The Centre has ordered State welfare boards for building and other construction workers (BOCW) not to distribute household and other articles to workers and instead stick to transferring monetary assistance into their bank accounts.
The Labour and Employment Ministry said in a statement on Thursday that it issued an order to States on Monday directing the boards not to distribute articles. The BOCW boards are meant to carry out welfare activities for workers from the cess on construction collected by States.
The Ministry said it had come to its notice that some State boards had issued tenders or incurred expenditure on distribution of articles like lanterns, blankets, umbrellas, cycles and utensils, instead of spending on “tangible welfare measures” like insurance, disability cover and maternity benefits.
“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,” the Ministry said.
It added that distribution of cash and articles in kind were banned. However, benefits in kind could be provided in extraordinary situations like natural disasters, epidemics and accidents, with the approval of the State government, it said.
The cess is collected at a rate of 1% of construction costs of public and private building projects by States and given to the boards.
“It was effectively utilised in 2020 during COVID lockdown to mitigate the adverse pecuniary impact on the migrant construction workers. Most State Welfare Boards gave out grants ranging between ₹1,000 to ₹6,000 to the registered workers. As per the latest figures, ₹5.618 crore were disbursed by the State Welfare Boards to about 1.83 crore construction workers directly into their bank accounts through DBT,” it said.
