Centre defends Aadhaar-based wage payment, says it ensures greater inclusion, efficiency

• The Union Rural Development Ministry in a statement issued on Sunday (October 27, 2024) defended using the Aadhaar Based Payment System (ABPS), calling it a “major reform” that helps in better targeting, increased efficiency, reducing delays in payments, and greater inclusion by curbing leakages.

Highlights:

• The Union Rural Development Ministry recently defended the Aadhaar Based Payment System (ABPS) as a "major reform" intended to enhance the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by improving targeting, efficiency, and transparency in wage payments.
• The statement came in response to findings by Lib Tech, an activist and academic consortium, which reported a high rate of worker deletions from MGNREGS, allegedly linked to the government's push for mandatory ABPS for wage payments since January 1, 2024.

Key Points from the Ministry's Statement:

• Increased Efficiency and Direct Benefit Transfer: ABPS allows direct wage transfers to workers' bank accounts via Aadhaar-linked identification, minimizing intermediary delays and addressing leakages in fund disbursement. The Ministry claims this streamlined approach improves efficiency, accountability, and transparency in wage distribution.
• Current ABPS Coverage: As of October 26, the Ministry states that 13.10 crore active MGNREGS workers (99.3% of active workers) are eligible for ABPS payments. The Ministry insists that those without ABPS-linked accounts are not excluded from job registration or payments.
• Deletion of Workers and Job Card Verification: According to Lib Tech’s report, 84.8 lakh workers were removed from MGNREGS from April to September, while only 45.4 lakh new workers were added, leading to a net reduction of 39.3 lakh workers. The Ministry, however, attributes worker deletions to a routine job card verification process. It denies that ABPS is responsible for these deletions, explaining that Aadhaar serves only as a tool to prevent duplicate entries.
• Ongoing Bank Coordination: The Ministry has advised states and Union Territories to work with banks to ensure timely Aadhaar seeding in cases where ABPS eligibility is still pending, aiming to reduce gaps in beneficiary verification and inclusion.
• The Ministry's stance highlights its view of ABPS as a transformative measure to curb fraud and ensure timely payment delivery, although activist groups like Lib Tech argue that mandatory Aadhaar linkage may inadvertently exclude vulnerable workers from receiving their rightful wages.

Prelims Takeaways

• Aadhaar Based Payment System (ABPS)
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)