to impact India's unorganised sector workers the most, given they do not have any social security cover at the moment.

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