Setting Up of Business, Industrial and Labour Laws · The Child and Adolescent Labour (Prohibition and Regulation) Act

Child and Adolescent Labour Rehabilitation Fund and Rehabilitation of Rescued Children

Updated 11 October 2026 · Fact-checked

Section 14B requires the appropriate Government to set up a Rehabilitation Fund in every district, or for two or more districts. Fines recovered from employers are credited to it, and the Government adds ₹15,000 for each child or adolescent. The money plus interest is paid to the child. Section 14C says rescued children are rehabilitated under other laws in force.

Understand Rehabilitation Fund and Rehabilitation of Rescued Children

The Act punishes employers who hire children or adolescents in breach of the law. Punishing the employer does not help the child who was working. The 2016 amendment therefore added two sections that focus on the child: Section 14B and Section 14C. Both were inserted with effect from 1 September 2016.

Section 14B creates a Child and Adolescent Labour Rehabilitation Fund. The appropriate Government must constitute it in every district, or for two or more districts together. It is a duty ("shall constitute"), not a choice.

Two kinds of money go in. First, the fine realised from the employer of the child or adolescent, within the jurisdiction of that district or districts. Second, the appropriate Government must credit ₹15,000 for each child or adolescent for whom a fine amount has been credited. So the Government's contribution is per child, and it depends on a fine having been credited for that child.

The Government decides whether the money is deposited in banks or invested, and in what manner. The amount deposited or invested, along with the interest accrued, must be paid to the child or adolescent in whose favour it was credited. The manner of payment is left to rules. Section 18(2)(f) lets the appropriate Government make rules on this.

Section 14C deals with the child or adolescent who is employed in contravention of the Act and is rescued. Such a person shall be rehabilitated in accordance with the laws for the time being in force. The Act itself gives no separate rehabilitation scheme here. It points to other laws.

The term appropriate Government has a special meaning in Section 2. It is the Central Government for establishments under its control, a railway administration, a major port, a mine or an oilfield. In all other cases it is the State Government. The Explanation to Section 14B adds that for this section the Central Government includes the Administrator or Lieutenant Governor of a Union territory under article 239A.

Key rules to remember

Constitution of the Fund (Section 14B(1)): Fund in every district, or for 2 or more districts; credit = fine realised from the employer within that jurisdiction; The appropriate Government must constitute the Fund. Fines from employers of children and adolescents are credited to it.
Government contribution (Section 14B(2)): ₹15,000 × number of children or adolescents for whom the fine has been credited; The amount is ₹15,000 per child or adolescent. It is paid by the appropriate Government, not the employer.
Handling of the money (Section 14B(3)): Deposit in banks or invest, as the appropriate Government decides; The Act leaves the mode of deposit or investment to the Government.
Payment to the child (Section 14B(4)): Amount deposited or invested + accrued interest = paid to the child or adolescent in whose favour it is credited; The manner of payment is prescribed by rules under Section 18(2)(f).
Rehabilitation of rescued child (Section 14C): Rescued child or adolescent employed in contravention of the Act = rehabilitated under the laws for the time being in force; Applies to those employed against the Act and rescued.
Appropriate Government (Section 2(ia) and Explanation to Section 14B): Central Government for Central establishments, railways, major ports, mines, oilfields; State Government otherwise; Central includes Administrator or Lieutenant Governor of a UT under article 239A; Needed to say who sets up the Fund.

How to solve Rehabilitation Fund and Rehabilitation of Rescued Children questions

Use this method for any question on the Fund or on rescued children. Write the provision first, then apply the facts, then conclude.

1Identify the section. Fund, fine and ₹15,000 point to Section 14B. A rescued child and rehabilitation point to Section 14C.
2Check who the person is. Under Section 2, a child has not completed fourteenth year (or the higher age under the RTE Act, 2009). An adolescent has completed fourteen but not eighteen.
3State who constitutes the Fund: the appropriate Government, in every district or for two or more districts. Name the Central or State Government as the facts require.
4List what is credited: the fine realised from the employer within the district, and ₹15,000 for each child or adolescent for whom the fine is credited.
5State what happens to the money: deposited in banks or invested as the Government decides, and the amount with accrued interest is paid to the child in the prescribed manner.
6For a rescued child, apply Section 14C: rehabilitation under the laws in force. Do not invent a scheme that the Act does not state.
7Calculate if needed. Multiply ₹15,000 by the number of children for whom a fine was credited. Add the fine separately.
8Close with a clear conclusion that cites Section 14B or 14C.

Quickest way: Fine plus ₹15,000 per child, then pay out with interest

When to use it: Use this for short-answer questions and for numerical questions on how much goes into the Fund.

Fund: appropriate Government, every district or group of districts.
Inflow 1: employer's fine. Inflow 2: ₹15,000 per child or adolescent from Government.
Parking: bank deposit or investment as Government decides.
Outflow: whole amount plus interest goes to the child, as prescribed.
Rescue: Section 14C, rehabilitation under laws in force.
Write the section number next to each point.

Common mistakes in Rehabilitation Fund and Rehabilitation of Rescued Children

Saying the employer pays the ₹15,000.
Students link the fine and the ₹15,000 together as one payment.
Fix: The fine comes from the employer. The ₹15,000 is credited by the appropriate Government under Section 14B(2).
Treating the ₹15,000 as a lump sum for the whole Fund.
The wording is easy to read quickly.
Fix: It is ₹15,000 for each child or adolescent for whom the fine amount has been credited. Multiply by the number of children.
Saying the Fund is paid to the State or to NGOs.
Students assume a general welfare fund.
Fix: Section 14B(4) says the amount and its interest are paid to the child or adolescent in whose favour it is credited.
Saying Section 14C creates a separate rehabilitation scheme with fixed benefits.
Students fill gaps from general knowledge.
Fix: Section 14C only says the rescued child shall be rehabilitated in accordance with the laws for the time being in force.
Limiting the Fund to children and forgetting adolescents.
The older title of the Act spoke only of child labour.
Fix: Both sections say child or adolescent. The Act is now titled the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986.
Forgetting that the Fund is set up by the appropriate Government, and that a UT Administrator counts as Central Government here.
Students write only State Government.
Fix: Use the Section 2 definition and the Explanation to Section 14B.

Worked examples

Example 1

Explain how the Child and Adolescent Labour Rehabilitation Fund is constituted and operated under the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986.

Show the solution

Provision: Section 14B(1) requires the appropriate Government to constitute a Fund in every district or for two or more districts, called the Child and Adolescent Labour Rehabilitation Fund.
Credits: the fine realised from the employer of the child and adolescent within the jurisdiction of the district or districts is credited. Under Section 14B(2), the appropriate Government also credits ₹15,000 for each child or adolescent for whom the fine has been credited.
Handling: under Section 14B(3), the amount is deposited in banks or invested in the manner the appropriate Government decides.
Payment: under Section 14B(4), the amount deposited or invested and the accrued interest are paid to the child or adolescent in whose favour it is credited, in the prescribed manner. Section 18(2)(f) allows rules on this.
Meaning of appropriate Government: Central Government for establishments under its control, railways, major ports, mines and oilfields, and State Government otherwise. For Section 14B, the Central Government includes the Administrator or Lieutenant Governor of a Union territory under article 239A.

Answer: The appropriate Government must constitute the Fund district-wise or for a group of districts. Employers' fines and ₹15,000 per child from the Government are credited. The money is deposited or invested, and the amount with interest is paid to the child under Section 14B.

Example 2

In a district, a workshop owner is fined for employing 4 children in contravention of Section 3. Fines of ₹30,000 for each of the 4 cases are realised and credited to the district Fund. How much does the appropriate Government credit under Section 14B(2), and what is the total credited to the Fund? What happens to a child rescued from the workshop?

Show the solution

Section 14B(2): ₹15,000 is credited by the appropriate Government for each child for whom the fine has been credited.
Number of children: 4. Government credit = 4 × ₹15,000 = ₹60,000.
Fines credited: 4 × ₹30,000 = ₹1,20,000. This is within the Act's range of ₹20,000 to ₹50,000 under Section 14(1).
Total credited = ₹1,20,000 + ₹60,000 = ₹1,80,000.
Under Section 14B(4), the amount credited in favour of each child, with interest, is paid to that child in the prescribed manner.
Under Section 14C, each rescued child, being employed in contravention of the Act, shall be rehabilitated in accordance with the laws for the time being in force.

Answer: The Government credits ₹60,000. The total credited is ₹1,80,000. Each child receives the amount credited in their favour with interest under Section 14B(4), and is rehabilitated under Section 14C.

Exam tips

Learn Section 14B as four points: constitute, credit (fine plus ₹15,000), deposit or invest, pay to the child with interest.
Remember that ₹15,000 is per child or adolescent and comes from the appropriate Government. Numerical questions often test this.
For Section 14C, keep the answer short and exact: rescued, employed in contravention, rehabilitated under laws in force.
Always say child or adolescent, and cite the section number in your conclusion.
Link to Section 14 penalties when the question mentions fines. Fine for employing a child or adolescent is ₹20,000 to ₹50,000, or imprisonment, or both.

Practice questions from The Child and Adolescent Labour (Prohibition and Regulation) Act

Rehabilitation Fund and Rehabilitation of Rescued Children: frequently asked questions

Who sets up the Child and Adolescent Labour Rehabilitation Fund?

The appropriate Government sets it up under Section 14B(1). It can be one Fund for each district or one for two or more districts. The appropriate Government is the Central Government for its own establishments, railways, major ports, mines and oilfields, and the State Government otherwise.

How much does the Government add to the Fund for each child?

Section 14B(2) says the appropriate Government credits ₹15,000 for each child or adolescent for whom the fine amount has been credited. This is in addition to the fine paid by the employer.

Who receives the money in the Rehabilitation Fund?

The child or adolescent in whose favour the amount is credited. Under Section 14B(4), the amount deposited or invested, along with accrued interest, is paid to that child in the prescribed manner.

What does Section 14C say about rescued children?

It says a child or adolescent employed in contravention of the Act and rescued shall be rehabilitated in accordance with the laws for the time being in force. The section does not set out a separate scheme.