PM Modi launches 'big reform' e-RUPI to make targeted DBT benefits work

It's a digital voucher developed by NPCI that will be transferred directly to mobile phone as an SMS string or QR code, redeemable at merchant points delivering services related to the benefit scheme

Prime Minister Narendra Modi on Monday launched a digital direct benefit transfer (DBT) platform called e-RUPI, which aims at making sure that the money transferred by the user, in this case, the government, is used exactly for the same purpose as it is intended to be.  

Prime Minister Modi termed the e-RUPI as a “big reform”, in line with the launch of BHIM-UPI payment system in December 2016. The UPI system has indeed changed the payment landscape in India and has become the preferred mode of payment in many cases. In July alone, UPI registered 3 billion transactions, worth Rs 6 trillion-plus.

What is e-RUPI?

It is a one-time digital voucher developed by National Payments Corporation of India (NPCI) that will be transferred directly to the mobile phone as an SMS string or QR code which can be redeemed at particular merchant points that are specifically focused on delivering services related to the benefit scheme for which the money has been transferred. To start with, e-RUPI has been launched to transfer benefits schemes of the Ministry of Health.  

Instead of crediting the DBT amount directly to the beneficiary bank account, through the e-RUPI, an equivalent amount voucher will be sent directly to the beneficiary’s mobile phone in the form of an SMS string, or a QR code.  

The beneficiary will have to show the SMS or QR code to specific centres where it can be redeemed with a code delivered to the mobile number where the SMS or QR code had come.  

It will be targeted for a specific purpose and cannot be used for any other thing. For example, if the e-RUPI has been sent to the beneficiary to avail vaccination, it can be used at the vaccination centre only to get the vaccine.  

This would ensure that the “money is utilised for the same purpose it is given for,” PM Modi said while inaugurating the facility.  

Earlier, as the benefit amount used to get directly credited to the account of the beneficiary, it was possible to withdraw and use it for, say, consumption purposes. With the new transfer scheme, that can be plugged.  

However, it is not clear yet what happens to those beneficiaries who do not have even a basic mobile phone. In such cases, DBT scheme would likely continue for some more time, said a banker.  

PM Modi said going forward, e-RUPI will be used for other DBT schemes of the government as well. Currently, there are 315 DBT schemes run by 54 ministries of the government. However, not all schemes are for everyone. Data from the National Informatics Centre (NIC) show till date, 7.32 trillion transactions have been done, transferring about Rs 1.42 trillion to the beneficiaries.  

While banks and payments systems have a huge role to play in this ecosystem, hospitals, and corporate entities have also shown interest in adopting this technology, the Prime Minister said.

"State governments must also use the platform for their welfare schemes in order to develop an honest eco-system,” he said.

However, the e-RUPI can be used by even private corporate entities as part of their corporate social responsibility. The Prime Minister gave an example of a corporate sponsoring vaccination of 100 people in a private hospital. In that case, the beneficiary will get the vaccine free from the hospital, but only after showing the e-RUPI SMS or QR code.  

The DBT ensures that money reach the intended beneficiary and doesn’t end up in the wrong hands, PM Modi said, which so far may have saved at least Rs 1.75 trillion.

With DBT, more than 90 crore citizens have benefitted, including through schemes such as PM Kisan Samman Nidhi, public distribution services, LPG gas subsidy etc.  

“India has shown the world that in adopting technology and leverage it for connecting lives, the country is not behind anyone. In digital innovation, service delivery using technology, India is providing global leadership,” PM Modi said.

“India’s digital adoption has been acknowledged by the world. So much of technology solutions are not present even in large developed countries,” PM Modi said.

He highlighted fastags for vehicles in tolls, digilocker facility for carrying certificates and documents digitally, 59 minutes loans for entrepreneurs in micro, small and medium enterprises as what has been made possible through technology adoption in the country. BHIM UPI not only made it easy for businesses to transact money but also empowered the poor in carrying out their businesses and transactions easily, he said.

“Rupay card is India’s pride,” he said, adding other countries have shown interest in India’s payment ecosystem, and actively seeking help.

In a bid to internationalise India’s homegrown payment system, Rupay card has been launched in Singapore, and Bhutan to start with. In total, 66 crore Rupay cards have been issued so far, outgrowing traditional cards providers in India.