18.3% MGNREGS workers out of Aadhaar-based wage system

Fourth extension for mandatory payments through it ends tomorrow; NGO says 1.2 crore people in top five States will not be paid because their accounts are not enabled for the new system

Updated - August 30, 2023 12:39 pm IST

Published - August 29, 2023 10:29 pm IST - New Delhi

ABPS uses the worker’s unique 12-digit Aadhaar number as their financial address. 

ABPS uses the worker’s unique 12-digit Aadhaar number as their financial address.  | Photo Credit: M.K. ANANTH

The fourth extension for mandatory payments under Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) via Aadhaar Based Payments System (ABPS) ends on August 31. As the numbers stand, out of the total 26 crore job card holders, 41.1% are still not eligible for this mode of payment. The Ministry of Rural Development has ruled out any more extensions, arguing that among the active workers, only 18.3% are ineligible.

ABPS uses the worker’s unique 12-digit Aadhaar number as their financial address. For ABPS, a worker’s Aadhaar details must be seeded with their job card and bank account. Aadhaar details should also be mapped with the National Payments Corporation of India (NPCI) database. Finally, the bank’s institutional identification number (IIN) must itself be mapped with the NPCI database. 

Also Read | Explained | The funding and demand for MGNREGA

As per an analysis done by non-profit organisation LibTech India, even among active workers, the percentage of ineligibility varies from State to State. Between the top five States in terms of active MNREGA workers - U.P., Bihar, West Bengal, Madhya Pradesh, Rajasthan - 1.2 crore will no longer be eligible for payments because they do not have ABPS-enabled accounts. The picture from the Northeast too is dismal. In Assam which has more than 63 lakh workers, 61.2% are not eligible and in Nagaland with 6 lakh beneficiaries, nearly 80% lack an ABPS account. 

The government contends that ABPS accounts plug leaks, ensure speedy payments, and reduce rejections. However, a research paper authored by five scholars, four of whom are affiliated with LibTech India, reveals that the statistics do not hold up this claim. Their analysis is based on 31.36 million transactions across 10 States from the Financial Year 2021-22 recorded in the central database managed by the Ministry. The total amount involved in these transactions is ₹46.02 billion. 

Also Read | Data | MGNREGS woes: Payment delays, Aadhaar seeding troubles and budget cuts 

As per the paper, which is an analysis of payments to normal accounts versus Aadhaar-linked accounts, 36% of transactions were processed in seven days for normal account payments and 39% for ABPS. “Analysis reveals that there is no statistically significant difference in the time taken to process payments between the two payment types,” Rajendran Narayanan, one of the authors of the paper said. Mr. Narayanan teaches at the Azim Premji University in Bangalore.  

Mr. Narayanan said the research also disproves claims that ABPS reduces rejections. “We find there is no statistically significant difference; 2.85% of account payments were rejected while 2.1% of ABPS payments were rejected,” he added. 

Also Read | 18 States yet to receive ₹4,700 crore in MGNREGS wages from Union government

On the contrary, Mr. Narayanan said that there is significant anecdotal evidence that ABPS payments lead to a host of challenges for the workers. “The complaints vary from payments diverted to some other account of the same worker or misdirected payments to different account holders due to Aadhaar-linking errors. Mass job card deletions due to non-compliance with ABPS requirements have also been reported,” he added. 

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