New Delhi (Agency): The Indian Government is making strides in digitizing wage payments under various schemes, such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The progress of the Aadhaar-based Payment System (ABPS) was recently reviewed, and its usage has been extended until December 31, 2023.
The Ministry has clarified that while beneficiaries are encouraged to provide their Aadhaar numbers, they will not be denied work if they cannot provide it. This clarification comes after several wage payment transactions were rejected due to issues like outdated account numbers.
In consultation with different stakeholders, ABPS was identified as the most efficient route for wage payment through Direct Benefit Transfer (DBT). It simplifies the process, ensuring that wages reach beneficiaries on time. Once an Aadhaar number is updated in the scheme’s database, there is no need for beneficiaries to update their bank account numbers when they change locations. Money is automatically transferred to the account linked to their Aadhaar number.
Data from the National Payments Corporation of India (NPCI) shows that ABPS has a higher success rate of 99.55% for DBT, compared to 98% for account-based payments. This indicates that ABPS is more reliable and efficient.
Mahatma Gandhi NREGA, which has been using APBS since 2017, highlights the success of this payment route. As of July 2023, 88.51% of wage payments were made using ABPS. Of the 14.33 crore active beneficiaries, 13.97 crore have had their Aadhaar numbers added to the system. Of these, 13.34 crore Aadhaar numbers have been verified, making 81.89% of active workers eligible for ABPS.
One significant advantage of ABPS is its role in curbing corruption. By linking payments to Aadhaar, the system weeds out fake beneficiaries. This contributes to transparency and ensures that genuine beneficiaries receive their due payment.
ABPS is not just a payment route but a well-defined system where the roles of beneficiaries, field workers, and other stakeholders are clearly outlined. Given the numerous economic factors affecting demand-driven schemes like Mahatma Gandhi NREGA, the well-placed ecosystem for ABPS makes it the best payment system for beneficiaries.
The extension of ABPS aims to streamline the process of wage payments, thus adding another layer of efficiency and security to the financial transactions of millions of workers across India. This is a significant step toward the government’s larger goal of financial inclusion and digital empowerment.
