CAG indicts Gujarat government for siphoning workers’ welfare funds to benefit builders

By Dilip Patel*

The Comptroller and Auditor General (CAG) has slammed the Bhupendra Patel-led BJP government in Gujarat for turning the state’s Building and Other Construction Workers’ Welfare Board into a tool that benefits builders and contractors while neglecting the welfare of labourers. According to the CAG’s findings, successive BJP governments since 2004 have violated laws, ignored accountability, and diverted workers’ funds, leaving thousands of labourers without safety, health care, or basic welfare schemes.

The audit revealed that from November 2017 to March 2022, the board functioned without proper representation from employers or workers, and even in 2025, the government has failed to restructure it. Despite laws mandating an advisory committee, no such body has been set up since 2011. The board has not created a dedicated welfare fund, and the cess collected continues to remain in government accounts instead of being used for workers.

As of March 2023, the government had collected ₹4,788 crore in cess but only transferred ₹2,545 crore (53 percent) to the board, while retaining ₹2,243 crore (47 percent) for its own use. Out of ₹2,544 crore granted to the board, only ₹808 crore was spent on welfare schemes and administration, leaving ₹1,736 crore unutilised. Between 2017 and 2022, 42 percent of welfare schemes were shut down, including the old-age pension scheme and subsidised food programmes in most districts.

The CAG also highlighted rampant negligence in workers’ safety. Inspections showed that 66 percent of contractors failed to provide overhead safety, 60 percent did not supply eye protection, and 28 percent denied workers headgear. Fire safety equipment was absent at 64 percent of construction sites, and up to 88 percent had no medical emergency preparedness. Despite laws requiring safety and health policies for sites with over 50 workers, many contractors either failed to prepare them or left them incomplete.

While builders’ registrations surged from 668 in 2017 to over 5,000 in 2025, there was no effective mechanism to regulate construction activity or ensure compliance with central government guidelines. Worker registration was left incomplete, and surveys were never conducted to identify beneficiaries. Astonishingly, only 37 workers received housing assistance between 2017 and 2022, despite nearly a million being eligible.

Funds meant for pandemic relief also went unaccounted. Of the ₹52 crore allocated to municipal corporations in 2020 for COVID-19 protection, ₹36 crore remained unaudited as of 2023. Even schemes like the Dhanvantari mobile health vans barely reached 50 workers, exposing systemic neglect.

The CAG recommended urgent measures including immediate reconstitution of the welfare board, direct transfer of cess funds to it, filling of vacant inspector posts, strict enforcement of worker registration and safety standards, and revival of pension, food, and housing schemes.

The report paints a grim picture of systemic failure in Gujarat, where builders continue to flourish while workers remain deprived of their legal entitlements, leaving the Patel government accused of abandoning labourers to die while protecting the interests of the construction lobby.

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*Senior journalist based in Ahmedabad

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