How is e-RUPI a game-changer?

PM Modi’s e-RUPI initiative stands apart from other recent moves by being game-changing in more ways than one. Through e-RUPI, the government intends to provide benefits more efficiently and ensure that these benefits reach the intended beneficiaries without leaking.  

e-RUPI Overview

Prime Minister Narendra Modi established e-RUPI, a new cashless and contactless digital payment system, in August 2021 as part of his long-term aim to eliminate intermediaries and achieve leak-proof Direct Benefit Transfer (DBT) of welfare programs.

The beneficiary of an e-RUPI just requires a mobile phone to get the virtual gift card, which corporate and government entities can share by SMS and QR code. The process is contactless, simple, safe, and secure, and it protects beneficiary information.

The end-to-end transaction process is relatively faster and more reliable because the voucher already contains a pre-blocked amount. It was developed through collaboration between the Department of Financial Services (DFS), Ministry of Health and Family Welfare (MoHFW), NPCI stands for National Payments Corporation of India.), National Health Authority (NHA), and some partner banks.

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Significance of Direct Bank Transfer and UPI

More than 43 crore Jan Dhan accounts exist now, guaranteeing that the poor and underprivileged receive government subsidies and benefits that are legally theirs. The Centre also provides cash to state governments to cover pensions, fertilizer subsidies, and now-defunct LPG subsidies, as well as other Covid-related payments. False beneficiaries were easy to identify with the mechanism of distributing funds directly to recipients via Jan Dhan account, Aadhar, and mobile (JAM trinity), and the government was able to avoid leakages in public monies. JAM has saved about Rs 40,000 crore from going into the hands of middlemen per year, averaging over Rs 1.78 lakh crore.

The Modi government’s Direct Benefit Transfer scheme, which has delivered over Rs 17.5 lakh crore to beneficiaries in the previous seven years, has been empowering in every way. India’s digitization is clearly evolving and setting new benchmarks. The unified payments interface (UPI) platform processed 324 crore transactions worth Rs 6.06 lakh crore on July 20, 2021. Following a transaction volume of 280 crores worth Rs 5.47 lakh crores in June 2021, the increase is significant. According to recent figures, UPI processes 9-10 crore transactions each day.

Significance of e-RUPI

It is expected that the The introduction of e-RUPI will reveal the current digital system’s flaws. payment infrastructure, a crucial step toward creating future digital currencies. In addition, shortly, the government will establish a Central Bank Digital Currency (CBDC).

e-RUPI is a game changer

PM Modi’s e-RUPI project is more game-changing than any other government initiative in recent years. The government anticipates that e-RUPI would increase benefit delivery efficiency and ensure that beneficiaries receive their benefits.

Noncash and contactless payments are available through the e-RUPI system. These are mobile vouchers that are given to the beneficiary’s phone via QR codes or SMS chains.

The eRUPI feature of Mudra Bank facilitates digital connections between service initiators and beneficiaries without physical interfaces. The service provider is also paid only after the transaction is complete. Moreover, the payment is prepaid, so the service provider does not have an intermediary. In addition to the e-RUPI single payment mechanism, users will have an alternative to using a debit card or digital wallet and access to online banking. A UPI platform was developed by the National Payments Corporation of India (NPCI) together with the Ministry of Financial Services, the Ministry of Health and Family Welfare, and the National Health Service as part of the e-RUPI platform.

The e-RUPI, an extreme measure, will ensure that people have access to welfare programs while preventing cash from leaking. Medicaid can also be utilized for maternity and child care, tuberculosis prevention and eradication, the Medication and Diagnostic Plan’s support plan for medication and nutrition, Ayushman Bharat, fertilizer subsidies, and other social programs. NPCI is planning to launch an e-RUPI website soon. Only the National Payments Corporation of India will have the authority to control, circulate, and establish the framework for India’s first digital currency, e-RUPI.

The best example of last-mile delivery is the use of technology to deliver cooking gas subsidies, ration money, and other social security schemes directly to beneficiaries’ bank accounts. The e-RUPI mechanism promotes leakage-free targeted delivery to ensure that appropriate aid reaches the needy by providing an e-voucher that both government and private entities can use. In addition to bringing transparency, the eRUPI voucher will assure that private funds are used for the purposes intended by the donors.

PM Modi’s statement, “We must ensure that technology is affordable, accessible, and creates value,” accurately sums up what e-RUPI, India’s own digital currency, would entail.

What are all schemes expected to be delivered via e-RUPI?

e-RUPI is seen as a game-changing step in offering transparent welfare services. Voucher-based solutions, according to the government, can be used for money transfer schemes, maternity and child welfare schemes, TB eradication programs, and Pradhan Mantri. Ayushman Bharat, Jan Arogya Yojana, fertilizer subsidies, and so on.

Will e-RUPI be limited to government welfare schemes?

In addition to incorporating e-RUPI vouchers into government programs, it has also allowed the commercial sector to benefit from the platform. Various private organizations are being encouraged to use digital e-RUPI vouchers for their corporate social responsibility (CSR) programs and employee welfare schemes.

How will e-RUPI redefine the delivery of welfare money to beneficiaries?

By bridging the gap between beneficiaries and sponsors, the e-RUPI digital payment solution reduces physical contact and touchpoints in the service delivery process. Furthermore, today’s pandemic-driven times necessitate a digital approach to social programs.

e-RUPI vouchers are pre-paid. The technology will ensure that no money is lost as long as the beneficiary completes the transaction. Beneficiaries will not require cards, digital payment apps, or online banking.

The State Bank of India, Bank of Baroda, Axis Bank, ICICI Bank, Punjab National Bank, and HDFC Bank are among the banks that will participate in the scheme.

Frequently Asked Questions

Can e-RUPI be considered a cryptocurrency?

UPI systems underpin e-RUPI, whereas blockchain underpins cryptocurrencies. So, it’s similar to the online gift vouchers we get, but this time the government is the one issuing them.

How does e-RUPI work?

e-RUPIs are encoded QR codes or SMS numbers delivered to the recipient’s phone. The service provider is only paid after the transaction is completed.

What is the e-RUPI app?

e-RUPI is a cashless, contactless voucher-based payment method that allows users to redeem vouchers without the use of a credit card, digital payments app, or internet banking.

Does e-RUPI voucher require debit/credit cards or internet banking to use?

Credit cards, debit cards, and online banking are not required to use these vouchers.

Is a bank account required to use the e-RUPI digital payment system?

No, a bank account is not required. It is possible to redeem e-RUPI vouchers without having a bank account.

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