eRUPI: India's Digital Currency

 

-Vijaykumar Patil MBA I YEAR

On 2^nd August 2021, Prime Minister Narendra Modi launched e-RUPI, a prepaid e-voucher scheme. It is developed by National Payment Corporation of India (NPCL). It is a cashless and contactless instrument for digital payment.

It connects the sponsors (the one who pays the money) of the services with the beneficiaries (receiver of the service) and the service providers digitally. It does not need any intermediary for completing the transaction. The beneficiary is not required to have a bank account to avail the service provided by the sponsor. He or she just need to have a mobile phone. The beneficiary will receive an SMS and by showing that SMS, he or she can redeem the e-voucher.

Earlier, money for the welfare schemes used to come through many intermediaries like government officers. There was a great chance of corruption and getting money lesser than the allotted amount. In order to avoid this, the government had brought DBT that is Direct Benefit Transfer. Through DBT the government was able to transfer the money for welfare schemes to directly the beneficiary’s bank accounts. Although the DBT scheme is a good option to transfer the subsidy money, it has some issues like the beneficiary needs to have a bank account, money allotted for the welfare schemes could be misused, money given to one person could be used by another person.

The e-RUPI is a purpose specific e-voucher, that means t

he person can get only that service for which the voucher is issued. This feature also makes the e-RUPI safe and leak proof as there will not be any intermediaries. There will not be any delay for payments from the sponsor as the e voucher is prepaid, the money is already allotted for the service offered.

This new e-RUPI is very useful for the government welfare schemes. Let’s say the government has given fertilizer subsidy to a farmer. When the government gives subsidy for the fertilizer to a farmer, he will get the e-RUPI voucher to buy the fertilizer. This e-RUPI voucher will be in the form of a QR-code or an SMS. The farmer will go to the fertilizer shop, show the shopkeeper the QR-code. The shopkeeper will scan the QR-code, the farmer will then get the OTP on his mobile phone. After entering the OTP, the fertilizer vendor will get the money and the farmer will get the fertilizer.

This e-RUPI voucher can also be used by the private corporations. Let’s say there is a transportation company. It transports some goods by trucks. The company owner gives money to the truck driver to refill the fuel. There is a chance that the truck driver does not use all the money to fill the fuel and keeps some money with himself. In order to avoid this loss, the owner can issue the e-RUPI voucher for refilling the fuel to all the drivers. Drivers can then fill the fuel with those vouchers. This will also be easier for the drivers, as all this process will be contactless, they will not be needed to

carry any cash.

The experts are describing this e-RUPI launch as the first step towards India’s own digital currency. The government will assess the response to this scheme before launching its digital currency. Even without the future prospect of this becoming the digital currency, this standalone voucher scheme is a good move by the government. 

Vijaykumar Hanumant Patil 

MBA 1st Year

INDIRA GLOBAL BUSINESS SCHOOL ,PUNE

The Author Can be reached by mail at Vijaykumar.Patil@indiragbs.edu.in