What is e-RUPI and how can it plug leakages in direct benefits transfer?

With the JAM trinity of Jan Dhan bank accounts linked with Aadhaar and mobile numbers, the government has changed how India delivers welfare benefits to the poor. The digitisation of India’s welfare drive was done to ensure there was no corruption and leakages in schemes important in ensuring that no Indian goes to sleep hungry.
 
And now, with e-RUPI, India is trying to better its direct benefit transfers (DBT) for those still without bank accounts.
 
Blending the government’s focus on fintech and penchant for techno-solutionism, e-RUPI will be like the gift vouchers you get after making payments through platforms like Google Pay.
 
These vouchers will be redeemable at a specific store, with certain terms and conditions.
 
To put it simply, these will be prepaid gift vouchers that will be delivered to the mobile phones of the beneficiaries of welfare schemes in an SMS string or a QR code.
 
These vouchers will be redeemable at specific accepting centres like ration shops or shops selling LPG cylinders.
 
In a statement, the Prime Minister’s Office (PMO) said e-RUPI was expected to be a revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services.
 
Being prepaid in nature, it would assure timely payment to the service provider without the involvement of any intermediary, the statement added.
 
e-RUPI has been built by the National Payments Corporation of India (NPCI) on the UPI platform.
 
NPCI has onboarded banks as issuing entities.
 
e-RUPI came about amid the government’s alleged failure to adequately help the poor with its welfare schemes, especially in the wake of the coronavirus pandemic.
 
There were instances of beneficiaries facing problems linking their Aadhaar to their ration card.
 
In its National Election Study (NES) during the 2019 Lok Sabha elections, Lokniti-CSDS had asked electors whether they had ever been denied food grains due to non-possession/production of an Aadhaar ID or because their Aadhaar biometric details didn’t match or on account of technical or server issues.
 
28% or over one in four households said they had indeed experienced such a situation.
 
And then there’s the separate matter of many poor people still not possessing bank accounts and hence not being able to receive DBTs from the government.
 
e-RUPI could solve all that.
 
And it’s programmable. That means it can be used only for a specific purpose as determined by the issuer.  This way, the government can ensure there is no misuse or leakage.