Reflection over unspent Special-Purpose Funds in India: A Case of Building and other Construction Workers (BOCW) Welfare Fund

Abstract

The Building and Other Construction Workers (BOCW) Welfare Fund was established under the BOCW (Regulation of Employment and Conditions of Service) Act, 1996 and the BOCW Welfare Cess Act, 1996, to provide social security benefits to construction workers, one of the most vulnerable labour groups in India. Despite the significant accumulation of funds through a mandatory cess on construction projects, a large portion remains unspent or underutilised, drawing attention to governance failures, administrative inefficiencies, and policy bottlenecks. This paper critically examined the issue of underutilisation of BOCW cess funds along with its reasons and their diversion for other purposes, particularly during emergencies such as the COVID-19 pandemic, when large sums were repurposed for relief efforts. While such reallocation may have provided temporary support to the affected populations, it raises fundamental legal and ethical questions regarding the use of special-purpose welfare funds to meet alternative needs. Over the years, several audit reports of the Comptroller and Auditor General of India, judicial directives, and parliamentary committees have highlighted gross mismanagement, bureaucratic hurdles, regulatory constraints, poor implementation, and weak accountability mechanisms in fund administration. Despite these observations, concrete policy actions have remained slow. Thus, this study recommends policy reforms and enhanced administrative efficiency in managing BOCW funds through structural changes in fund disbursement mechanisms, increased worker enrolment and awareness, and stronger legal safeguards to prevent the diversion of funds, ensuring that welfare entitlements effectively reach the construction workers.