The Comptroller and Auditor General of India’s (CAG) recent report has pointed to irregularities in remitting labour cess to the Tamil Nadu Construction Workers Welfare Board (TNCWWB), by the local bodies in the State. A whopping ₹221.81 crore is pending for remittance by 99 local bodies in 10 districts in Tamil Nadu, according to the report.
As per the ‘Performance Audit on Welfare of Building and Other Construction Workers’ by CAG, the Greater Chennai Corporation (GCC) alone accounts for ₹207.08 crore.
In February 2023, the Tamil Nadu government said that in January itself letters were despatched to local bodies instructing them to remit their outstanding amounts to the TNCWWB. The government also said that an online cess collection module to monitor collections and remittances more effectively would be implemented.
Additionally, the government in March last year also replied that the Commissioner of Labour was instructed in December 2022 to notify inspectors to ensure collection and remittance by local bodies. “Results of the action taken by the Commissioner of Labour are awaited (March 2023),” the report stated.
The board relies primarily on labour cess as its main source of funding, the report states. This cess is levied at a rate of one per cent of the estimated value of construction projects. But, the audit, which covered 124 local bodies across 10 districts in Tamil Nadu, noted that ₹221.81 crore that is to be remitted was retained within the 99 local bodies instead.
Further, the audit revealed that between April 2017 and March 2022, GCC’s retention grew from a total of ₹18,051 to ₹206.25 crore, and that the Corporation remitted ₹8.57 lakh to the construction board in the same period.
The CAG said in the report that as per Section 30 of the Tamil Nadu Manual Workers (Regulation of Employment and Conditions of Work) Act, any individual or entity found violating the Act or its associated rules can face penalties upon conviction. The penalty for such violations may include a fine of up to ₹500 initially. If the violation persists, an additional fine of up to ₹100 per day can be imposed for each day if the contravention continues. No fines have been levied on defaulting offices to date, as per the audit.
