Section 38: Utilisation and Management of Cess Funds

Overview

Section 38 of the Code on Social Security, 2020, deals with the crucial aspect of managing the funds collected as Cess under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. This section outlines how Welfare Boards are to allocate and utilize these funds to provide various social security benefits to registered construction workers. It ensures that the collected Cess is effectively used for the welfare of this vulnerable workforce.

Who is Covered?

• This section applies to all Welfare Boards constituted under the Code for building and other construction workers.
• The benefits are available to workers who are registered with the Welfare Board. Registration typically requires fulfilling criteria related to working in the construction sector for a specified period.

Benefits and Contributions

• Benefits to Workers: The Cess funds are to be used for a range of benefits including housing support, health facilities, accident insurance, education scholarships for workers’ children, provision of safety equipment, emergency assistance (like financial aid during crises), and pension support.
• Contribution Responsibilities: The Cess is levied on construction projects, not directly on employers or employees. However, employers are responsible for ensuring the Cess is collected and deposited with the Welfare Board as per the prescribed rates. The government plays a role in overseeing the collection and disbursement of these funds.

Procedure and Compliance

The Welfare Boards are responsible for establishing clear procedures for utilizing the Cess funds. This includes:

1. Allocation of Funds: Boards must allocate funds to various welfare schemes based on the needs of registered workers.
2. Transparent Spending: All expenditure must be transparent and documented.
3. Regular Audits: Funds are subject to regular audits to ensure proper utilization.
4. Digital Tracking: The Code mandates digital tracking of all Cess expenditure for increased accountability.
5. Reporting: Boards are required to submit regular reports on fund utilization to the appropriate authorities.

Practical Examples

• Example 1: Education Scholarship – A construction worker’s child excels in their studies. The worker applies for an education scholarship through the Welfare Board, funded by the Cess. If eligible, the Board provides financial assistance to cover the child’s educational expenses.
• Example 2: Misuse of Funds – A Welfare Board official is found to have diverted Cess funds for personal use. This constitutes a misuse of funds and is subject to penalties as prescribed under the Code, potentially including fines and legal action.

Disclaimer

This article is for basic understanding of social security law and should not be treated as legal advice. For specific legal guidance, please consult with a qualified legal professional.