Context

The government has mandated the use of Aadhaar-based payment systems (ABPS) for the disbursement of wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.

Background

• The initiation of the ABPS for MGNREGS workers began on January 30, 2023.
• The recent extension, until December 31, 2023, marked the fifth prolongation of the deadline, allowing state governments time to align databases.
• However, this move has been accompanied by a notable surge in deletions of MGNREGA job cards, raising questions about the link between the mandatory ABPS and the reduction in the number of active workers.

Need for ABPS Implementation:

• The government's decision to make ABPS mandatory stems from its intention to streamline wage disbursement and enhance transparency.
• The system requires workers' Aadhaar details to be linked to their job cards, aiming to expedite payments and minimize rejections.

Ineligibility Statistics:

• According to data from the Union Rural Development Ministry, as of December 27, 34.8% of job card holders remain ineligible for ABPS.
• The criteria for eligibility are based on active workers, defined as those who have worked at least one day over the last three financial years.
• Of the 25 crore registered workers, 12.7% of active workers are still not eligible for ABPS.

Deletions and Pressures on States:

• Ground reports and anecdotal evidence suggest that states, under pressure to achieve 100% ABPS-eligible job cards, have deleted a significant number of cards.
• Reasons for deletions include discrepancies between Aadhaar and job card details, such as variations in names.
• LibTech India reports that 7.6 crore workers have been deleted from the system in the past 21 months, a figure higher than the number now deemed ineligible for payment.

Activists' Concerns:

• Activists argue that enforcing ABPS with a substantial portion of MGNREGA workers rendered ineligible infringes upon the right to work.
• This, they claim, contradicts the spirit of the Act passed by Parliament.
• They call for the revocation of mandatory ABPS implementation, the reinstatement of erroneously deleted workers, and compensation for the loss of work opportunities.

ABPS Mechanism and Government's Perspective:

• ABPS utilizes the worker's unique 12-digit Aadhaar number as their financial address.
• For a worker to be paid under ABPS, their Aadhaar details must be linked to their job card, bank account, and the National Payments Corporation of India (NPCI) database.
• The government asserts that ABPS implementation will enhance efficiency, prevent leaks, ensure prompt payments, and reduce rejections.

Conclusion:

• The move towards mandatory Aadhaar-linked payments for MGNREGS workers is a significant step in the digitization of financial processes.
• However, concerns about eligibility criteria, deletions, and potential denial of the right to work underscore the need for a balanced approach that ensures digital financial inclusion without adversely impacting vulnerable workers.
• The government must address these concerns and consider alternatives to achieve a seamless transition to ABPS while safeguarding the interests of MGNREGA workers.