Around 27 percent of all MGNREGA workers and 1.5 percent of active workers are still ineligible for the Aadhaar-based payment system (ABPS), a new report said, as it also dismissed the government’s claim that it is more efficient than the bank account-based payment system.
In a report released earlier this week, Libtech India, a consortium of academics and activists, also recommended that MGNREGA funds be urgently restored in West Bengal, which the Union government has stalled for more than three years.
ABPS, a mechanism to electronically transfer wages and subsidies to an Aadhaar-linked bank account that is mapped with the National Payments Corporation of India(NPCI) mapper, was made mandatory under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in January 2024.
The BJP-led government at the Centre and the TMC government in West Bengal have repeatedly tussled over the issue.
The central government has said ABPS was introduced to ensure timely payment of wages to the beneficiaries under MGNREGA and has claimed that there were irregularities in utilisation of funds released before March 2022.
In a written reply in Lok Sabha during the recent Budget Session, Minister of State for Rural Development Kamlesh Paswan said ABPS addresses the issues arising due to frequent changes in bank account numbers of the beneficiaries.
The Rural Development Ministry has said release of funds under MGNREGA has been stopped since March 9, 2022 as per provision of Section 27 of MNREGA law "due to non-compliance of directives of central government".
The report by Libtech India said on April 8, 2024, around 31 per cent of all workers and 8 per cent of active workers were ineligible for ABPS. The situation improved only marginally in 2025, and as of April 7, 2025, 27.5 per cent among all workers and 1.5 per cent among active workers are still ineligible for ABPS.
The report said though the Rural Development Ministry has stated that ABPS ineligibility will not lead to loss of work, field insights from 200 cases across 10 states inform that workers ineligible for ABPS are not provided work by frontline officials, fearing non-payment of wages which denied them their "right to work".
At state level, while Maharashtra followed by Gujarat and Jharkhand have the highest number of all workers ineligible for ABPS, West Bengal, Bihar and Punjab have the highest 'active' workers being ineligible, the report said.
According to the Rural Development Ministry website, 15.21 crore job cards have been issued under MGNREGA so far, and there are 26.21 crore workers in total. The number of 'active' job cards is 8.3 crore while the number of 'active' workers is 11.83 crores.
The report also expressed concern over the budget for the scheme, and said various studies in the past have established budget cuts and wage payment delays to play a significant role in the overall employment drop.
It also said the People’s Action for Employment Guarantee (PAEG) has recommended a budget allocation of 2.64 lakh crores for MGNREGA for 2022-23, however, the Union government allocated only Rs 86,000 crores for 2024-25.
The report said despite an 8.6 per cent rise in registered households under MGNREGA in 2024–25, employment indicators point to a concerning decline, and said the person-days generated dropped by 7.1 per cent, average days of employment per household fell by 4.3 per cent, and only 7 per cent of households completed the full 100 days.
It also pointed out that there was no employment generated for West Bengal in 2023-24 and 2024-25, since funds for the state have been stalled by the Union government since March 2022 with the invocation of Section 27 of MGNREGS 2005.
The report also said that the trend of high deletions of MGNREGA workers was reversed in 2024-25 for the first time after 2022-23, and more job cards and workers were added than deleted.
The Centre has said that MGNREGA funds have not been released to the West Bengal as per provisions of Section 27 of Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and has alleged irregularities in the implementation of the scheme.
The Rural Development Ministry has also alleged non-compliance of directives of the central government.
Under the Section 27 of the Act, the central government can "order stoppage of release of funds to the Scheme" on receiving a complaint of improper utilisation of funds.
The Calcutta High Court, while hearing petitions demanding that beneficiaries be paid for work already completed under the scheme, observed last month that the Act does not allow for indefinite suspension of the scheme’s implementation due to complaints.
