The launch of e-RUPI – the electronic rupees unified payments interface, to give its full form – marks another step forward in the Narendra Modi government’s efforts to push the government’s welfare schemes into the ‘Direct Benefit Transfer’ (DBT) mode, as well as to convert more and more of the government’s transactions with citizens into a cashless mode.
The National Payments Corporation of India, which has developed the hugely successful Unified Payments Interface (UPI) platform, has also developed this electronic voucher-based digital payment system, which will run on its UPI platform. To start with, e-RUPI, developed in collaboration with the department of financial services, ministry of health & family welfare and national health authority, will be used to deliver the benefits of certain financial assistance, as well as health schemes.
The nomenclature is confusing – e-RUPI sounds deceptively like e-Rupee and has been confused by many to be a form of digital currency issued by the government. In reality, it is essentially a pre-paid voucher for delivery of government services. It is a QR code or SMS string-based e-voucher, which is delivered to the mobile phone of the intended beneficiary. Since it is generated both as a alphanumeric string and a QR code, it can be used even by those with only a basic feature phone, which overcomes one of the biggest stumbling blocks facing other forms of cashless digital payments like UPI – the necessity of having a smartphone to run the app and internet connectivity in order to execute the transaction.
Now, the e-RUPI payment service will enable users to redeem the voucher without a card, digital payments app, or internet banking access. At the moment, e-RUPI is aimed to be used for delivering services under schemes meant for providing drugs and nutritional support under mother-and-child welfare schemes, TB eradication programmes, drugs and diagnostics under schemes like the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, etc.
In fact, the Prime Minister, while launching the scheme, suggested in his speech that even non-government entities could use this. Somebody wishing to support the education of a disadvantaged person, for instance, could purchase and transfer the voucher, which can be exchanged by the beneficiary with the service provider – the school or college in this case – in lieu of fees. The voucher can be redeemed by the service provider for actual money, completing the transaction. Or, as the PM suggested, the charitably inclined can pay for, say, a 100 Covid vaccine vouchers, which can be issued to beneficiaries.
Being cashless and contactless, as well as being fully trackable, the e-RUPI is a big improvement on human interface-based benefit delivery. While there have been a plethora of schemes launched over the years to benefit the poor, most have suffered due to misidentification of beneficiaries (either by error or deliberately, to divert the funds), corruption and leakages, as well as rent extracted by officials and middlemen for delivering the intended benefit, not to speak of the struggles the poor and illiterate face with India’s forms, records and identity-obsessed bureaucracy. For the service provider, it ensures timely payment, without the need for official intervention (and rent extraction), since the voucher is actually a pre-paid instrument.
Pre-paid instruments for delivering benefits are not a new idea. Several countries around the world use food stamps, for example, to provide food assistance. Even the private sector uses them extensively to give benefits to its employees – food and lunch coupons and fuel or transport vouchers are examples of this. To that extent, a cashless system using the ubiquitous mobile phone as a delivery vehicle is a step forward in this direction. It also introduces trackability and prevents misuse, since the transaction is completed only after the service is provided, although here too, the system is not foolproof.
The bigger challenge remains the delivery of the service itself. By itself, the e-RUPI is a mere token. While it has certain inbuilt advantages to prevent misuse, it does not in any way have a bearing on the service itself. So, a voucher for getting a vaccine shot, for example, is useless without having a vaccination centre within accessible distance and that centre being stocked with the vaccine.
The same goes for all other government services where a combination of corruption, indifference and a lack of accountability for quality of service has led to wide gaps between the promise of the countless pro-poor schemes which have been launched over the years and their actual performance. The system is still weighted against the poor, the disenfranchised and the educationally disadvantaged.
Unless there is fundamental reform of the way the government functions, this is unlikely to change. The deep-rooted ‘mai-baap sarkar’ syndrome, where government functionaries and politicians tend to see the schemes as means for rent-seeking and wielding patronage power, also needs to be stamped out. Otherwise, the e-RUPI may go the way of other such reform initiatives – promising much but delivering little.