Karnataka to implement GIS-based cess collection in construction sector to augment revenue
In a bid to enhance the amount of cess accrued to the Karnataka Building and Other Construction Workers Welfare Board, the State government will implement Geographic Information System (GIS)-based cess collection through which construction work in private sector will be monitored, from this year.
While the total cess collected annually is about ₹1,000 crore, it is estimated that the potential for cess collection is between ₹1,800 crore to ₹2,000 crore. Most of the cess collected currently comes from government project, and the focus is to improve cess collection from private construction.
“The idea is to prevent pilferage and improve cess collection. The GIS mapping will be integrated with the system to monitor and collect cess mostly from the any kind of construction activity in private sector,” Labour Minister Santosh Lad told The Hindu. The cess collection will be expanded across the State starting from the local bodies, and will involve even layout development, he added.
Depleting corpus
The cess, currently around ₹6,700 crore in the board’s corpus, is being used for the welfare of construction and allied workers. While the cess collection has been around ₹700 crore to ₹1,000 crore in the last few years, funding for welfare measures has been on the rise, causing concern over depleting cess corpus.
Mr. Lad said that the government was in the process of finalising the tender for the GIS-based monitoring, and that they would hold a discussion with Chief Minister Siddaramaiah. “In all likelihood, the project could take off in the next two to three months,” he said.
The cess amount collected in 2007-2008 was around ₹45 crore when the cess collection started. So far, a total of over ₹12,500 crore has been collected till the end of 2022-2023 that included interest proceeds from fixed deposit and savings account of nearly ₹3,300 crore. After spending on social welfare schemes over the years, the current corpus remains around ₹6,700 crore. In Karnataka, the cess collected is 1% of the total project cost approved as per building plan.
‘Welcome move’
“This is a welcome move. We have already given a proposal to identify projects that have been taken up without paying cess in urban areas. They should prioritise municipal corporation areas where construction activity is high in the State instead of spreading it across,” said K. Mahantesh, general secretary of Karnataka Building and Construction Workers’ Federation. The government should also look at the recovery of the cess from big builders who have kept dues, he added.
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