Health & SocialImportant2025-11-01

Mandatory e-KYC Triggers Massive MGNREGS Job Card Deletions

Why focus: GS2 Schemes. Clusters with VB-GRM. Sets up ABPS and e-KYC mandates for 'How-Many-Correct' exclusion traps.

In News

What Happened

On November 1, 2025, the mandatory enforcement of e-KYC and the Aadhaar-Based Payment System (ABPS) for all active MGNREGS workers came into full effect. This strict enforcement resulted in the immediate deletion of approximately 27 lakh job cards by mid-November. The government stated the move was to weed out fake beneficiaries, while civil society groups highlighted widespread digital exclusion of genuine rural workers.

Why It Matters

This event highlights the tension between improving state capacity to plug leakages in social safety nets and the unintended exclusion of vulnerable populations due to digital barriers. It raises crucial debates about the effectiveness and equity of technology-driven Direct Benefit Transfers (DBT) in rural India.

Background

History & Context

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was enacted in 2005 to provide 100 days of guaranteed wage employment to rural households. Over the years, the government shifted towards Direct Benefit Transfers (DBT) to reduce corruption and wage delays, eventually introducing the Aadhaar-Based Payment System (ABPS). Despite multiple deadline extensions since early 2023 to link Aadhaar with job cards and bank accounts, structural challenges like biometric mismatches, name discrepancies, and poor internet connectivity persisted in rural areas.

What Changed

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BEFORE: Workers could receive MGNREGS wages through a mixed system of ABPS and traditional account-based transfers, with extensions frequently granted for incomplete Aadhaar linking. NOW: Wage payments are strictly routed through the ABPS, requiring mandatory e-KYC completion without exceptions.
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BEFORE: Job cards remained active as long as the worker demanded work, with local panchayats handling manual verification in some regions. NOW: Approximately 27 lakh job cards were systematically deleted due to e-KYC non-compliance, removing these workers from the active roster.
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BEFORE: The focus of DBT was primarily on expanding financial inclusion and linking basic bank accounts. NOW: The administrative focus has shifted to rigorous deduplication through biometric and e-KYC mandates, prioritizing leakage reduction over universal accessibility.

Prelims Angle

NCERT Connection

This event directly connects to Class 11 Indian Economic Development, Chapter 4 - Poverty, which discusses poverty alleviation programmes like MGNREGA. It illustrates the practical challenges of implementing such schemes, specifically how technological interventions intended to improve delivery can paradoxically create digital exclusion and deny benefits to genuine beneficiaries.

Practice Questions

Q1

Correct Statement(s)

Which of the following statements regarding the Aadhaar-Based Payment System (ABPS) in MGNREGS is/are correct? 1. ABPS requires a worker's Aadhaar number to be linked with both their MGNREGS job card and their bank account. 2. The primary objective of mandatory e-KYC in MGNREGS is to increase the guaranteed wage employment from 100 to 150 days for all rural households.

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