Central government to move to only Aadhar-based payment for MGNREGA wages from 1st July 2023. Know more about this development about the important MGNREGA scheme from the IAS exam perspective in this article. You can also read about the MGNREGA scheme in detail in the link.
MGNREGA Scheme Payment System
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) implements a wage payment system that combines different models.
- Wage settlement followed two methods:
- National Automated Clearing House (NACH) based electronic payment:
- NACH was set up by the National Payments Corporation of India (NPCI).
- NACH is an electronic platform for clearing funds that enables interbank transactions to occur on a recurring basis.
- Under this system, the bank account of the person is used for transferring funds to the beneficiary account.
- Aadhaar-Based Payment System (ABPS):
- Introduction:
- This system was first introduced in 2017.
- This system utilises the Aadhaar number of the recipient to identify them for the purpose of transferring funds.
- Benefits:
- This system promotes transparency in wage payments and helps to prevent any unauthorised access.
- It prevents any disruptions in workers’ wage payments caused by issues with their bank accounts.
- Present usage:
- As per the government data, 84% of the transfers in March ’23 were based on ABPS.
- Introduction:
- National Automated Clearing House (NACH) based electronic payment:
- If the beneficiary was previously associated with the ABPS, payment would exclusively occur via this system. However, for those who have not yet linked to the ABPS due to technical difficulties or other reasons, the NACH system will continue to be available until June 30.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005:
- The primary objective is to provide a legal assurance of paid employment to adult individuals in rural households who are ready to engage in unskilled manual labour, limited to a maximum of 100 days per household. The creation of assets for rural development is the secondary objective.
- MGNREGA registration is open to every rural household in the district, making it applicable to all villages.
- It also ensures equal payment for men and women, wages to be paid within a fortnight, and 1/3 of beneficiaries should be women.
Proposed Change to the Payment System
Image source: Economic Times
- Starting from July 1st, 2023, the Aadhaar-Based Payment System (ABPS) will become mandatory for settling wages under the MGNREGS, as the central government has made a decision to discontinue the old system.
- The Ministry of Rural Development has informed the states that the existing hybrid payment system for wages will be terminated by June 30, and no further extension of the due date will be allowed.
- Extension of deadline:
- The deadline for the implementation of ABPS was extended multiple times for a smooth transition into the new system.
- But it also resulted in a situation where people started thinking that the deadline will be further extended. But the government has made it very clear that no further extension will be provided and all are expected to move to the new system by June 30th 2023.
- 95.4% of the 142.5 million active workers under the MGNREGS are Aadhar-seeded.
- NREGASoft is an electronic system that documents all the operations associated with this program, creating an e-governance framework.
Concerns raised:
- Many were raising the concern that during technical glitches, payments might not be getting paid.
- Many workers have still not seeded their details and hence have not migrated to the ABPS.
MGNREGA Payment System:- Download PDF Here
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