The state government finally started dispersing Rs 125 crore collected under the Building and Other Construction Workers Cess Act (BOCWCA) 1996 last week for the welfare of registered construction labourers. But the criteria adopted in calculating the cess has led to allegations that the government is favouring the construction companies.

Consider this: a five-star hotel in Ahmedabad or a lower middle-class house in tribal Dangs — whether it was being built in 2006 or the construction works are going on now — costs the same Rs 3,000 per sq metre (excluding the land costs). This calculation is as per the Gujarat government’s implementation of the BOCWCA.

According to the provisions of the Act, all establishments undertaking any construction activity of over Rs 10 lakh and employ more than 10 workers are required to pay cess for the welfare of construction workers ranging between one to two per cent of the total cost of construction. The workers, on their part, also contribute Rs 75 annually to this fund.

But the Workers’ Welfare Board established under the Act in its meeting dated February 14, 2006, passed a blanket order fixing the cess for all ‘building constructions’ across the state at Rs 30 per square metre.

According to the minutes of the meeting, the board itself noted that building construction costs across the state might vary and would take time to assess. So, assuming that the construction cost per square metre would be the same across Gujarat at Rs 3,000, the cess was fixed at Rs 30 per square metre (1 per cent of 3,000). And this Standard Official Rate (SOR), as it is called, still continues.

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