The Kerala government collected ₹2,178.28 crore as building and other construction workers’ welfare cess during the last five years, yet thousands of construction workers across the state continue to face delays in receiving their pension benefits. The issue has raised concerns regarding the utilization and management of welfare funds intended for one of the state’s largest informal workforce segments.
According to information obtained through the Right to Information (RTI) Act, the Building and Other Construction Workers Welfare Board had registered approximately 20.59 lakh workers as of April 30, 2026. The board is responsible for administering welfare schemes, including pensions, medical assistance, educational support, and other benefits funded through the collection of construction cess.
Despite the substantial revenue generated, nearly 4.15 lakh pensioners have reportedly not received their full pension payments over the past year. Pension arrears are estimated to have reached around ₹840 crore, highlighting a significant gap between fund collection and welfare disbursement.
The RTI data further revealed that the welfare board maintained a closing balance of ₹56.90 crore as of March 31, 2026. While officials have maintained that no welfare funds have been diverted for purposes outside the board’s mandate, the continued delay in pension payments has prompted questions from workers and welfare advocates regarding fund management and financial planning.
The construction welfare cess is collected under the provisions of the Building and Other Construction Workers Welfare Cess Act. Under the existing framework, a cess of 1% is levied on construction projects with costs exceeding ₹10 lakh. The revenue generated through this mechanism forms the primary source of funding for welfare schemes aimed at supporting construction workers and their families.
Recent changes introduced by the central government under the Social Security Code have altered the cess applicability criteria. The revised provisions have increased the exemption threshold for individual residential buildings, meaning construction cess can now be imposed only on residential projects with a construction cost of ₹50 lakh or more. This amendment is expected to reduce the number of projects subject to cess collection, potentially impacting future revenue streams for welfare boards across states.
Interestingly, cess collections in Kerala have continued to show year-on-year growth despite these policy changes and fluctuations in the construction sector. However, the growing pension liability and delayed payments indicate that rising collections alone may not be sufficient to address the financial commitments of the welfare board.
The issue underscores the broader challenge of ensuring timely and efficient delivery of social security benefits to construction workers, many of whom depend on welfare pensions as a vital source of income during old age. With more than 20 lakh workers registered under the welfare board, stakeholders are calling for greater transparency, improved fund management, and faster disbursement mechanisms to ensure that welfare benefits reach eligible beneficiaries without prolonged delays
