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Source: This post is created based on the article “The Rural Wage Rule GOI Must Relinquish”, published in Times of India on 30th May 2023.
Syllabus Topic: GS Paper 2, Social Issues, mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections
News: The rural development ministry issued an order making Aadhaar-based payments compulsory for all NREGA wages from feb 2023. This is creating huge problems.
Before this order there were 2 wage payment options: “account-based” and “Aadhaar-based”.
The Aadhaar-Based Payment System (ABPS) is supposed to find the latest Aadhaar-linked accounts.
What are the issues associated with ABPS?
ABPS has no demonstrated advantage over account-based payments. It often leads to problems like wages being redirected to Airtel wallets unknowingly, and rejection problems are harder to solve with ABPS.
Only 43% of all NREGA workers were eligible for ABPS wage payments when the order was issued. It led to a situation where a majority of workers were “unpayable”.
In many cases, job cards of ABPS-ineligible workers are being deleted to meet the target of 100% ABPS eligibility.
Frontline NREGA functionaries are struggling to implement the new order. They are avoiding assigning ABPS-ineligible workers work at NREGA worksites.
An impression that ABPS payments are relatively corruption-proof exists, but there is no evidence of this. Aadhaar-linked accounts are especially vulnerable to fraud. In fact, it is one of the top fraud types listed by the National Payment Corporation of India in its updated ‘Fraud Liability Guidelines’ for Aadhaar-enabled payments.
What should be course of action?
Making Aadhaar-based payments compulsory is counterproductive. What is needed is a retraction of the January 30 order and a review of the Aadhaar-based payment option to ensure a reliable and timely payment system for NREGA workers.
