Property tax cess may fund welfare of unorganised sector workers

Bengaluru: The Karnataka Labour Department is eyeing a portion of cess being levied as part of the property tax to generate a much-needed welfare fund for workers in the unorganised sector. 

Labour Minister Santhosh Lad on Thursday chaired a meeting of officials from the Labour, Health, Rural Development and Panchayat Raj (RDPR) and Urban Development departments, where a proposal to redistribute the property cess to fund the welfare of unorganised workers was discussed. 

Speaking to DH, Lad said: “There won’t be any extra charge on the taxpayers. We have merely sought a redistribution so that our department gets 7 per cent of the cess. Once the departments send their proposals, we will discuss the issue in the Cabinet.”

Department officials noted that a 26 per cent cess is levied on the property tax (15 per cent health cess, 6 per cent library cess, 3 per cent beggary cess and 2 per cent land and transport cess).

Of this, the Labour Department has asked for a diversion of 5 per cent from the health cess and 2 per cent from the library cess to build a corpus for unorganised workers.

“We have sought the written opinion of the different departments. Once we obtain it, we will submit it to the Cabinet,” Principal Secretary (Labour) Mohammed Mohsin said.

The proposal to have a separate cess fund for the Karnataka State Unorganised Sector Workers Social Security Board has been a long-pending demand of labour unions. With no cess fund, the board is entirely dependent on government grants.

Recently, when the board sanctioned a maximum
Rs 12.5 crore for accident benefits to unorganised workers, it relied on the grant the previous BJP government had released during the Covid period to provide a one-time compensation to unorganised sector workers.   

Trade unions have alleged that due to the absence of a cess fund, several unorganised sector workers have registered under the Building and Other Construction Workers Welfare Board, which has a separate cess fund for the welfare of its member workers.

Unions feel a separate cess fund for the unorganised sector will help to filter the numbers in both boards.