How eRUPI can bridge the gap between state and beneficiaries

The eRUPI initiative launched by Prime Minister Narendra Modi is one of the most revolutionary moves in recent times for myriad reasons. The programme intends to limit the point of contact between the government and beneficiaries and ensures that benefits reach the intended beneficiaries in a targeted and leak-proof manner.

DBT is an initiative aimed at ensuring that money reaches the intended beneficiary and that is precisely what eRUPI seeks to do too, but with a minor difference. In FY21, over Rs 5.52 lakh crore was transferred across 603 crore transactions via the DBT mechanism. In FY22 so far, over Rs 1.28 crore has been transferred across 155 crore transactions in a pathbreaking move. Unlike DBT,eRUPI does not require the beneficiary to have a bank account, which is a major distinguishing feature as compared to other digital payment forms. Hence eRUPI will see a higher adoption rate in rural and remote areas that are currently a hub of small businesses. The eRUPI will also allow MSMEs therefore to send money to beneficiaries including employees and non-employees to ensure the money is used for the required purpose only. For instance, the said money could be for a skill development course or some social welfare measure. Via a cashless and contactless mechanism, eRUPI is set to become a powerful way of increasing the e-relevance for MSMEs and reducing any payment-related frictions.

The DBT scheme implemented via 351 schemes of over 54 ministries transfers central subsidies and other cash transfers to the accounts of beneficiaries under the world’s largest financial inclusion drive. Prior to Modi taking charge as PM, India’s banking penetration was less than 50%, which today stands at almost 100%, thanks to the Pradhan Mantri Jan Dhan Yojana (PMJDY), launched on a war footing. Today, more than 43 crore Jan Dhan accounts have ensured that via DBT, the poor and the underprivileged get access to what is rightfully theirs with respect to government subsidies and benefits without any pilferage. The DBT cash transfers include pensions, fertiliser subsidies, the now discontinued LPG subsidy, Covid-related cash help from the Centre, and a host of other schemes under the Centre and State administrations. The system of sending money directly to beneficiaries through Jan Dhan account, Aadhaar, and mobile (JAM Trinity) made it easier to identify bogus beneficiaries and prevent leakages in government schemes. JAM has saved more than Rs 1.78 lakh crore rupees on average from falling into the hands of middlemen every single year.

DBT, which has in the last seven years, transferred over Rs 17.5 lakh crore to beneficiaries, under the aegis of the Modi government, has been empowering in every sense of the word. Clearly, India’s digitisation is progressing rapidly, creating new benchmarks. For instance, in July 2021, the unified payments interface (UPI) platform processed 324 crore transactions, in terms of volume of transactions and a whopping Rs 6.06 lakh crore in terms of the transaction value. This is a sharp jump since June 2021, when UPI had processed 280 crore transactions worth Rs 5.47 lakh crore. On a daily basis, UPI has been processing between 9 to 11 crore transactions recently.

Launched in 2016, UPI processed 100 crore transactions for the first time, only as recently as October 2019, and has never looked back, since. While lockdowns due to the Covid-19 pandemic impacted digital payments and transactions, UPI has been gaining popularity due to its wide acceptance and ease of use. Other digital payment modes have also been gaining traction. Immediate payments service (IMPS) clocked 34.97 crore transactions amounting to Rs 3.09 lakh crore in July this year. This is the first time that IMPS has breached the Rs 3 lakh crore mark in terms of the transaction value. It had processed 30.37 crore transactions worth Rs 2.84 lakh crore in June 2021. Aadhar enabled payment system (AePS) transactions also rose to 8.88 crore in volume terms and Rs 23,447.11 crore in value terms in July. It had processed 8.75 crore transactions amounting to Rs 24,667.08 crore in June 2021.

As many as 19.23 crore transactions worth Rs 2976.39 crore were processed on NETC FASTag in July 2021, as compared to 15.78 crore transactions totaling Rs 2,576.28 crore in June 2021. Reflecting the rapid adoption and deepening of digital payments across the country in recent years, the “Reserve Bank of India-Digital Payments Index” for March 2021 rose to 270.59, as against 207.84 for March 2020. With digital transformation under the visionary leadership of PM Modi, making life much easier for various stakeholders concerned, it was only a natural progression of things to have an online digital currency. And that is precisely what happened on August 2, 2021, with the launch of India’s very own digital currency called the eRUPI.

The eRUPI initiative launched by Prime Minister Narendra Modi is one of the most game-changing and revolutionary moves in recent times for more reasons than one. The eRUPI program intends to limit the point of contact between the government and beneficiaries and will ensure that benefits reach the intended beneficiaries in a targetted and leak-proof manner. The eRUPI is a non-cash and contactless tool for digital payments. It acts as an electronic voucher, based on a QR code or SMS chain, and is sent to the beneficiary’s mobile phone. Mudra Bank e-RUPI, which has been launched to enable “person and purpose-specific” transfer of money under DBT schemes of the Ministry of Health, to begin with, will essentially help the government or an organisation with amount transfer to the beneficiary’s mobile phone (including feature phones) through a QR code or an SMS for only a particular purpose, for instance, vaccination of employees, instead of his/her bank account. Merchants would be able to accept the code or SMS without any app or card intervention or even internet banking through eRUPI developed by the National Payments Corporation of India (NPCI).

Mudra Bank eRUPI digitally connects service initiators with beneficiaries and service providers without any physical interface. It also ensures that payment is made to the service provider only after the transaction is completed. It is prepaid in nature, which guarantees timely payment to the service provider without the involvement of any intermediary. eRUPI’s single payment mechanism will allow users to redeem coupons at service providers without a card, digital payment application, or access to online banking. The eRUPI platform was developed by the NPCI on its UPI platform in cooperation with the Ministry of Financial Services, the Ministry of Health and Family Welfare, and the National Health Service.

The path-breaking eRUPI is expected to be a revolutionary measure to ensure that welfare services are leak-free. It can also be used to provide services under the Maternal and Child Benefit Plan, the Tuberculosis Eradication Plan, the Support Plan for medicine and nutrition under the Medication and Diagnosis Plan, schemes such as Ayushman Bharat, transfer of fertilizer subsidies, and other welfare-oriented programs. NPCI will launch the eRUPI website soon. It will be the first Indian digital currency and only NPCI will be authorized to control, circulate and design the framework of India’s very own digital online currency the eRUPI.

The use of technology to deliver cooking gas subsidies, ration money, and other social security schemes directly to the bank accounts of beneficiaries is the best example of last-mile delivery. Launching an e-voucher that government and private entities can use to reach specific benefits like vaccination to the needy, the mechanism will further promote a leakage-free targetted delivery system, to make sure that appropriate relief reaches the needy. e-RUPI voucher is another technological advancement that will introduce transparency and ensure that donations by private individuals are used for the intended purposes. About 90 crore citizens in some way or the other are getting benefits like LPG subsidy transfer, pension, PM KISAN Yojana, and scholarship through the DBT platform. For instance, the Modi government has transferred Rs 1.35 lakh crore so far since the launch of PM Kisan Samman Nidhi (PM-KISAN) Yojana, while Rs 85,000 crore was transferred directly to farmers against wheat procurement this year.

India is showing the world today that it is second to none in adopting technology and connecting with it. When it comes to innovations and the use of technology in service delivery, India has the ability to assume global leadership. The eRUPI voucher is going to play a huge role in making digital transactions and DBT more effective. Not only the government, if any general organisation wants to help someone, say, for their treatment, in their education, or for any other need, then they will be able to help the needy via a much simpler and transparent eRUPI, instead of cash. Therefefore, eRUPI, person as well as purpose-specific.

“Earlier in our country some people used to say that technology is only for the rich, India is a poor country, so what is the use of technology for India? When our government used to talk about making technology a mission, many politicians, certain types of experts used to question it,” said PM Modi at the launch of eRUPI. But today, we are looking at technology as a tool to help the poor. For example, via “PM SVANidhi Yojana”, today, in small and big cities of the country, more than 23 lakh street vendors have been helped. Amid the pandemic stricken times, about Rs 2300 crore has been given to them.

The concept of an electronic voucher via eRUPI takes forward the vision of digital transformation and is a solid example of “Minimum government, Maximum governance”, that PM Modi has been a strong votary of. The eRUPI electronic vouchers are essentially like e-gift cards, which are prepaid in nature. The code of the cards can be shared either via SMS or the QR code can be shared. These e-vouchers will be person and purpose-specific. Even if one does not have a bank account or a digital payment app or a smartphone, one can benefit from these vouchers, marking a huge digital revolution in the making. Technology is a tool that bridges the distance between hope and opportunity and that is precisely what eRUPI seeks to do. “We must ensure that technology is accessible, affordable, and adds value”, is a powerful quote by Prime Minister Narendra Modi and sums up the essence of what eRUPI, India’s very own online digital currency entails.

The writer is an economist, national spokesperson of BJP, and the bestselling author of ‘Truth & Dare: The Modi Dynamic’. Views expressed are personal.