Researchers and activists studying the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) data have refuted the argument made in this year’s Economic Survey regarding the positive causal impact of Aadhaar-linked payments (ALP) on the scheme, especially in drought affected districts. The argument is riddled with false assumptions, they say.

On timeliness

The Survey used the rural jobs scheme as a case study to show the benefits of the use of technology in improving targeting and efficiency in welfare schemes, especially for the most vulnerable groups. One of the strongest pieces of evidence cited dealt with timeliness: the percentage of wage payments generated within 15 days improved from 27% in 2014-15 to more than 90% by 2018-19. The Survey credited this to the introduction of ALP in 2015-16.

“That’s just a false assumption,” said Rakshita Swamy, a member of the People’s Action for Employment Guarantee, a network advocating for better implementation and accountability of MGNREGA. She explained that the payment process occurs in two stages, one where the State verifies the work done and the muster roll and generates a fund transfer order, and the other where money is actually credited into the worker’s bank account.

The improvement in timeliness data cited by the Survey deals with stage 1. However, Aadhaar could only play a role in stage 2, Ms. Swamy pointed out.

Another area of contention is the Survey’s comparison of MGNREGS performance in drought affected districts — used as a proxy for distressed areas — and regular districts before and after the introduction of ALP. In supply and demand for work as well as in worker attendance, the scheme’s performance in drought areas improved at a much faster rate after ALP in comparison to other areas.

Erroneous conflation

“For this kind of statistical comparison to be valid, there must be a single intervention whose impact can be measured before and after it occurred. But in this case, very different interventions are being conflated,” said Rajendran Narayanan, Assistant Professor, Azim Premji University, who has been studying the treasure trove of MGNREGS data from the last decade.

He noted that around the same time that Aadhaar was introduced to MGNREGS, a Supreme Court ruling mandated special measures for the scheme in drought affected areas, such as providing 50 additional days of work per household, reducing wage delays, and clearing pending wage payments. Central and State governments issued orders to comply with the ruling, leading to interventions which also impacted the situation at the same time as Aadhaar.

Unproven assumption

“Another critical assumption is that MGNREGA outcomes in drought and non-drought districts were parallel before and after the introduction of Aadhaar. But that has not been proven,” said Sakina Dhorajiwala, a researcher with the LibTech group, who is also working closely on the MGNREGS dataset with Prof. Narayan. She added that the Survey has cherry-picked data by choosing to use trends from only one year before the introduction of Aadhaar, and from household-level instead of individual level outcomes. Widening the dataset showed different outcomes, she said.