Every year, the first day of May is marked as Labour Day to honour workers and their contributions to the society. The day serves as a reminder of the ongoing struggle for fair wages & working hours and safe working conditions.
For Indian construction sector, this day holds particular significance. Currently accounting for close to 9% of the national Gross Domestic Product, the industry plays a key role in shaping the future of India’s economy and infrastructure. Analysts project the market size could soar to around $1.4 trillion (£1.1 trillion) by 2025. By 2030, estimates suggest that the construction sector will employ as many as 30 million individuals nationwide.
However, this rapid growth masks a series of deep-rooted structural issues. According to N. Subrahmanyan of Larsen and Toubro (L&T), the industry is grappling with a labour shortage due to limited mobility among workers. Many are hesitant to relocate, as moving often results in losing access to state-specific welfare schemes.
Despite a vast pool of registered construction workers, over 56 million, cannot fully access the benefits meant for them. The complex paperwork, the need for proof of employment, and the lack of consistent employer support makes it difficult for workers to qualify. The mobile nature of their jobs only adds to the challenge, as many cannot provide the required documents or maintain eligibility when moving between sites or states.
Government Labour Welfare Schemes
The Ministry of Labour and Employment recently highlighted ongoing efforts to enhance the welfare of millions of construction workers under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, widely known as the BOCW Act.
The BOCW Act was created to ensure construction workers receive basic entitlements such as accident insurance, healthcare, housing support, and pension schemes. State Welfare Boards were established to deliver these services, and they are funded through a cess, a small tax collected from construction companies.
Underperformance of Welfare Schemes
A current update to Parliament by the Ministry of Labour and Employment revealed a stark mismatch between intention and implementation. While Rs 1.17 lakh crore (approx. £11 billion) has been collected since 2005, over Rs 70,000 crore remains unspent.
The Right to Information (RTI) query sheds further light on the underperformance of welfare schemes. Despite nearly 5.7 crore workers being registered with 36 state boards, many live and work in hazardous conditions without access to the benefits owed to them.
Critics argue that the figures point to large-scale cess evasion and underreporting of actual construction activity, particularly in States like Maharashtra. Activists claim that the official data does not reflect the true scale of construction, suggesting widespread under-collection of dues.
Concerns have also been raised over the potential dilution of workers’ rights under the proposed Code on Social Security. Only a handful of States, notably Kerala, are actively implementing the BOCW Act. In contrast, many others have been accused of neglecting their obligations, underutilising funds, and excluding worker representatives from welfare boards.
To address these concerns, the Indian government is moving forward with the Code on Social Security, which aims to consolidate multiple labour laws. While the intent is simplification, many unions and rights advocates fear this may dilute statutory entitlements, transforming mandatory rights like shelter, toilets, and insurance into discretionary guidelines.
While the government has taken steps to facilitate access, such as introducing a Unique Identification Number and setting up registration camps, these measures have yet to bridge the gap between policy and practice. As the world observes Labour Day, the spotlight is again on the workers who help build its homes, roads, cities, and future.
International day that traces its origins to May 1, 1886 protest of workers in USA was declared International Labour Day in 1889 and rightly, so this day gives all of us a chance to reflects upon the progress made and challenges that remain in improving the conditions of our workers.
