The Next Frontier On Welfare Delivery: How E-RUPI Can Revolutionise Government Subsidies Through Vouchers

Through the trinity of Jan Dhan Accounts, Aadhaar, and Mobile Connections (JAM), the Narendra Modi-led NDA government has transformed government-sponsored social welfare, plugging the leaks and eliminating the unnecessary middlemen and systems that not only plagued the system but were also the root of corruption in many places.

On 2 August 2021, the government is set to announce its next big leap in the realm of DBTs- the e-RUPI.

Until now, under the DBTs, the achievement for this government was to ensure that the right beneficiaries received the welfare, without leakages. For instance, during the three months of April, May, and June, more than 200 million Jan Dhan Accounts, held by women, were credited with Rs. 500 each month under the Covid relief package while allowing them the freedom to use the money as they saw fit.

With e-RUPI, the government can not only target the beneficiaries, but also the purpose for which the transfer is being made.

The e-RUPI has been developed by the National Payments Corporation of India (NPCI) over its UPI Platform, in collaboration with the Department of Financial Services, Ministry of Health and Family Welfare, and the National Health Authority.

The e-RUPI has been envisioned as a cashless and contactless online payment system that will use a QR code or an SMS string-based e-voucher that will be delivered to the beneficiaries. The beneficiaries will be able to use this voucher without any card, internet banking access, or internet-enabled mobile app when they wish to access the services at the designated provider for those services.

Unlike the cash transfers made to the female beneficiaries during the first three months of the Covid-19 lockdown in 2020, these e-vouchers will only be valid for the services they are designated for by the government which could include healthcare, education, and an array of services in the future.

The payment for the service providers is ensured after the completion of the service, and given the e-vouchers are prepaid, the service provider does not have to wait for long for their payment.

On 13 July, the NPCI had issued the guidelines for the UPI platform, stating that e-vouchers can be issued to mobile phone holders without any app or bank account. These vouchers would be useful for one-time payments and would have an OTP authentication mechanism.

For the banks as well, these e-vouchers will aid the reduction in overhead costs, given a prepaid card with a chip costs the bank as much as Rs. 200. This also includes the cost incurred by the bank to transfer the card to the beneficiary amongst other operational expenses.

The NPCI has also stated that banks can issue these prepaid vouchers on behalf of the corporates, state governments, central government, or any business customers of any banks.

The e-vouchers would have to be issued in bulk, and can be sent to anyone with a mobile phone, thus not making it mandatory for the intended beneficiaries to have an account in that or any bank, or have a UPI ID linked to the mobile number. Therefore, in near future, the corporates can use this payment facility for their CSR and other charitable purposes.

When it comes to the use-cases of e-RUPI, sky's the limit, for it can be extended to any beneficiary to spend on any of the designated services. For instance, to farmers for fertilisers and seeds before the farming season, or to students in universities to purchase books and other university resources, or to employees to spend on designated services, say leisure, or restaurants, or medical checkups, or travel, and so forth.

However, for the government, the golden opportunity for a test-run lies in the ongoing Covid-19 vaccination programme. Already made free outside the private hospitals, the centre must experiment by issuing e-RUPI to beneficiaries in some states, or some districts of all states, to gauge the potential in the idea and plug any loopholes, if at all.

Earlier this year, the concept of e-vouchers was already discussed for implementation under the National Digital Health Mission (NDHM). However, the healthcare sector is only a small teaser to what the government and other private corporations can achieve with this innovative solution.

The e-RUPI is a person- and purpose-specific digital payment mechanism, intended to help people across different economic spectrums with easier access to better services.

While the Western democracies may take pride in issuing stimulus cheques that take the postal route before reaching the intended beneficiaries, in India, lives of 1.3 billion people are already being bettered with such digital solutions.

Minimum government, maximum governance indeed.