Institutions established under the Act



Institutions established under the Act : 4.1 Under the Merchant Shipping Act, 1958 the following Institutions have been established.

(1) The National Shipping Board - Under Section 4

(2) National Welfare Board for Seafarers Under Section 218.

Apart from above institutions, another Statutory Organization is the Seamen's Provident Fund Organization, which has been set up under the Seamen's Provident Fund Act. 1966.

4.2.1 Objective & Function:-

The National Shipping Board has been set up as the Highest Advisory Body on matters related to Indian Shipping Fraternity including its expansion, liberalization policies, development thereof and to advice on such matters arising out of the Merchant Shipping Act, 1958. As early in 1947 the establishment of such institution was recommended by the Reconstruction policy Sub-committee. The ship owners too urged to have such body in existence. In 1958 when the Merchant Shipping Law was revised and consolidated, the opportunity was taken to provide for creation of such permanent statutory authority called the "NATIONAL SHIPPING BOARD". Consequent upon the efforts from all quarters of the shipping fraternity, the National Shipping Board came into existence on 1st March, 1959.


Under the provisions of Section 4 Sub-rule (2) & (3) of the Merchant Shipping Act, 1958, the constitution of the Board is as under:-
(a) six members elected by Parliament, four by Lok Sabha from among its members and the other two by the Rajya Sabha from among its members.
(b) In order to represent:-

(i) The Central Government
(ii) Shipowners,
(iii) Seamen, and
(vi) Such other interests as in the opinion of the Central Government ought to be represented on the Board, there shall be such numbers of other members not exceeding 16 as the Central Government may deem fit to appoint on the Board.

4.2.3 Under the provisions of Section 4 (3) of the Merchant Shipping Act, 1958 the Central Government has the power to nominate one of the members of the Board, so constituted in the above manner, to be the CHAIRMAN OF THE BOARD.

As provided in Government of India, Ministry of Transport & Communication Notification No. G. S. R. 92 dated 18th January, 1960 in its Rule 3, the National Shipping Board, shall be established for a period of 2 years at the first instance and thereafter it shall be re-established at the end of the every two years.


In order to highlight various problems which are being faced by Indian Shipping from time to time, the advice of the National Shipping Board has been of immense importance. Some of the matters like Fixation of the plan targets for Shipping tonnage, the limit of foreign participation in Indian Shipping Companies, the quantum of development rebate for Indian Shipping and the problems of the sailing vessels industry, could be solved with due consultation and the recommendations by this body, to the Government. So in general on all matters like development of coastal Shipping and such other related matters for supporting India's Trade, this statutory organization is rendering the services in solving the above narrated subjects. The Secretariat of the National Shipping Board has prepared well adductive notes on each subject which is being used as reference.


4.3.1 Under the provisions of section 218(1) of the Merchant Shipping Act, 1958 the National Welfare Board for seafarers has been established/set up by the Government of India, for advising them on the matters and measures to be taken for promoting the welfare of seamen (Whether ashore or on Board the vessel) generally and in particular the following:-

(a) Establishment of Sailor's Home or Boarding & Lodging houses for seamen.
(b) Establishment of Libraries, Recreations Rooms, Cafeteria and club Houses and such other welfare amenities for the social and cultural development of seamen.
(c) Establishment of Hospitals, Nurseries, Rest Houses, Holiday Resort, as well easily availability of medicines for off shore seamen/at home or off article.
(d) Establishment of Free Reading Books for up-grading educational standard and such other related facilities at home, if they are off Articled seamen.


The Board is headed by the Union Minister of Ministry of Surface Transport, New Delhi and comprised of Members of Parliament, representatives of concerned ministries of Govt. of India, Maritime State Governments, Port Trusts, Shipowners, seafarers, Merchant Navy Officers, Voluntary societies and such other statutory bodies/autonomous organizations, dealing with the social Welfare activities like Tata Institute of Social Sciences, Deonar, Mumbai, Nirmala Niketan, Churchgate, Mumbai etc.

4.3.3 TENURE:

The Board is constituted every two years.


On 4th June, 1956 the inaugural activities were commenced wherein various recommendations were made, in respect of Seamen's Welfare, some of which have been narrated here below:-

1) Institution of Welfare levy on Shipowners for providing a continuous flow of revenue for financing seamen's welfare program.

2) Formation of Seamen's Welfare Fund Society for financing Welfare activities for seamen.

3) Observance of Merchant Navy Flag Day and National maritime day in commemoration of personnel rendered their services for the cause of Shipping fraternity.

4) Establishment of Hostel - cum - Club for seamen at Mumbai/Calcutta/Madras.

5) Provision of Medical treatment of off Articled seamen.

6) Introduction of Social Security measures, like Seamen's Provident Scheme & Seamen's Gratuity Scheme.

4.4 Seamen's Provident Fund Scheme:

4.4.1 Introduction: The National Welfare Board for Seafarers in its meeting held on 11th January 1964 had recommended for the establishment of seamen's provident fund scheme. Accordingly, Seamen's Provident Fund Act 1966, was enacted and Seamen's Provident Fund Scheme was promulgated. The scheme was given retrospective application and was deem to have come into force on 1.7.1964. The Seamen's Provident Fund Organization was set up on 9 July 1966.

4.4.2 Constitution : Under the Seamen's Provident Fund Act, a Board or Trustee is appointed from Govt., Shipowners and Seafarers Organization, Director General of Shipping is the Chairman of the Board and Seamen's Provident Fund Commissioner is the Secretary of the Board.

4.4.3 Tenure: The term of the office of the trustee of the Board shall be fire years commencing from the date on which their appointment was notified in official Gazette.

4.4.4 The Scheme: This is a contributory scheme and employers are required to deposit the Seamen's Provident Fund contributing in respect of Seamen employed by them with their matching contribution after the termination of each voyage to the commissioner SPF Organization. In the beginning the rate of contribution was 8%. The prevailing rate of contribution is 10% of the wages, leave wages, seniority supplement and 10% of the supplement payable to the seamen.

Every seamen engaged on Article of Agreement on or before 1st July, 1964, is entitled and required to become member w.e.f. 1.7.1964 and those Seamen who are not a member and is engaged after 1st July 1964 on Articles of Agreement for service on board a ship is entitled and required to became a member w.e.f. the date of such engagement. The Master, Navigating or Engineer Officer, Radio Officer, Nautical Officer, Welfare Officer, Purser, Electrician, Nurse, Musician,Pilot, Deck Barber and apprentice are not covered under this scheme.

4.4.5 All moneys belonging to the fund are invested in the securities as per the pattern prescribed by the Ministry of Finance. The existing pattern of investment is as follows: -

Sr. No. Securities Investment in Percentage

i. (a) Govt. Securities as defined in Section 2 of the Public Debt. Act, 1964 created and issued by any State Government. Fifteen percent
(b) Any other negotiable securities the principal whereon and interest where on is fully and unconditionally granted by the central Govt. or any State Govt. ii. Special Deposit Scheme introduced by Govt. of India, Ministry of Finance, dept.. of Economic Affairs vide notification No. F 16 (1-PD)/75 dtd. 30th June, 1975 as extended by notification No. F 16 (B) - PD/8 dated 12th June, 1985. Fifty five percent
iii. Bonds/Securities of Public Sector financial institutions including banks. Thirty percent

4.4.6 The pay and allowance of the employees of the Board and other administrative expenses of the Board are met from the administrative charges levied on the employers as approved by the Govt. from time to time.

4.4.7 The accumulation in the fund are paid to the seamen members on retirement from seafaring profession on attaining the age of superannuation or on account of permanent incapacity for work due to bodily or mentally infirmity.

The needy seamen are also allowed non-refundable withdrawals for the longer period of unemployment, sickness, purchase of dwelling house, marriage of a member of family of seaman or higher education of the children. LIC premium is also paid from the account of seaman concerned, if he so desires.


The Commissioner, Seamen's Provident Fund Organization, Mumbai, has rendered valuable services to the cause of seamen in the form of providing a Social Security measures to the Indian seamen in particular and shipping fraternity in general.


The Gratuity Scheme for seamen is another scheme for stepping in for Social Security, which has taken effect from 1st June, 1964 for those who are on Company Roster and also on General Roster. The Scheme has been mutually agreed upon by the Seafarers and Shipowners on a Voluntary basis and have included the same in the National Marine Board Agreement 1974. It has fallen into two parts, one relating to seamen who have no regular Shipping Company's employees and for those seamen who are regularly employed by particular shipping companies.

As regards General Roster seamen Gratuity the same is calculated at the rate of 15 days basic wages of each year of effective service performed by a seaman, after 1st January, 1954, wages for this purpose being taken at the rate of the category held on 1st June, 1964. For the purpose of calculating Gratuity, it will be counted at a rate of one day's pay for every 24 days Article service to be rendered by a seaman borne on General Roster. All seaman are eligible for payment of Gratuity on completion of 10 years aggregate effective service.

Company Roster seamen are entitled to receive Gratuity at the rate of 15 days basic wages for each completed year Article of Agreement Service and it is to be calculated from the time that seamen entered into seafaring profession, the rate of basic wages computed for the purpose of being the basic wages last drawn. The seamen born on General Roster and Company Roster, both are entitled in computing the period of service and earned leave is also to be taken into account.

The Company Roster seamen are paid their Gratuity by the respective Company on whose rosters they are registered, while the payment of Gratuity to General Roster seamen is being effected at present through the Shipping Master by collecting the amounts from different Shipping companies employing these seamen. Establishment of a Gratuity fund for seamen on General Roster is being considered at present. Setting up of such a fund would make payment of Gratuity to seamen borne on General Roster more expeditiously and systematic than under the present arrangements.

Go Top

Go Back