Pay via DBT not in kind to construction workers: Centre writes to states

3 min read . Updated: 25 Mar 2021, 08:29 PM IST Prashant K. Nanda

Transfer of money in the form of cash has been completely stopped by the instant order and any monetary assistance has to be necessarily given through DBT, labour ministry said

New Delhi: The union government has asked states to pay construction workers via direct benefit of transfer (DBT) and have restricted them from paying in cash or in kind from the construction cess fund on account of covid-19 relief. The move comes as the labour ministry gets scores of complaints that in parts of India, authorities are using the welfare fund and giving in kind – from utensils to cycles to workers.

“Transfer of money in the form of cash has been completely stopped by the instant order and any monetary assistance has to be necessarily given through DBT. The order also puts a ban on the distribution of articles in kind," the labour ministry said.

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“It had come to the notice of the Ministry of Labour…that some state welfare boards were issuing tenders or incurring expenditure on distribution of household items such as lanterns, blankets, umbrellas, tool-kits, utensils, cycles and similar other articles instead of on tangible welfare measures such as life insurance, health insurance, disability cover, maternity benefits and old-age pensions for the workers. Since 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 Thursday in a statement.

As per the latest figures, ₹5618 crores were disbursed by the State Welfare Boards to about 18.3 million construction workers directly into their bank accounts through DBT. The payment ranged from Rs. 1000 to Rs.6000 per person.

A government official, who declined to be named said that in the face of impending state elections, such a practice may lead to misuse of welfare funds and lead to leakage for political purposes.

States are allowed to collect 1% of a construction project of both by public and private parties and utilised for the welfare of construction workers as per law. It was effectively utilised in 2020 during COVID lockdown to mitigate the adverse pecuniary impact on the migrant construction workers.

The union labour ministry has restricted such practice and has directed the State Welfare Boards not to distribute articles and household items to the construction workers and instead provide monetary assistance DBT into the workers’ bank accounts, the ministry said. It added that formal letters have been issued to chief secretary and principal secretaries and labour commissioners of states.

After the outbreak of the Covid-19 in March 2020, the union government as a first step has allowed state welfare boards to distribute some amount to construction workers to tide over the immediate crisis.