Welfare Framework of India’s Migrant Construction Workers

In News

• The COVID-19 pandemic had widespread and devastating consequences to communities and enterprises in India and across the globe.
  • The situation was particularly grim for the 453.6 million internal migrants in India.
    • It was evident by the unprecedented ‘reverse migration’ witnessed during the pandemic.
• e-Shram portal has been launched to register 38 crore unorganised workers by the Ministry of Labour and Employment.
  • It is not a panacea and there are more structural and administrative problems faced by migrant construction workers.
• There are prominent shortcomings in implementation, especially registration of workers and collection and distribution of Cess.

Status of Construction Sector and Migrant Construction Workers

• Construction Sector and Employment:
  • Contribution of the construction sector to the real growth rate of the gross value added at basic prices reached 6.8 percent during 2016-2019.
    • It was one of the worst-hit sectors during the pandemic.
  • It is also one of the key sectors in which India’s migrant workforce find employment.
    • The NSSO (2016-17) puts the number of construction workers in the country at over 74 million.
  • Interstate migrant workers make 35.4 percent of all the construction workers in the country’s urban areas, according to the 2001 Census. 
    • Of all the interstate migrants in India who move out of the farm sector, construction absorbs around 9.8 per cent.
    • It is the second most preferred sector for migrant workers after retail.
• Family Structure of Migrant Construction Workers:
  • Furthermore, 26 percent of all households with migrant workers employed in the construction sector have nuclear families.
    • This can be viewed as associational migrants in construction.
  • The Jan Sahas Survey conducted at the beginning of the lockdown (March 27-29, 2020), found that 
    • 54 percent of construction workers support 3 to 5 people, while 
    • 32 percent support more than 5 people.

Vulnerability of Construction Sector and Reasons

• Vulnerability and reasons: The prime reason behind the vulnerability of construction workers are:
  • Informal Employment and Unorganised Sector
    • A large section of the working-age migrant population in India finds employment in the informal economy.
  • No or meagre access to Social Security
    • They are often denied any access to social security benefits upon stoppage of work due to lockdown.
  • Urban Centres of Growth and Regional Inequality
    • The spatial distribution of economic growth and prosperity in India in the past 25 years has been agglomerated in-and-around pre-existing centres of growth.
    • This has accentuated the pre-existing disparities between the cities and the resource-poor regions of this country. 
    • This has resulted in a stupendous rise of the construction industry, particularly in the major metropolitan centres.

Legal safeguards

• Two acts constituted in 1996 address the issues faced by the construction workers.
  • The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act and
  • The Building and Other Construction Workers Welfare Cess Act
• These legislatures mandated the institution of a Construction Workers Welfare Board (CWWB).
  • It is a tripartite entity with equal representation from workers, employers and the government.
  • Aim of CWWB:
    • To register all construction workers in the state and 
    • To promote the welfare of registered construction workers through various schemes, measures or facilities.
  • Funded by: Cess at the rate of 1 percent of the total cost of construction
• Indicative welfare benefits are listed out in Section 22 of the Act.
  • They include: 
    • medical assistance, maternity benefits, accident cover, pension, 
    • educational assistance for children of workers, assistance to family members in case of death, 
    • group insurance, loans, funeral assistance and marriage assistance for children of workers. 

Shortcomings in implementation

• There are some prominent shortcomings in implementation, especially with regards to 
  • Registration of workers
  • The Collection and Distribution of the Cess. 

Table: State-wise number of construction & registered workers (Source: DTE)

• Registration of workers
  • The table above shows that there are approx. 55 million construction workers.
  • Based on the estimation, about 35%-40% of the construction workers would be unable to avail the benefits given out by the DBT mode. 
  • Prime reasons behind the fact:
    • The registration rates are not very high.
    • The estimates show that only 52.5 per cent of all construction workers were registered in 2017.
    • Rates of registration are extremely low in 
      • Assam and Bihar (< 20 percent); 
      • in Maharashtra, Gujarat, Jharkhand and Uttar Pradesh, it is lower than the national average. 
    • Possibility of duplicate and fraudulent registrations
      • However, states like Delhi and Chhattisgarh reported a registration rate of more than 100 percent. 
      • It indicates the possibility of duplicate and fraudulent registrations. 

Fig: State Wise Cess collected for and spent on construction workers (Source: DTE)

• The Collection and Distribution of the Construction Workers’ Cess.
  • There is no proper mechanism for the collection  and transfer of said cess as per the 38th standing committee on labour of the Lok sabha.
  • The committee also reported an under-assessment of Cess. 
  • As of 2019, only 39 per cent of the collected Cess has been disbursed to the workers. 
  • Some of the states like together contribute more than 70 per cent in the total construction gross value added (GVA), 
    • but their contribution to the total Cess amounts to only 37 percent. 
    • They are Kerala, Tamil Nadu, UP, West Bengal, Bihar, Madhya Pradesh and Andhra Pradesh.
    • In spite of being the biggest collector of Cess, Maharashtra spends very little (5.4 per cent)
• Not able to Avail the relief measures of EPF
  • Almost all the migrant construction workers are not be able to avail the relief measures offered by the Employees’ Provident Fund (EPF), as 
    • such benefits can only be availed by the formal workers registered as contributing members of the EPFO.
  • The formal employment represents only a small percentage of the total construction workers in India.
  • As estimated by the Periodic Labour Force Survey 2018-2019, the construction sector employs 
    • 83 percent casual and 
    • 11 percent self-employed workers. 
  • Only 5.7 percent of the workers work on a regular basis, of which 3.9 percent are informal and only 1.6 percent are regular formal workers.
  • Overall, only 2.2 per cent of the total construction workers are availing some kind of social security benefits.

Conclusion and Way Ahead

• The administration should ensure that the gap between Cess collected and money spent on welfare activities through CWWBs is reduced.
• The silver lining has been the intervention by the judiciary in a few cases.
• Recently, in July 2020, the Delhi HC asked the Delhi government to see if registration of 10 workers with the BOCWW board can be verified online.
• Also, there should be “no laxity” in registration of workers with the Board, through which they could get ex-gratia of Rs 5,000 during the pandemic.
• The state and the judiciary should step up and enable provision of benefits to all workers.

Source: DTE