wordpress blog stats
Connect with us

Hi, what are you looking for?

Digital Potholes Lead To Exclusion In MNREGA payments

Aadhaar, PAN Card

Rejected payments continue to hamper the Mahatma Gandhi National Rural Employment Guarantee (MNREGA) program due to authentication failures or bank/payment system problems, a report by LibTech India said. In the last five years, at least 5,000 crore payments to MNREGA beneficiaries were rejected due to fundamental issues in how the government has implemented digital payments and Aadhaar authentication for the scheme, it said.

The survey covering 1947 respondents across four blocks in three states, Andhra Pradesh, Rajasthan and Jharkhand, found that issues with Aadhaar seeding has lead to the exclusion of many MNREGA from accessing their wage . The report found that 30% of all the surveyed people experienced at least 3 biometric failures in the last 5 transactions they made to withdraw their MNREGA wages whether through banks, ATMs, Banking Correspondents (BCs) or Customer Service Points (CSPs).

“Each state government should set up a system to monitor rejected payments regularly and ensure that they provide prompt support to resolve grievances. They should include members from the UIDAI, National Payments Corporation of India (NPCI) and banks so that workers do not suffer due to the lack of coordination among these agencies,” the report says.

It found that payments were rejected either due to three broad reasons:

  • local administration data entry errors such as incorrect Aadhaar and bank account linking
  • Bank issues like dormant accounts, joint accounts, closed accounts
  • Aadhaar issues could include delinking of Aadhaar , mismatch of names, non compliance of Know-Your-Customer norms,

Findings of the survey

Transparency

  • 11% of workers receive SMS services informed about their wages being credited
  • 36% have to visit a bank just to find out if their wages have been credited

Biometric Failures

  • 40% of CSP/BC users faced biometric authentication failure at least once in the previous 5 transactions
  • 7% reported a biometric authentication failure for each of their last 5 transactions

Rejected Payments

  • 18% of bank users were denied wages and told to visit a CSP/BC
  • 45% of bank users have to make multiple visits, while 40% of CSP/BC users need to make multiple visits due to transaction failures.
  • 50% of ATM users said they had to visit the ATM again due to a failed transaction
  • Out of the 249 (out of 1947 respondents) who said they had rejected payments, the majority of them from Rajasthan and Jharkhand;  while Andhra Pradesh had negligible number of rejected payments
  • 63% of the Jharkhand respondents were not aware that their payment got rejected, compared to 25% in Rajasthan
  • 77% were unaware of why their payments were rejected

Problems in the transition to digital payments

Since its inception in 2006, NREGA wages were paid at the Gram Panchayat level in cash. However, to improve transparency and reduce corruption the government/states began a drive to open bank accounts for beneficiaries beginning in 2008. By 2012, the Ministry of Rural Development (MoRD) had begun transferring funds to workers directly into their bank accounts.

The digitisation of welfare benefits was taken further by the Bharatiya Janata Party led governments’ financial inclusion policies, particularly by the Pradhan Mantri Jan Dhan Aadhaar Yojana. Ultimately, through this program, the government was able to link Aadhaar identities with mobile numbers and bank accounts to identify new-to-banking customers and beneficiaries of welfare programs. While JAM (Jan Dhan – Aadhaar – Mobile) is one part of the government’s overall financial inclusion policy. Today, the requirement to use Aadhaar is prevalent across all Direct Benefit Transfer (DBT) programs, as well as administrative services.

Advertisement. Scroll to continue reading.

By 2016, the government had laid a digital pipeline to deliver all welfare benefits, including MNREGA wages. It would centralise all DBT payments through the Aadhaar enabled Payments System (AEPS)/Aadhaar Payments Bridge System (APBS), which is operated by the National Payments Corporation of India. In the case of MNREGA workers, Aadhaar was seeded to their job cards and banks, which allowed payments to flow to their account via the APBS. They could use the same system at banks, bank kiosks or CSPs/BCs to withdraw cash if they required. The AEPS essentially allows one to conduct banking transactions by authenticating their biometric information that is seeded to the banks.

However, in the report, noted economist and Visiting Professor at Ranchi University Jene Dreze says that this transition to the digital ecosystem was not smooth and “a new generation of payment problems emerged”.

“Each time the payment system was re-jigged, workers had to run from pillar to post to adjust to the new modalities (for instance, by opening a new account, or linking it with Aadhaar) and face another round of hurdles. Ten years after bank payments were introduced, the central government is still unequal to the task of ensuring reliable wage payments within 15 days,” Jene Dreze

Also read: 

 

Written By

Reports on banking, payments, fintech and crypto-curencies. Additional reporting on media regulations, data protection and other areas.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.

News

When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

You May Also Like

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ