Ministry of Labour & Employment
Use of Direct Benefit Transfer (DBT) for financial
assistance to the Building and Other Construction
(BOC) Workers and Restriction on distribution of
benefits in-kind by the State Welfare Boards
Posted On: 25 MAR 2021 5:28PM by PIB Delhi
In a recently issued order, the Ministry of Labour and Employment has directed the State Welfare Boards
(SWBs) not to distribute articles and household items to the BOC workers and instead provide monetary
assistance through Direct Benefit Transfer (DBT) into the workers’ bank accounts. The order was circulated
on 22nd March, 2021 to the Chief Secretaries, Principal Secretaries (Labour), Labour Commissioners and the
Secretaries of the State BOCW Welfare Boards by the Ministry under the powers given to it by Section 60 of
the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,
1996. The Act aims at regulating the safety, health, welfare and other conditions of service of the construction
workers through the State Welfare Boards (SWBs) in every State/UT.
It had come to the notice of the Ministry of Labour and Employment that some State Welfare Boards were
issuing tenders or incurring expenditure on distribution of household items such as lanterns, blankets,
umbrellas, tool-kits, utensils, cycles and similar other articles instead of on tangible welfare measures such as
life insurance, health insurance, disability cover, maternity benefits and old-age pensions for the workers.
Since the procurement process adds layers to the entire process, with apprehension of leakages both at the
procurement stage and at the distribution end, hence this decision was prompted.
Transfer of money in the form of cash has been completely stopped by the instant order and any monetary
assistance has to be necessarily given through DBT. The order also puts a ban on the distribution of articles in
kind. It mentions that no benefit can be provided in-kind except in extra-ordinary circumstances such as
natural calamities, epidemics, fire, accidents caused due to occupational hazard or similar other crisis and only
with the prior approval of the State Government. This is done with the intent that the welfare of the
construction workers is not compromised during exceptional situations.
Section 22(1) of the Act comprehensively stipulates the functions of the State Welfare Boards. Sub-sections
(a) to (g) mandate the State Welfare Boards to spend the Cess fund on payment of premium for pension,
group insurance scheme, scholarships to workers’ children, medical expenses, maternity benefits and loans for
house construction. As an exception, sub-section (h) allows the boards to spend on such other welfare
measures and facilities as may be prescribed. It was observed that some State Welfare Boards had taken
recourse to this sub-section of the Act and resorted to arbitrary use of cess funds for construction of buildings
and distribution of articles and utensils instead of using it for the welfare of construction workers.
The order emphasizes that the social security coverage stipulated under Section 22(1) (a) to (g) will hold
precedence over any other benefit being provided to the registered construction workers under Section 22 (1)
(h) of the Act. After meeting these priority expenses as mentioned in Section 22(1)(a) to (g) of the Act, any
balance of the cess fund can be utilized by the Boards for giving additional benefits as per the mandate given
under Section 22 (1)(h) of the Act. To keep a vigilant eye on the nature of expenditure, the Ministry has asked
the State Boards to furnish an Annual Return on the details of items on which the expenditure has been
incurred under Section 22(1) (a) to (g) and Section 22(1) (h) separately.
The Cess fund is collected by the States at a uniform rate of 1% on the construction costs of the public and
private construction works and utilised by the State Welfare Boards for the welfare of construction workers as
per law. It was effectively utilised in 2020 during COVID lockdown to mitigate the adverse pecuniary impact
on the migrant construction workers. An advisory was issued by the Labour Ministry on March 24, 2020 to all
states to provide financial assistance to the affected BOC workers via DBT from the welfare fund maintained
by them. Most State Welfare Boards gave out grants ranging between Rs 1000 to Rs 6000 to the registered
workers. As per the latest figures, Rs 5618 crores were disbursed by the State Welfare Boards to about 1.83
crore construction workers directly into their bank accounts through DBT.
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MS/jk
(Release ID: 1707562)
