Aadhaar-Based Payment System Becomes Mandatory for MGNREGS Workers

Context: From January 01, 2024, all wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme must be paid through an Aadhaar-based payment system (ABPS).

• The first order to enforce ABPS was issued on January 30, 2023, followed by extensions till February 1, March 31, June 30, August 31, and finally December 31. 

Centre Makes Aadhaar-Based Payment System Mandatory for MGNREGS Workers: Concerns Arising with this Mandate

• • Crores Of Workers Still Ineligible: Till December 27, 12.7% of these active workers are still not eligible for ABPS. Of the 25.25 crore registered workers under the flagship rural jobs scheme, 14.35 crore are categorized as active workers. 
• Deletion of Job Cards: Facing pressure from the Union government to have 100% ABPS-eligible job cards, States have deleted a number of cards which were not eligible for Aadhaar payments. 
  • As per LibTech India, 7.6 crore workers have been deleted from the system over the last 21 months.  However, the Union Government has asked State governments to take a generous view, allowing for cases where linking has not been done for any genuine reason.   

Denying Right To Work: With mandatory ABPS, more than one-third of the total registered MGNREGS workers will inevitably lead to the denial of the right to work. 

Need To Do:

Abolition of Mandatory Provision: The Union government needs to revoke this mandatory implementation of ABPS.

Need to Compensate: The Union government needs to direct the States to reinstate erroneously deleted workers and provide due compensation for the loss of work opportunities. 

About Aadhaar-Based Payment System (ABPS)

• Introduction:  Aadhaar-Based Payment System was first introduced in 2017.
• Use of Aadhar Number: ABPS uses the worker’s unique 12-digit Aadhaar number as their financial address.
• A Linking Process: To be paid under ABPS, a worker’s Aadhaar details must be seeded to workers’ job card.
  • Their Aadhaar details must be linked with their bank account and Aadhaar must be mapped with the National Payments Corporation of India (NCPI) database.
  • Also, the bank’s institutional identification number must itself be mapped with the NPCI database. 
• Significance: The ABPS implementation will plug leaks, ensure speedy payments, reduce rejection, promote transparency in wage payments and prevent any disruptions in workers’ wage payments caused by issues with their bank accounts.

To Read More: Mahatma Gandhi National Rural Employment Guarantee Act, 2005

News Source: The Hindu

DOWNLOAD PDF