Linking Aadhaar With MGNREGS Mandatory Since Jan. 1

Newsreel Asia Insight #91
Jan. 02, 2024

Over 17.8 million “active” workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) can no longer look for work due to the central government’s mandate for the Aadhaar-Based Payment System (ABPS) for wage payments. The government asserts that workers were given ample time for compliance; however, civil society groups contend that the system is unreliable.

MGNREGS is a social security scheme in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. This assurance of employment is crucial in rural areas where job opportunities are often scarce.

Out of the 143.2 million active workers under the scheme, 17.8 million are yet to link their Aadhaar with their MGNREGS job cards and bank accounts, which became mandatory since Jan. 1, as reported by ThePrint. An active worker is one who has worked under the scheme for at least one day in the past three years.

The ABPS, launched in 2017 to ensure timely and transparent payments, was made mandatory from Feb. 1 2023. Despite extending the deadline four times due to protests and state requests, the rural development ministry has now refused any further extensions. The rural development ministry, in a statement, noted that exemptions could be considered on a case-by-case basis for technical or Aadhaar-related issues.

The Hindu reported that 34.8% of job card holders remained ineligible for this payment mode as of Dec. 27, 2023.

Data from the MGNREGS portal reveals that in Nagaland, only 20.6% of active workers qualify for ABPS payments, The Print noted. In Meghalaya, this figure is slightly higher at 21.5%, while Assam has 48.1% of its workforce eligible for these payments.

In contrast, Kerala stands out as the sole state with all active workers (100%) eligible for ABPS payments. Other states with high eligibility rates include Andhra Pradesh (99.1%), Tamil Nadu (97.9%), Himachal Pradesh (96.5%), Tripura (94.5%), and Karnataka (94.5%), where over 95% of workers are eligible for ABPS payments.

LibTech India, a consortium of academics and activists, highlighted that 76 million workers have been removed from the system in the past 21 months, according to Scroll.in, which also reported that NREGA Sangarsh Morcha, a workers’ collective, described the ABPS system as complex and unreliable for the workers.

The ABPS relies heavily on biometric authentication and digital technology. In rural areas, issues like poor internet connectivity, frequent power outages, and inadequate digital infrastructure can lead to system failures, making it difficult for workers to access their payments.

Further, biometric authentication can be unreliable, especially for manual labourers. Constant physical work can lead to worn fingerprints, resulting in authentication failures. Additionally, older individuals may face similar issues with biometric scanning.

Furthermore, a significant portion of the rural workforce lacks digital literacy. Navigating a digital payment system can be challenging for these individuals, leading to confusion and errors in accessing their entitled payments.

Chakradhar Buddha, a senior researcher at LibTech India, urged the government to revoke this mandatory implementation and compensate for lost work opportunities.

The Central government contended that the proportion of registered workers deemed ineligible holds no significance unless they actively pursue employment. Furthermore, it clarified that job cards are subject to deletion solely under certain specified conditions, and not on account of issues related to the payment system.

The opposition Congress party has criticised the government’s mandate, labeling it as “anti-poor” and a “cruel New Year gift.”

By ensuring employment, MGNREGS plays a vital role in providing income security to rural families, especially during lean agricultural seasons or times of economic hardship. In 2022, more than 11,280 individuals involved in the farming sector died by suicide, according to the National Crime Records Bureau.

According to a 2005 study by Parikh and Radhakrishna, the success of poverty reduction efforts hinges on agricultural growth, an objective that this scheme effectively addresses, as noted by Economic & Political Weekly. The introduction of the scheme triggered new interest in analysing intersectoral linkages in the rural economy. The demand for non-farm services like transport, education and carpentry is expected to rise due to increased income, both direct and indirect, noted a study by Saikia in 2009, according to EPW.

The scheme was initially seen as a short-term employment program to generate income and help consumption smoothing for poor households during lean agricultural seasons. However, its long-term benefits have been increasingly recognised.