Despite Giving Good Results, Cess-Based Welfare of Workers Faces Uncertain Future | Bharat Dogra

by Bharat Dogra

The overwhelming majority of workers in India are employed in the informal sector where legal provisions for social security and welfare of workers have been weak and governments have also been unwilling or unable to commit the resources that are necessary for this. In such a situation specific cesses which have been levied on activities relating to a particular activity of business have emerged as an innovative source of financing the social security and welfare of workers.

One example of this relates to the law regarding head-loader workers enacted in Maharashtra. This involves that in market areas each transaction of a worker lifting and carrying a weight gets recorded and just as the worker gets a payment for this, a small deposit is made along with each payment for social security. To give an instance, Rs. 100 are paid to a worker for a piece of work and Rs. 2 are deposited in the name of the social security fund of the workers.

This is not much of a burden for anyone as it is being collected in very small amounts, but as so many transactions take place on a daily basis in so many markets, ultimately a lot of money is collected over a period of time, say two years, and the fund is coming in on a regular basis as well. Hence this can become the resource base for initiating a number of welfare and social security of workers in the same line of activity, in this case head-loaders of Maharashtra.

This is not to say that additional funds should not be made available by the government for this. The government can encourage this by making its own significant contribution as well. Of course additional funds are most welcome, but regardless of this, a secure and dedicated fund is created on continuing basis for the welfare and social security of workers.

In addition it should be emphasized that the spending of this fund and implementation of resulting activities should be on the basis of close participative discussions with workers , so that correct priorities and proper implementation can be ensured. I had the opportunity to interact with several workers who had benefited from such proper implementation under the inspiring leadership of Baba Adhav and I must say that very good and heart-warming results had been achieved which give new hope to the cause of informal sector workers in India.

The other, bigger and national-level example which we may give here is that of the two important welfare laws for construction workers passed in 1996 which provided for 1 per cent of the budget for any construction project to be deposited for social security and welfare of worker households and this, in turn, resulted, despite several obstacles being created, in the availability of thousands of crores of Rs.on regular basis for the welfare of workers.

Several trade unions and workers’ organizations have been increasingly concerned regarding dilution or even abolition of several cesses which earlier made available funds for welfare of workers. Supporting these concerns Sh. Sharad Yadav Member of Parliament (Rajya Sabha) and Chairman, Department Related Parliamentary Standing Committee on Industry, wrote to the Finance Minister Sh. Arun Jaitly on March 24, 2017,

“ I write this to express my great concern about salt, mica, coal, dolomite, cine, iron ore, manganese and chrome ore workers as welfare cesses being collected for their social security have been abolished without consulting the trade unions. The representatives of various workers’ unions met me to inform that apart from abolition of cess laws, enactment of GST will further have negative impact on workers’ welfare in building and beedi industries.”

Although the construction cess still continues, as this is the biggest cess for providing social security potentially to a very large number of workers, workers’ organizations have been worried about its dilution following the decision taken earlier very arbitrarily to abolish the cesses related to the welfare activities of several other categories of workers, as well as the larger process relating to the four labor codes.

A report in the Hindu in the context of salt workers in Marakkanam, Villupuram district revealed that the abolition of cesses in some categories of work has already started having an adverse impact on the welfare of these workers. This report titled ‘Welfare Cess rubs salt on workers’ wounds’ pointed out that urgently needed medical camps have stopped, water tanks are not available and educational help for children has stopped. This denial, the report notes, is related to the July 2016 notification of the Union Ministry of Finance abolishing welfare cesses for workers in six sectors. When local officials were contacted they replied that now they do not have funds for these welfare activities relating to labour.

Clearly this a serious matter and the demands for continuing all the welfare activities of workers relating to various cesses should be accepted by the government. The path forward is surely to increase welfare activities, not reduce them.

(The writer is a journalist and author who has written on various struggles of informal sector workers in media and booklets. Some of these writings received journalism awards. His recent books include Man Over Machine and Protecting Earth for Children. )