Summary

MGNREGA, India’s flagship rural workfare program, is one of the preeminent public entitlements to be linked to Aadhaar. The linking of Aadhaar to the MGNREGA wage payment process alters the existing path of payments to from State to the beneficiary. Aadhaar-linked wage payments under MGNREGA are routed through the Aadhaar Payments Bridge (APB) system, and into the beneficiary’s Aadhaar-seeded account. This Aadhaar-seeded account may or may not be the same as the beneficiary’s erstwhile MGNREGA-linked account.  Accidental mismatch between these two accounts holds the ability to vastly diminish the beneficiary experience and impact further uptake of work under the scheme. This study aims to identify and describe patterns of misdirected payments in the state of Jharkhand from April 2014 to March 2018.

We utilize wage payment transaction data to compare the beneficiary’s preferred bank account with the Aadhaar-linked account as a measure of misdirection.

We find that the volume of APB transactions rise steadily in our four year period of analysis to achieve considerable penetration of Aadhaar-seeding. Further, there is evidence of beneficiaries switching back and forth on the APB platform. The mis-direction of funds is observed to affect 68% of all APB transactions in the state of Jharkhand. Of these transactions, 38% redirect wages to a completely unrelated account (the remainder being redirected to other beneficiaries in the same household). We further analyse temporal and geographic patterns in the occurrence of mismatch.