How e-RUPI can transform government’s welfare schemes?

Relevance: Effective service delivery of Public goods

Synopsis: e-RUPI opens up a world of opportunities to the government, people, and businesses to provide, avail and pay for services seamlessly.

What is e-RUPI?

• About e- RUPI
• Its Significance

How e-RUPI can be used by corporates?

• Facilitation of 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.
• Help in mitigating problems of delivering cash subsidies and ensuring their end-use.
• The private sector will also find it helpful to disburse non-cash benefits to employees and support CSR programmes
• Other Corporate applications of e-RUPI include disbursement and easy compliance of providing employee benefits with tax implications such as meals, education, travel and health.

How e-RUPI can be used in various govt programmes?

• In cash transfers: Cash transfers are considered ineffective, given their problems, like lack of banking facilities, loss of working days of the poor etc. However, e-RUPI could solve this by making cash transfers purpose- and person-specific. It can free them from dependence on bank accounts.
• In PDS programme: e-RUPI could make the PDS programme more efficient. The inefficiency of the programme is due to 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. The value addition beyond the One Nation, One Ration Card will come from removing price distortion and the redemption of the voucher at market price by merchants within and outside the PDS network.
• In streamlining fertilizer subsidies: e-RUPI could be used to streamline fertiliser subsidies to farmers. 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. Further, the e-RUPI will be able to remove apprehensions about creating an IT infrastructure, managing nearly 3,00,000 fertiliser sale points, the collapse of dealer network and a complex system of timely credit.
• In school-voucher programmes: e-RUPI is almost custom-designed for school voucher programmes. Identified students can receive vouchers to pay school fees and expenses at empanelled institutions of their choice, public and private. It benefits students and schools while enhancing transparency and accountability.
• In basic income support: Another application is in basic income support. The lockdowns to contain the pandemic exposed the poor to acute distress, due to loss of means of livelihood. e-RUPI can mitigate their stress by rapidly distributing food and cash vouchers at scale.
• In Ayushman Bharat: A similar application of e-RUPI can be envisaged for the Ayushman Bharat healthcare initiative. 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.

The adoption of e-RUPI in various government programmes will enhance business efficiency, simplicity, transparency, and accountability in these programmes.

Way forward

Incentives need to be given to increase the distribution and acceptance of e-RUPI. 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.