On January 30, 2023, the Ministry of Rural Development (MoRD) told state governments that “all payments to the Mahatma Gandhi NREGS beneficiaries would be mandatorily made through Aadhaar Based Payment System (ABPS) only” from February 1, 2023 – two days later.
As recklessness goes, this is on par with a national lockdown at four hours’ notice.
To understand this, we need to remember the basics of NREGA wage payments. Until now, the NREGA payment system allowed two modes of wage payment: “account-based” and “Aadhaar-based”. The former is an ordinary bank transfer, based on the worker’s name, bank name and account number. The latter refers to the ABPS, which treats Aadhaar as a financial address.
For the ABPS option to work, not only must the worker’s Job Card and bank account be seeded with Aadhaar, the account must also be connected to the National Payments Corporation of India (NPCI) mapper, a process known as “mapping”. If a worker has several bank accounts, as often happens, the ABPS sends wages to her latest-mapped bank account. If this sounds a little complicated, think of how it sounds to an average NREGA worker.
Seeding and mapping a bank account can be very cumbersome. It involves stringent KYC requirements, biometric or demographic authentication, and resolving possible inconsistencies between the Aadhaar database and the bank account. Inconsistencies between any of those two and the Job Card can also create problems for Aadhaar-based payments of NREGA wages.
This helps to explain why, after many years of relentless push for maximum use of the ABPS option by the Union government, a majority of NREGA workers are still not “eligible for ABPS”. According to the MoRD’s own MIS Report 1.1.9, only 43% of NREGA workers are eligible for ABPS today. In Gujarat, less than 20% are eligible.
By making ABPS payments compulsory, the MoRD’s recent order threatens to create a situation where a majority of NREGA workers cannot be paid.
It is not clear what the ministry proposes to do about wages due to NREGA workers who are not eligible for ABPS. Are their wages going to be held up, illegally, until they are eligible? Are they going to be prevented from working in the first place? The January 30 order is silent on this.
This is just another instance of the “ultimatum method” being used to force Aadhaar systems on the population: a deadline is set, and people who don’t comply are deprived of benefits after that.
This ultimatum method has caused havoc across welfare schemes. A telling example is the manner in which old-age pensions have been discontinued from time to time in various states to force the recipients to comply with the requirements of Aadhaar-based payments.
Why is the ABPS being imposed in the first place?
There is no evidence that it works better than the account-based system for NREGA wage payments. In fact, according to recent work by Lib Tech India, the speed of payment is much the same for account-based and Aadhaar-based payments. And while rejection rates are similar, rejection problems are much harder to resolve for Aadhaar-based payments.
Sometimes they take months to resolve, even with special assistance – I have some experience of this myself. In more than a few cases, ABPS rejection problems are as good as impossible to resolve. Further, the ABPS has created a new generation of payment glitches, like the diversion of wages to bank accounts (or even Airtel wallets) that people know nothing about.
An impression has been created that Aadhaar-based payments help to prevent corruption. This assumption is questionable in my view.
The fact of the matter is that Aadhaar-based payments have made some forms of corruption harder and others easier (the “scholarship scam” in Jharkhand is a useful reminder of their vulnerabilities).
But in any case, corruption concerns are not a licence to trample on workers’ rights. If an NREGA worker has worked, they must be paid within 15 days as per the law – full stop.
(Jean Drèze is a freelance development economist and presently visiting Professor at the Department of Economics, Ranchi University. Courtesy: The Wire.)
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MoRD ‘Unable or Unwilling to See Ground Realities’ on NREGA
NREGA Sangharsh Morcha
[While the ministry has claimed that there is no funding shortage or wage delay, the NREGA Sangharsh Morcha has said these claims do not match reality.
The NREGA Sangharsh Morcha, a national collective of trade unions, workers platforms and organisations, has written an open letter to the Ministry of Rural Development, refuting the ministry’s recent claims on the status of the Mahatma Gandhi National Rural Employment Guarantee Scheme. The MoRD had made in these claims in response to queries sent by IndiaSpend on the reduced budget for the scheme and its implications. The full text of the letter is as below.]
Full Text of Open letter of NREGA Sangharsh Morcha to the Ministry of Rural Development
Dear Sir/Madam,
NREGA Sangharsh Morcha is a coalition of organisations working with rural labourers, including NREGA workers, around the country. On 8 February 2023, the Ministry of Rural Development released a detailed statement on NREGA in response to queries from Indiaspend. From this statement, it appears that the Ministry is in denial of the ground realities of NREGA. The following claims are particularly misleading:
1. There is no unmet demand for NREGA work. (“During current FY 2022-23, a total of 99.81% rural households have been offered wage employment against their demand for work.”)
2. This year’s Budget allocation of Rs 60,000 crore for NREGA is adequate since supplementary funds are usually provided later in the year to meet the demand for work.
3. Wages are paid on time. (“As on 7.2.2023 payments generated within 15 days is 95.97%.”)
4. The NMMS digital-attendance App is working smoothly, “technical issues are being resolved on real time basis” and “no major issue has been reported in its implementation”.
We respond to this point by point:
1. What passes for “work demand” in NREGA’s Management and Information System (MIS) can by no means be interpreted as an indicator of the full demand for work. It is only a record of formal requests that may or may not have been submitted by workers themselves. More often, these digital requests are just a formality fulfilled by the implementing agency or middlemen. Independent surveys show that the real demand for work is much larger (see e.g. Azim Premji University 2022). Many households would like more NREGA work but they don’t know how to apply, and may not even be aware that they have a right to apply. In practice, employment generation depends more on the initiative of state governments and local authorities than on formal work applications. These initiatives are frustrated when funds are lacking.
2. The Ministry is deceiving the public by claiming that the Budget allocation is adequate and will be supplemented in good time to meet the demand for work. It knows very well that the supplementary allocation proves inadequate every year and leads to wage arrears being carried over to the next financial year (more than Rs 10,000 crore this year). Meanwhile wage payments are delayed and NREGA works are often held up. If only to break this vicious circle of under-allocation and mounting arrears (let alone expand employment), it was important to make a much higher Budget allocation this year.
3. The claim that wages are paid on time is poetry. The Ministry is careful to mention that payments are only “generated” within 15 days in most cases, but it knows very well that wage payments are routinely delayed after the generation of payment orders. Many recent studies show that payment delays remain the norm rather than exception. For instance, a careful analysis of 18 lakh wage transactions in the first half of 2021 revealed that the Centre delayed payment of 44% of the wages beyond 15 days (see also APU2022). It gets worse in the second half of each year, when funds run out.
4. We strongly dispute the claim that the NMMS digital-attendance App works smoothly. Wherever we have a presence (Bihar, Chhattisgarh, Jharkhand, Karnataka, Rajasthan, Uttar Pradesh, West Bengal and other states), we observe that the mandatory imposition of this App has caused havoc. In many areas, there have been demonstrations of NREGA workers against it. We have also circulated many testimonies of NMMS-related problems on social media. The claim that “no major issue has been reported in its implementation” is simply false and contradicts the Ministry’s own admission that damage-control modifications have been made in response to requests from state governments. Many NREGA workers today work without being paid because of technical problems related to the NMMS App – this is a gross violation of their inalienable right to payment within 15 days. We are aware that a provision has very recently been introduced for offline uploading of NMMS attendance and photographs. In our experience, this facility is still not operational in many areas, when it is known at all to worksite supervisors. But in any case, this is just another instance where the imposition of an immature and unreliable wage payment system leads to a long phase of damage-control after so-called “teething problems” emerge, only to be followed by another problematic innovation. This constant rejigging of payment systems must stop. It is the Ministry’s responsibility to put in place a reliable and timely payment system once and for all.The Ministry’s statement suggests that the Ministry is unable or unwilling to see the ground realities. We invite senior officials of the Ministry to visit some of the areas where we work and see the situation for themselves without a priori. Meanwhile, we have launched an indefinite protest at Jantar Mantar from today, to demand the withdrawal of the NMMS App and a lasting solution to the persistent problem of delayed and unreliable NREGA wage payments. Attached is the charter of demands from NREGA Sangharsh Morcha.
Yours sincerely,
(Letter courtesy: The Wire.)
