The elusive Rs 52,000 crore 

Under the Building and Other Construction Workers Act and Cess Act of 1996, State governments have been levying and collecting 1% cess of the project cost, which is to be utilised for the benefit of workers

By Author B Sambamurthy   |   Published: 9th Jun 2020   12:05 am Updated: 8th Jun 2020   10:08 pm

A large number of migrant workers are engaged in building and construction work. Having lost their much-needed daily earning capacity over the last two months, many headed to their far-off native places. With no money and no public transport, many were trudging or cycling hundreds, and even over thousand of kilometres, to reach their homes.  They were at the mercy of random private charity and some free government rations to stave off hunger.

While appreciating the work of good samaritans, it is important to acknowledge that given the size, scope and spread of the problem, only a coordinated action by State and Union governments can resolve this humungous problem. Let us keep aside our emotions and delve deep into the source of the problem and likely enduring solutions in the short, medium and long term.

Data Problem

A significant section of migrant workers is engaged in construction activities. Is it lack of money or statutes that has driven these toiling masses to this extreme misery? The answer to both is absolute No. Under the Building and Other Construction Workers Act and Cess Act of 1996, State governments have been collecting 1% cess of the project cost. This cess is to be utilised for the benefit of these workers.

During March 2020, the Union government stated that of the cess collected, an amount of around Rs 52,000 crore is lying unutilised and advised the respective State governments to transfer these amounts to 3.5 crore registered workers. The actual numbers are much higher. Even after 23 years, States have not cared to collect and maintain the data of these hapless workers.

It is not a problem of money but State governments’ failure to collect and maintain the data that denied the beneficiaries their rightful money. The Census (2011), NSS (2008), estimation in Economic Survey (2017) using passengers travelling in unreserved railway compartments, gravity model are the main sources of data on the number of migration workers, which vary from 30 million to over 450 million. The definition of migrant worker too is not uniform. This needs to be fixed quickly. Both micro and macro data needs to be built for stock and flow (circular) of migration.

Data Brawl

Building and construction workers constitute a major chunk of migrant labour. In response to a writ filed in 2006, the Supreme Court delivered a judgment in 2018 on the issue of collection and utilisation of the cess for the benefit of these workers.

Exasperated at the huge discrepancy (over Rs 5,000 crore) in data on cess submitted by CAG and the Union government, the court scathingly said: “There is something terribly rotten with the collection and accounting mechanism and it is quite clear that the exercise is not carried out satisfactorily. Unless there is an effective and full compliance of the provisions regarding collection of cess, the beneficiaries will be denied what is constitutionally and statutorily due to them”. These fears have come true now. The court gave a series of directions right from registration of workers to formulation of schemes and regular financial and social audit. Compliance with these court orders looks bleak.

Design Skin in the Game

Prof Nicholas Taleb, author of bestsellers like Black Swan and Antifragile, insists that bureaucracy must have skin in the game (downside for bad outcomes) for better outcomes and laments that it is not the norm. Lack of skin in the game for those entrusted with implementation is another contributory factor for the misery of these vulnerable workers.

There are several committees like Monitoring, Experts, and Advisory and Welfare Boards, yet there is no skin in the game for bureaucrats entrusted with the implementation of these statutes and programmes. JAM trinity with over 380 million people created in a few months is an outstanding example of success because the Prime Minister designed skin in the game for bureaucrats and there was a significant contribution by PSU banks. This model is worthy of emulation.

Urban Squalor and Smart Cities

The ordeal of migrant workers also exposes India’s underbelly and urban squalor despite projects like Smart Cities and Slum Rehabilitation programmes. This crisis is an opportunity to revisit some of these programmes so as to make migrant labour highly productive human capital. The mass migration for livelihood also exposes serious disparities in economic growth between southern and western States on one hand and lagging northern and eastern parts of the country. It is time these disparities were mitigated.

Way Forward

There is no dearth of statutes, committees, polices, directions and court judgments to protect the interest of these workers. The government is also contemplating consolidation of various labour laws for easy implementation. But these are of no use in the absence of adequate data on beneficiaries and skin in the game for bureaucracy for responsible implementation. So here is the way forward:

• The Prime Minister needs to inculcate data culture and data-driven decision-making. It is said that if you don’t have data, you are another person with an opinion/belief. There shall be data supply chains with open access to avoid data brawls. This needs to be part of KPI/KRA (Key Performance Indicator/Result) of bureaucracy, across hierarchy
• Skin in the game must be instituted for all those who are responsible for implementation.
• A time limit needs to be fixed to either accept or reject or modify any government-appointed/encouraged committees’ recommendation. The recommendations must not be kept in limbo for over a decade like ‘One Nation,One Ration Card’.
• Urbanisation policy needs to be redefined and aligned with migration policy.
• Industrially advanced States are heavily dependent on migratory workers.

The government should align the interests of migratory workers with economic revival plan. Let us prepare for the long haul with robust micro and macro data and skin in the game for implementers, both in intent and action. It is important to earn the trust of the migrant workers so that they return.

Else, economic revival may suffer.Data is the most powerful weapon to combat pandemic, livelihood crisis and enable economic revival. Data power is far superior to all other forms of power to deliver the best solution for the good of all. By the way, where is this Rs 52,000-crore chest that belongs to the construction workers?

(The author is former Director and CEO, Institute for Development and Research in Banking Technology)

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