Context: 

This editorial is based on the news “Aadhaar-based pay a bad idea for MGNREGS” which was published in the Hindu. On January 1, the Rural Development Ministry made Aadhaar-Based Payment Systems (ABPS) mandatory in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). 

Adoption of Aadhaar Based Payment System For MGNREGS Workers

• Aadhaar Seeding Targets: Officials deleting job cards owing to pressure from the Union government to meet 100% of the Aadhaar seeding targets.
• Modes of Wage Payments in MGNREGS: The MGNREGS has two modes of wage payments: 
  • Account-Based Payments: Wage transfers using workers’ name, bank account number, and IFSC code.
  • Aadhaar Based Payment: Aadhaar number seeding, linking to bank account, and mapping through the National Payments Corporation.

Challenges of Aadhaar Based Payment System on Workers

• Livelihood Difficulties: Issues with incorrect authentication and mapping in Aadhaar-based payment systems cause financial and livelihood difficulties for workers.
• Denied Work: Incorrectness in Aadhaar Based Payment System means workers are denied work or wages.
• Financial Strain: Workers lose money and days of livelihood to fix technological glitches.
• Audits and Deletions in Job Cards: Publicly available audits on job card deletions and the gains of the Aadhaar seeding targets are contentious.
  • Lack of available audits on job card deletions.

Concerns with Ministry’s Justification for Aadhaar Based Payment System

• Lack of Credible Evidence: The Ministry’s justification for making Aadhaar Based Payment System mandatory in MGNREGS lacks credible evidence.
  • Evidence by LibTech: No credible evidence supporting the decision provided, despite the reference to LibTech’s working paper.
  • Misrepresentation of Paper Endorsement: The Ministry misrepresents the findings of the paper, incorrectly claiming an endorsement of ABPS.
• Evaluating Claims of Aadhaar Based Payment System: The government’s claims of the benefits of Aadhaar Based Payment System in MGNREGS are refuted by recent research.
  • Exaggerated Claims: Evidence suggesting exaggerated savings claims due to Aadhaar.
  • Delete Duplicates: Challenges in assessing and removing duplicate job cards.
  • Questionable Efficiency: No statistically significant difference in efficiency between ABPS and account-based payments.
• Aadhaar Based Payment System vs. Account-Based Payments: Difficulties in resolving problems with Aadhaar Based Payment System  outweigh those with account-based payments.

Way Forward 

• Role of Adequate Funds: The timely payments are primarily a function of the government allocating adequate funds.
• Efficiency and Timeliness: Efficiency and timeliness are a function of adequate funds allocation.
• Discussion with Stakeholders: All associated stakeholders should be connected by the government to come out with mutually accepted decisions that will lead to positive outcomes.