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Economy
Mahesh

29/01/24 10:18 AM IST

Aadhaar-based pay a bad idea for MGNREGS

In News
  • Recently, the Rural Development Ministry made Aadhaar-Based Payment Systems (ABPS) mandatory in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Mode of wage payment in MGNREGA
  • There are two modes of wage payments in MGNREGS: account-based and ABPS.
  • For the first, wage transfers use the workers’ name, bank account number, and the IFSC code of the bank branch.
  • For ABPS, a few steps are minimally needed.
  • First, a worker’s Aadhaar number must be seeded with their job card, which means authenticating her job card details with the Aadhaar database.
  • Authentication is successful only when all the details including spelling and gender in the job cards match with those in the Aadhaar database.
  • Second, their Aadhaar must be linked to their bank account.
  • Third, the Aadhaar number of each worker must be mapped correctly through their bank branch with a software mapper of the National Payments Corporation of India, which acts as a clearing house of ABPS.
  • The Aadhaar number acts as the financial address and cash transferred gets deposited to the last Aadhaar-linked bank account.
  • Incorrectness in any of the above steps for ABPS means that the worker is denied work, does not receive wages, or is not paid in their preferred account. Consequently, workers have to spend hundreds of rupees and lose several days of their livelihood to fix these technological glitches.
Benefits
  • The government has claimed that ABPS would remove duplicate job cards, reduce wage payment delays, and have lower payment rejections.
  • Aside from some uses in assessing duplicates, the other claimed reasons stand on questionable grounds.
  • Two recently published research papers in Economic and Political Weekly show how officials have resorted to deleting job cards owing to pressure from the Union government to meet 100% of the Aadhaar seeding targets.
  • The Rural Development Ministry reported that there was a 247% increase in job card deletions in FY 2022–23 compared to previous years. In the last two years alone, job cards of over 7 crore workers got deleted.
  • As per the government’s own data, as on January 11, 2024, out of a total of 25.6 crore registered workers, only 16.9 crore workers are eligible for ABPS while all workers are eligible for account-based payments.
Way forward
  • The government has also claimed lower rejection rates in ABPS compared to account-based payments.
  • The paper finds no statistically significant difference between the rejection rates in the two modes of payments either.
  • In summary, the paper refutes the Ministry’s repeated claims of higher efficiency in wage payments using ABPS.
  • Timely payments is only a function of the government allocating adequate funds. With adequate funds, the time taken to pay workers will not be different whether it uses ABPS or account-based payments.
  • The difficulties in resolving problems with ABPS far outweigh the difficulties in resolving problems with account-based payments and so we advocate for account-based payments.
Source- The Hindu

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