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LATEST NEWS UPDATES | An imaginary friend -Sakina Dhorajiwala, Anmol Somanchi, and Rajendran Narayanan

An imaginary friend -Sakina Dhorajiwala, Anmol Somanchi, and Rajendran Narayanan

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published Published on Nov 1, 2018   modified Modified on Nov 1, 2018
-The Indian Express

Claims that Aadhaar has increased the demand and allocations of NREGA work rest on several faulty assumptions.

Two newspaper articles in the Times of India and Financial Express claimed that Aadhaar linking boosts MGNREGA and has cut wage payment delays. Both articles were based on a working paper, “A Friend Indeed”, by members of the Digital Identity Research Initiative (DIRI) at the Indian School of Business (ISB), Hyderabad.

The ISB study uses NREGA and drought data from 2011-2017 and deploys a statistical technique, “Difference in Differences” (DID), to make the causal claims that Aadhaar has made NREGA “counter-cyclical”, that is, the demand and allocation of NREGA work during periods of drought have increased after Aadhaar was introduced. The conclusions, however, rest on incorrect assumptions and ignore important details that affect NREGA.

First, the study conflates the basket of financial interventions introduced in NREGA such as direct benefit transfer, Aadhaar seeding, Aadhaar payment bridge, and JAM as a solitary entity and refers to it as “Aadhaar linked payment (ALP)”. Each of these components have different structures and were rolled out across years. Clubbing them obfuscates a complex reality. Further, the authors believe that prior to what they call “ALP”, NREGA wages were paid in cash. The study states: “Until 2014, a MNREGA worker had to physically visit the designated government office, wait in line, submit his job card to collect the wages in cash from a government official.” This claim is far from the truth. The NREGA payments system has undergone many changes since the programme’s inception. In fact, in the electronic fund management system (e-FMS) that started as early as 2011-12, and subsequently in the National e-FMS, money was credited directly to banks/postal accounts of workers from the state governments’ account.

Second, the working paper ignores the Supreme Court (SC) case between Swaraj Abhiyan and the Union of India, which started in 2015. The SC asked the government to implement the NREGA’s provisions, especially in drought-affected areas, such as providing 50 additional days of work per household, reducing wage delays, and clearing pending wage payments. Taking cognisance of these orders, the Ministry of Rural Development (MoRD) issued strict guidelines to this effect. Further, central and state governments have at various times during 2014-2017 issued directives to enforce orders to allocate additional days of work in drought-hit areas. These judicial-administrative directives, which came in effect after Aadhaar was introduced, perhaps played an important role in the increase in NREGA work uptake.

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The Indian Express, 1 November, 2018, https://indianexpress.com/article/opinion/columns/aadhaar-mgnrega-aadhaar-linking-rural-jobs-5428050/


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