Context: On August 2, Prime Minister of India launches the e-RUPI scheme, which is another initiative in line with the goal of ensuring ‘leak-proof’ delivery of benefits. 

Background

• The role of intermediaries and middlemen is seen as a significant drawback in the delivery of government aid to people as it allows leakage and pilferage that end up depriving the ultimate beneficiaries. 
• A major step towards the goal of reducing duplication and fraud in welfare schemes was the launch of the Direct Benefit Transfer (DBT), which seeks to utilise modern technology and IT tools to achieve faster flow of funds and accurate targeting of beneficiaries.

About e-RUPI initiative

• It is a cashless and contactless instrument for digital payments. 
• It has been developed by National Payments Corporation of India (NPCI) on its UPI platform, in collaboration with the Department of Financial Services, Ministry of Health and Family Welfare and National Health Authority.
• Being prepaid in nature, it assures timely payment to the service provider without involvement of any intermediary.
• It will allow users to redeem the voucher without a card, digital payments app or internet banking access, at the service provider.

Its Working

• It acts as an e-voucher based on a QR code or SMS string, which is delivered to the mobile phones of the beneficiaries.
• It connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface. 
• It also ensures that the payment to the service provider is made only after the transaction is completed. 

Key Benefits

• It is expected to be a revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services. 
• It can also 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 Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies.
• Even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes.

Status of MOBILE PHONE PENETRATION IN INDIA

• While the DBT scheme relies on the troika of Jan Dhan accounts, Aadhaar numbers — although Aadhaar is not mandatory — and mobile phones, the e-RUPI system will not require users’ bank account details. 
• The only requirement is for the beneficiary’s mobile phone number. The DBT scheme notes that it relies on 100 crore mobile connections to reach aid to beneficiaries.
• Reports note that while over 85 per cent of the urban Indian population owns a mobile phone, in 2019, for the first time, rural users at 277 million outnumbered users in urban areas 227 million. 
• It is also estimated that two out of every three users will have a mobile phone by 2023, while one in two users will have a smartphone.