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CS Professional · Labour Laws and Practice · Law of Welfare and Working Condition

A State Government holds a balance in the social security fund built from composition amounts and penalties. It wants to move part of the balance to a fund created under another law for the welfare of unorganised workers. Under the Code, what is the position?

The transfer is allowed. The fund is administered in the manner the appropriate Government prescribes, and that manner can include moving money to a fund under another law, provided that fund is for the welfare of unorganised workers. Refunds to employers or transfers for organised workers are not contemplated.

  1. ANot allowed, because the fund can only be spent directly by the State Government
  2. BAllowed, as the appropriate Government may prescribe a transfer to a fund under another law for unorganised workers' welfareCorrect
  3. CAllowed only if the amount is first refunded to the employers who paid it
  4. DAllowed only for transfers to a fund for organised-sector employees

Explanation

Section 115(3) says the fund is administered and expended for unorganised workers' welfare in the prescribed manner, including transfer to any fund under any other law for the welfare of unorganised workers. A refund to employers or a transfer to organised-sector funds is not contemplated.

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