- GS-3: Awareness in the fields of IT
- GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
E-RUPI & Governance
In news: Recently launched by the PM Modi, e-RUPI is a digital prepaid, purpose- and person-specific payment utility.
How will e-RUPI work?
- e-RUPI is basically a digital voucher which a beneficiary gets on his phone in the form of an SMS or QR code.
- It is a pre-paid voucher, which he/she can go and redeem it at any centre that accepts its.
- For example, if the Government wants to cover a particular treatment of an employee in a specified hospital, it can issue an e-RUPI voucher for the determined amount through a partner bank. The employee will receive an SMS or a QR Code on his feature phone / smart phone. He/she can go to the specified hospital, avail of the services and pay through the e-RUPI voucher received on his phone.
- e-RUPI will connect the sponsors of the services (govt) with the beneficiaries (BPL Card holder) and service providers (hospitals) in a digital manner without any physical interface.
- Thus e-RUPI is a one-time contactless, cashless voucher-based mode of payment that helps users redeem the voucher without a card, digital payments app, or internet banking access.
- The system has been built by National Payments Corporation of India on its UPI platform, and has onboarded banks that will be the issuing entities.
e-RUPI’s Application in Vaccination
- Its immediate and first-use case can be to facilitate cashless service at paid Covid vaccination centres (CVCs).
- For instance, corporates and philanthropies can buy services in bulk to vaccinate employees and those in need.
- The intended beneficiaries will receive an SMS or QR code on their feature/smartphone, redeemable for cashless vaccination at participating centres.
e-RUPI’s Application in PDS
- The inefficiency of the programme is rooted in high overhead costs, leakages, exclusion and inefficiencies.
- A food-specific e-RUPI voucher will allow beneficiaries to buy rations from an outlet of their choice.
- e-RUPI could make the PDS programme more efficient.
- One Nation, One Ration Card has the potential to make the redemption of the voucher at market price by merchants within and outside the PDS network.
e-RUPI’s Application in Fertilizer Subsidy
- e-RUPI will enable farmers to buy fertiliser at nominal prices with direct credit of the subsidy amount into the account of the authorised dealers.
e-RUPI’s Application in Education
- Identified students receive vouchers to pay school fees and expenses at empanelled institutions of their choice, public and private, which compete to get full fee-paying students.
- The resultant option and competition benefits students and schools while enhancing transparency and accountability.
e-RUPI’s Application in Ayushman Bharat healthcare initiative.
- Identified beneficiaries will receive e-RUPI vouchers of designated value tenable at empanelled healthcare facilities, providing them portability and facility choice.
- The service provider will benefit from the immediate payment.
Significance of e-RUPI
- Benefits to Consumers: e-RUPI does not require the beneficiary to have a bank account, a major distinguishing feature as compared to other digital payment forms. It ensures an easy, contactless two-step redemption process that does not require sharing of personal details either.
- Another advantage is that e-RUPI is operable on basic phones also, and hence it can be used by persons who do not own smart-phones or in places that lack internet connection.
- Benefits to Sponsors: e-RUPI is expected to play a major role in strengthening Direct-Benefit Transfer and making it more transparent. Since, there is no need for physical issuance of vouchers, it will also lead to some cost savings as well.
- Benefits to Service Provider: Being a prepaid voucher, e-RUPI would assure real time payments to the service provider.
- Huge Potential: Built on the UPI platform, e-RUPI is easy to scale by the issuer. In the days to come the user base of e-RUPI is expected to widen, with even private sector using it to disburse non-cash benefits to employees and support focussed CSR programmes. MSMEs can adopt it for Business to Business (B2B) transactions. Later, individuals could use it for gifting.
- Enhances efficiency of Governance Delivery: It can bring ease and simplicity of UPI to government welfare measures. As a one-to-many payments facilitator, it will help the government sharpen targeted welfare programmes.
- The adoption of e-RUPI in various government programmes will enhance business efficiency, simplicity, transparency, and accountability in these programmes.
- Making the distribution and acceptance of e-RUPI incentive-compatible is recommended, as demonstrated by the popularisation of Aadhar for multiple governance initiatives.
- Light regulation and the opening of e-RUPI to competition will spur innovation and adoption. All banks, small and big, NBFCs, non-bank PPI issuers, and telcos may be allowed to issue it later
Connecting the dots: