Key Facts

•  Payment delays have been widely reported as a consistent challenge in the implementation of MGNREGA.
•  Aadhaar-linkage with wage payments under MGNREGA has been underway across the country since 2013.
• Aadhaar-linkage in MGNREGA alters the path of payment processing for wage transactions through the Aadhaar Payments Bridge              System. The mechanism of Aadhaar-linkage in this scheme does not utilize beneficiary biometrics.
• Between April 2017 and March 2018, approximately 10 million wage payment transactions were made to beneficiaries in Jharkhand. Of these, 33.6% of were made via the Aadhaar Payments Bridge system.

Summary

MGNREGA, India’s flagship rural workfare program, is one of the preeminent public entitlements to be linked to Aadhaar. The Scheme is intended to provide timely relief in the form of livelihood to rural poor. As such, timely and accurate wage payments are crucial to the effective implementation of the Act.

The linking of Aadhaar to the MGNREGA wage payment process alters the payment process by routing payments to worker beneficiaries through the Aadhaar Payments Bridge (APB) system, and into the beneficiary’s Aadhaar-seeded account. In contrast, beneficiaries without Aadhaar-linkage continue to receive wages in their MGNREGA linked account, which may or may not be Aadhaar-seeded. This study analyses patterns of payment duration and rejections for Aadhaar-linked and non-Aadhaar wage transactions in Lohardaga district, Jharkhand from April 2017 to March 2018.

We utilize wage payment transaction data from MGNREGA Fund Transfer Orders and Muster Rolls to compare payment durations and rejections across Aadhaar-linked and non-Aadhaar transactions. We examine the payment duration in 2 parts – the first comprising steps executed within the Gram Panchayat, and the second comprising those executed at the Centre (Ministry of Rural Development), PFMS, NPCI and APBS.

We find that at the district level, 39.8% of Aadhaar-linked transactions and 40.6% of non-Aadhaar transactions are delayed. We find that on average, the duration beyond the GP (which involves APBS) is longer than the duration within the GP in all but 5 of the 66 Panchayats in the district. This finding is consistent across Aadhaar-linked and non-Aadhaar transactions. Finally, we find that at the district level that the proportion of Aadhaar-linked transactions that were rejected (2.64%) is nearly identical to that of all non-Aadhaar transactions (2.65%).