In October 2023, the Congress-led Karnataka government abruptly slashed the scholarship amounts given to children of construction workers registered with the Karnataka Building and Other Construction Workers Welfare Board. The reduction was so severe that it sparked a political slugfest with the Opposition parties – Bharatiya Janata Party (BJP) and Janata Dal (Secular) [JD(S)] – accusing the government of being so starved of money due to the implementation of the five guarantee schemes, that they were taking away money from other schemes implemented by various departments.
In reality, it was a knee-jerk reaction by the Labour Department as the pandemic years had seen a two-fold rise in the number of registered construction workers, most of whom were bogus. A look at the numbers revealed that the then government under the BJP, which was unable to dip into the pool of money with the Welfare Board, encouraged people to register as construction workers and avail COVID-19 relief benefits. Even for the scholarships, lakhs of applications coming in were bogus.
The Department and the Minister who heads it, instead of finding a solution to the problem, went for the easy fix, cutting down on scholarships. Minister Santosh Lad who stridently defended the reduced scholarship amount, did a huge disservice to vulnerable students.
The issue came to a head with various trade unions staging protests demanding the withdrawal of the order. After a state-wide protest on November 29, a four-hour meeting on December 18 with the Board members resulted in some assurance to the union members that the Department would work on the upward revision of the scholarship amounts, and work towards weeding out bogus registrations to the Welfare Board.
But the unions also demanded that the Department do away with a scheme providing medical check-ups to construction workers. The problem, say union members, is that the Department has tied up with private hospitals for these check-ups, spending a whole lot of money. They ask how the Department can spend excessive amounts of money on check-ups in private hospitals when there are good and cheaper government hospitals, and then claim not to have enough money to spend on scholarships. The trade union groups are also preparing to approach the High Court challenging the revision of the scholarship amounts.
In an interview last month with The Hindu, Labour Minister Santhosh Lad said that the Board had received 13 lakh applications for scholarships for 2022-2023. For the year 2021-2022, they had received a little over 3.38 lakh applications. Santhosh said the increase in scholarship applications was due to the increase in bogus registrations to the Welfare Board, made by ineligible people during the three-year rule of the BJP. According to the Minister, the Board had identified seven lakh genuine applicants for scholarships and weeded out the other six lakh applications. Sources monitoring the issue say that eventually 9.5 lakh applications were approved.
The allocation for scholarships for 2022-2023 is Rs 220 crore, a decrease of more than half compared to the previous year’s expenditure on scholarships at Rs 460 crore. Even in the previous year, around 1 lakh children whose scholarship applications were approved have not received the amount totalling around Rs 226 crore.
The Welfare Board is not starved of funds. As of July 31, 2023, it had a balance of Rs 7,001.11 crore. Of all the schemes run by the Board, it is the scholarship applications that are the highest in number.
What is the Welfare Board?
By the mid-nineties, around 85 lakh people in India were involved in building and construction works, and as unskilled labourers who were largely illiterate, they were identified as the most vulnerable in the unorganised labour sector in the country. Lack of safety measures and basic amenities, the temporary nature of the relationship between the building contractor and the workers, and the absence of any sort of welfare facilities had become the hallmark of the construction labour segment. Consistent demands by trade unions finally resulted in the formation of The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Bill, which came into effect in August 1996.
Under this, the states would form their respective Welfare Boards, and registered construction workers would be entitled to benefits including financial assistance for the education of children. Construction workers aged between 18 and 60, who had been engaged in construction work for 90 days in the preceding year were eligible to register as beneficiaries.
The Welfare Board operated concomitantly with The Building and Other Construction Workers Welfare Cess Act, of 1996, allowing the corpus fund for the Welfare Board to come from all manners of construction –private and government – with cess being levied at a rate of 1% of the cost.
In 2006, the National Campaign Committee for Central Legislation on Construction Labour approached the Supreme Court with a writ petition, citing the poor implementation of the Act across the country by most state governments and Union Territories. During the hearing, the court was informed that Rs 37,400 crores had been collected as cess, but only about Rs 9,500 crores had been utilised ostensibly for their benefit. “What is being done with the remaining about Rs 28,000 crores?” the court asked. It was a fair question.
Maharashtra, for instance, had collected Rs 777.69 crore as cess in 2012-13 alone but spent only Rs 3.99 crore. Rajasthan, for the corresponding period, collected Rs 173.83 crore and spent a paltry Rs 11.89 crore on the beneficiaries.
Over the years, court directions were issued about holding regular Welfare Board meetings, Comptroller and Auditor General (CAG) audits, disbursing funds promptly to beneficiaries, attempting to enrol construction workers, et al and later, a direction to draft a model scheme for their welfare. One of the five key areas identified by the court and the Union government was to lay greater emphasis on education and provide educational facilities to the children of the building and other construction workers.
In the judgement delivered on March 19, 2008, Justice Madan B Lokur and Deepak Gupta mentioned the court’s order on February 7, 2012, where it made clear that “the funds available with the Welfare Boards which have not been disbursed or are not likely to be disbursed within a short period should be properly invested with the nationalised banks only. Funds available with the Welfare Boards shall not be utilised by the State for any other head of expenditure of the State Government, etc.”
This effectively stopped the state governments from dipping into the rich coffers of the Welfare Board, though some governments in Karnataka, including that of the BJP, did make unsuccessful attempts. It is because of the same order that the Siddaramaiah government could not have made use of the Welfare fund money for other purposes. The state government cannot be cutting scholarship amounts to children of registered construction workers citing a shortage of funds, as the Welfare fund money is not a budgetary provision.
Clearly, with more than Rs 7,000 crore in funds available, there was no shortage of funds for the Welfare Board. But cut, they did.
Nonetheless, workarounds exist. While state governments might not have been able to directly access the funds, getting fake beneficiaries registered under the Welfare Board was a way out.
What happened in Karnataka
Karnataka did not buck the nationwide trend. The Karnataka Building and Other Construction Workers Welfare Board (referred to as the Welfare Board) saw enrollment to the board beginning in 2007 and the number of registered workers crossed 1 lakh only in 2015. By January 2020, a firm push by the Supreme Court had seen around 22.03 lakh workers registered with the Welfare Board, including 5.05 lakh workers engaged in the construction of buildings under the Mahatma Gandhi National Rural Employment Guarantee Scheme. But the Welfare Board was not very proactive when it came to implementing schemes.
According to CAG’s report in 2020, as of March 2019, the Board had registered 15.69 lakh workers and had a closing balance of Rs 7,151.26 crore. The Board had utilised a mere 5% of the funds available at its disposal on welfare schemes during the period 2014-15 to 2018-19. “At the end of March 2019, the Board had to bear an additional liability of Rs 2,358.94 crore including penal interest of Rs 755.07 crore towards income tax, which could have been averted had the Board followed the provisions available in the IT Act, 1961, for availing tax exemption….Despite having the Expert Committee to advise the Government in drafting the rules, there were inconsistencies and unrealistic clauses which led to the denial of assistance to construction workers and the Board could utilise only 5% of the available funds on welfare schemes during the period from 2014-15 to 2018-19,” the report stated.
The generous funds seemed to have drawn attention when COVID-19 struck. The Board saw an abnormal spike in registration in the next two to three years. Between January 2020 and April 2023, the number of registered workers saw a huge increase with 44,28,004 people registering with the Welfare Board. As of July 2023, that number had increased to 46,42,374 people.
The biggest increase came from Haveri, the home district of former Chief Minister Basavaraj Bommai, where it jumped from 36,483 workers in January 2020 to a shocking 2,86,410 in April 2023. Koppal district showed a jump from 26,260 to 2,14,174, Kalaburagi from 70,135 to 3,17,247 and Belagavi from 96,625 to 2,54,567 for the corresponding period.
“The bogus applications came in during COVID-19. The Welfare Fund was giving Rs 3,000 to 5,000 relief amounts to registered workers as everything had come to a standstill and there was economic distress. The BJP also encouraged this,” said
K Mahantesh, general secretary of Karnataka Building and Other Construction Workers Federation. Registration had also been made easy as now anyone could register through the Seva Sindhu portal or citizen service centres across the state. From 1.99 lakh in 2019, the numbers had jumped to 46.42 lakh by July 2023.
Much criticism has also been directed by trade unionists towards then Labour Minister Shivaram Hebbar. While his district Uttara Kannada saw membership jump from 59,160 to 1,66,593, they alleged that most of this came from his constituency Yellapur. The large number of bogus registrations could not have happened without the collusion of the Labour Department officials, they allege. In 2020-21, COVID-19 relief amounts were given to 16,48,431 people at a cost of Rs 824.21 crore and 19,62,941 registered people received benefits at a cost of Rs 588.58 crore in 2011-2022.
While the state was not allowed to dip into the funds directly, they found other ways to go about it. Mahantesh says that one of the reasons for the bogus registration spike was the Karnataka Slum Development Board. “The Slum Development Board received Rs 400 crore from the Welfare Fund. Those who applied for a house there were told to get registered under the Welfare Board as a construction worker and then they would get their applications approved there and receive money,” Mahantesh said. Though providing funds for housing to construction workers is one of the main intentions behind the Construction Workers Act, nothing ever has moved on the applications filed by them under the Welfare Board, according to Appanna, the state general secretary of All India Central Council of Trade Unions (AICCTU).
Mahantesh says that the Department also decided to provide laptops to high school children who had scored more than 96% in exams. “There was no demand for a laptop. Anyways, the Act also doesn't envisage discriminating and providing something only to someone who scores more. All the children should be provided for,” he said. In addition, plans to provide laptops and tablets do not make sense, when many of the children are still not able to attend school or many who are enrolled in government schools do not have proper reading and writing skills even in high school, he added.
The latest bone of contention with how money is being spent is about a medical check-up plan for the construction workers where they have tied up with private hospitals.
“This is a scheme, where money per person (about Rs 3,000) is being paid to private hospitals for a check-up. Where is the need to do this, when government hospitals offer the same at a much cheaper rate? And like most people, these results say the person has high blood pressure and diabetes. That is a result I can’t get at Rs 50. Why should so much money be paid to private hospitals?” Appanna asked. Trade unionists also alleged that if a hospital conducted check-ups for 200 people, then a bill for 400 people was being generated. This is when medical bills for reimbursement due to hospitalisation amounting to Rs 2 lakh have been kept pending. Schemes, where money has to be paid to outside agencies, are running well, while schemes where beneficiaries are paid directly are left pending, he alleged.
So much has the medical check-up riled up the workers, that protests are being staged in districts against it. After protests on November 29, at a meeting with Labour Department officials on December 19, union workers demanded that the medical check-up be withdrawn and the amount be used for scholarships. At the top of the list of matters that were discussed is how the Department is going about weeding bogus applicants and those who want to renew memberships.
Principal Secretary of the Labour Department, Mohammed Mohsin said they had begun the weeding out process starting from Haveri district. “We have a special team there as the number of registrations is very high. We suspect 50 to 60% of labour cards from that district are fake. We are giving a public notice to return the cards, voluntarily,” he said. What the construction workers’ representatives are demanding is that they announce the filing of criminal charges against bogus card holders, something the Department refuses to do.
But what the Department is now asking to ensure the registrations are genuine is daunting. Mohsin says they want construction workers’ payslips or bank passbooks. Other proofs include showing the building’s plan approval document, the door number of the building or the attendance register. When pointed out that this was an unorganised sector, where terms of employment is an oral agreement and money is mostly paid in cash, Mohsin said, “But, we need some proof to verify. For instance, a lecturer from Ballari working in Mysuru is registered as a construction worker. In some schemes, we have 100 applications with the same mobile number. All we are asking is to show us something to say they have worked for 90 days in the year prior. We do not want to hurt genuine workers. We are just trying to avoid misuse.”
Mahantesh points out that only 15 to 20% of construction works through proper paperwork and contracts. “They are mostly illiterate and over the years, we have had to coax them to come and register with the Welfare Board. With all these new restrictions, they will hesitate to do it. We are trying to convince the officials that they cannot be too technical. It is mostly the fake ones who will have all the answers ready.”
Appanna laughed as he described how the renewal applications were being verified. “A lot of construction workers work multiple or seasonal jobs. Someone from the Department will call them to verify and they ask them where they are. The worker will say he is tending to sheep as that is what he is doing at that exact moment. Based on that alone, they are rejecting renewal applications.”
The deleterious impact of reducing scholarship amounts
The argument made by the Labour Department for reducing the scholarship amounts is the huge expenditure incurred. “We have nine and a half lakh applications after we rejected the bogus claims. If we give the scholarship it will be Rs 1,500 to Rs 1,600 crore each year and what is coming in is Rs 800 to Rs 1,000 crore each year. If we continue with the old amounts, then we will have to close down all other social security schemes,” Mohsin said. Further, comparing the old rates to SC/ST scholarships, they said the amounts offered by the Welfare Board were too high and they needed a benchmark.
Critics say this is an argument that defies logic. For one thing, the funds for the Welfare Board come from cess collected over the years (including membership and renewal fees collected earlier), while allocations for SC/ST scholarships come from Union and state governments, where budgetary allocations have been made. It is also a matter of record that repeated mentions have been made by parliamentary committees that the SC/ST scholarship amounts are very low. A Parliament Committee on the Welfare of Scheduled Castes and Scheduled Tribes, headed by BJP MP Kirit P Solanki, earlier this year, demanded an upward revision to help them keep up with the inflation.
In the case of construction workers, the plight of millions of illiterate workers with poor working conditions and lack of access to basic facilities like health and education meant that the children too would often end up illiterate perpetuating the same cycle of poverty. Hence, education was given greater preference.
“It is with great difficulty that we managed to get these workers registered and tried to ensure their children go to school. This education scheme was brought because the majority of the workers are illiterate and so are their children. If we do not give that amount to primary and high school education then it is a given that these children will end up becoming construction labourers as well. Very few of them go to college and the scholarship requests are also few. Education is such an important component. If you cannot help out there, how can you call it welfare? Would these same government officials agree to a decrease in their DA?” Mahantesh questioned.
“The trend of migration among construction workers shows increased poverty and disparity. Their children in Bengaluru, for instance, have fallen off that radar. The government instead of reducing scholarship amounts should be making a concerted effort to get these children to school and ensure they stay. That is not getting the attention it warrants. Look at various construction projects around the city and you can find children sitting on the side of the road while their parents work. There cannot be coercion, so participative processes like scholarships encourage the parents to send them to school and allow children to grow,” advocate Clifton D’Rozario, national secretary of AICCTU said.
Officials have now promised to look into the upward revision of college scholarships and not school scholarships. “Maybe if numbers (bogus registrations) come down, we can reconsider the rates if we have a genuine number of workers,” Mohsin said.
“If they think school scholarships are not important, then we can only assume they are looking for more illiterate construction workers for the future,” Appanna said.