Staggering 265-fold hike in labour levy at ports killing coastal shipping

PortThe government’s practice of continuing to charge notional labour cess on coastal cargo operations, despite the fact that most ports are now mechanised and do not require manpower for loading and unloading, is taking a toll on the country’s coastal shipping operators. Many are losing business to rail and road transport, and to ports run by the private sector. In some cases, the levy for a single labour job is as high as 265 times the total labour cost. Some ports have reduced it to 150 times, but others like Kolkata, Cochin and Mumbai continue to charge the cess in the absence of other sources of revenue. Experts say that with more and more ports being mechanised, labour cess is not required. Port mechanisation initiative is redundant if the government continues with the practice of charging notional labour cess to the cargo companies even when the coastal cargo operator does not use services of the port, the experts added. Earlier, there was a requirement for labour at the time of loading and unloading of cargo, but port mechanisation has minimised the need for manpower. Coastal cargo operators do not need manual intervention for their operations and payment of a levy over and above the labour employed costs them dear. The former shipping secretary says, “Labour was required and, therefore, became part of the deal and later mechanisation took place. The funds collected from the levy are utilised towards pension contribution by the port authorities.

Source: Business Standard