Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) is a demand-driven employment programme providing 100 days of unskilled employment per year. Aadhaar refers to the 12-digit Unique Identity Number (UIN) provided by the government as a proof of identity to the Indian residents. Recently, the government has invoked Section 7 of the Aadhaar Act, 2016 to make Aadhaar number mandatory for payments and wage disbursements under MNREGA. Aadhar has made NREGA payment through banks easier for wage labours.

Criticism of this move:

• Making Aadhaar number mandatory violates an order by the Supreme Court. SC had ruled that the use of Aadhaar to avail government subsidies and benefits should be optional and should take place only when the individuals consent to it.
• The matter concerning Right to Privacy is subjudice and there are concerns that the government can use personal information provided in Aadhaar for purposes such as surveillance etc., jeopardizing privacy.
• Aadhaar seeding of bank accounts is not complete yet. This may result in exclusion.
• There are concerns regarding the biometric data falling prey to cyber-security attacks, as witnessed in Maharashtra recently. SC has recently expressed concern regarding the integrity and safety of the biometric data collected by private agencies on behalf of UIDAI.

Benefits of NREGA payments through banks using AADHAR (DBT):

• Ghost MNREGS beneficiaries will be eliminated and the intended beneficiaries will get their due.
• Timely payments. At present, only 55% of the MNREGS workers get their remuneration on time.
• Leakages will be prevented as the remuneration directly gets credited to the worker’s account without the involvement of ground-level middlemen. 
• Reduced paperwork and compliance will also cut down the government’s operating costs and lead to savings for the exchequer.
• This will lead to a transition towards a less-cash, financially inclusive society.

Direct Benefits Transfer (DBT) via JAM trinity (Jan Dhan, Aadhaar, Mobile) is one of the key projects of the government. If the privacy concerns are addressed adequately, the inclusion of MNREGS in DBT will be a game-changer. It will lead to increased transparency in the functioning of the MNREGA, which has been historically criticized for leakages and delayed payments.