E-RUPI: The Panacea That Can Help Create A New India And Win Modi Even A Bigger Victory In 2024, If Done Right

There were many factors that were responsible for Narendra Modi-led Bharatiya Janata Party’s impressive 303 seat victory in the 2019 general elections. The Balakot airstrikes in Pakistan proper is given a lot of credit by political analysts.

While the nationalism factor was a big positive and ensured more seats and bigger margins, the victory was ensured much before, thanks to the solid foundation laid by the Modi government through the ‘toilets, houses and cylinder’ trio of welfare delivery.

This, in turn, was built on the ‘Jan Dhan accounts, Aadhar cards, Mobile number’ (JAM) trinity put together after concerted efforts by the centre. From almost scrapping the Aadhar card project started by the UPA government after coming to power, PM Modi, on being convinced by the architect of the project, Nandan Nilekani, converted it into a potent tool at the state’s disposal in a couple of years by adding the missing J and M layer.

While JAM helped plug various leakages in the welfare delivery system, saving tens of thousands of crores of rupees to the public exchequer, the genius of the set-up was its employment by the Modi dispensation in the political economy — providing bare essentials like toilets, houses and cylinders to tens of millions of people which endeared these hitherto non-BJP voters to the BJP and expand the party’s social base.

The electoral impact of this has been visible not just in the 2019 general election but in various state polls as well.

After May 2019, analysts wondered about the next important trio that could prove to be as electorally potent. Jal Jeevan Mission to provide tap water connections to every rural home launched on 15 August 2019 was seen as an obvious extension of Modi’s microeconomics — delivering important, essential and tangible benefits to the lowest strata of the society.

But would one factor suffice? Surely not. The kind of mandate Modi received in 2019 was for much more. The people of India gave him a blank cheque to write his legacy in the most glorious terms, and that would only materialise if he can leave an impact on not just the present but the future of India and a whole generation of Indians.

This is where the e-RUPI platform comes in, which was launched by PM Modi on 2 August.

“The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app or internet banking access, at the merchants accepting e-RUPI. e-RUPI would be shared with the beneficiaries for a specific purpose or activity by organisations or government via SMS or QR code", the National Payments Corporation of India (NPCI), which has developed this platform on the existing Unified Payments Interface (UPI) explains.

Basically, this is a national e-voucher system which can be used by both the government and the private sector to target beneficiaries for very specific purposes.

Think of any welfare benefit/help a citizen may need, and e-RUPI can be used for that. This is obvious. But there is more to it than meets the eye.

First, it will build immense trust in transactions. Think of a person who needs immediate financial help for his medical needs, and if a crowdfunding platform is collecting money to help him out, they needn’t put so much effort into verification. An e-voucher alone will ensure that the money is used for a specific need at a specific endpoint.

Imagine this at a scale of a few hundreds or thousands. That’s at a company or organisation level. Some fraction of employee salaries can be targeted for specific purposes. Now, think of it on a massive scale.

That’s at the government level. The benefits and cases for use are too many to even begin listing.

Second, and this is more of a hope, e-RUPI can insure the private sector against the worst impulses of the government. Take the Covid-19 pandemic.

When there was a rush of patients in the first and second waves, the state governments started squeezing private hospitals and forced them to subsidise patient costs rather than fulfilling their own duty.

They transferred their economic burden on to the private sector. Ditto for schools. Rather than investing intelligently in government schools, the centre forces non-minority private schools to reserve a 25 per cent seat quota at highly subsidised rates (under the Right to Education Act) and doesn’t reimburse them for years, even for that paltry rate.

The list goes on and on.

e-RUPI can transfer the responsibility back to the government as it should be, of course, government permitting.

So how can Modi utilise e-RUPI to help transform India and win a bigger victory in 2024?

First, the platform needs to be deployed massively in the education sector. Voucher programmes in schools have been highly successful in the United States and other countries, where they have been deployed at scale.

The National Education Policy (NEP) had recommended that the Right to Education Act will have to be amended if the goals of NEP are to be realised in letter and spirit.

Schools and students have been hit the hardest since the pandemic began. The rise in government school enrolments (most likely due to financial stress on parents) should really worry us. There can’t be a better time to use e-RUPI for schools.

It will not only help poor students go to budget schools and learn better, but the scale of new influx will help revive the budget of private schools that have been battered by the pandemic.

Estimates suggest that there are 12-13 crore students enrolled in government schools in India.

e-RUPI vouchers worth Rs 1,500-Rs 2,000 per month can be provided to say 10 crore children from the poorest households to attend a budget private school of their choice (or take online classes, extra tuition of specific subjects if they stay in government schools — flexibility should, however, be there).

This will cost Rs 2-2.5 lakh crore — split between the centre and states — not a high cost to pay for reaping the demographic dividend that we so badly need to become a rich country.

A part of the Rs 95,000-odd crore budget for Education at the centre can be used for this initiative. Ditto for the states. The centre can certainly borrow more. Given that this would be a capex for all practical purposes, the rewards a decade down the line would far outweigh the costs and payback to the country as a whole in spades.

It’s pertinent to note that even the total available seats under the RTE quota per year are just two million, 75-80 per cent of which remain vacant.

At the very least, these can be targeted. Giving vouchers to even one crore poor students will bring tremendous benefits in the long term.

Second, the sector to target is healthcare. Despite the fanfare with which Ayushmaan Bharat was launched in 2018, it has not had the required impact.

With a paltry budget of Rs 6,000 odd crore, it would be farcical to expect any wonders. Had a serious attempt been made to come up with a policy that addressed the problems in the sector, a lot of financial misery of thousands of families could’ve been avoided during the pandemic.

India ranks 15 from the bottom in the world in out-of-pocket expenditure as a percentage of total health expenditure. The average figure for even sub-Saharan African countries is 33 per cent compared to India’s over 60 per cent.

For high-income countries, it’s much less at 13 per cent.

The 60 per cent figure for India translates to spending of Rs 320,000 crore per annum by households, most of them poor. One can imagine the succour that health e-vouchers via e-RUPI can bring to millions of Indians every year.

Third, agriculture is another big sector that needs focus, not least because it employs a majority of India’s population. The nudge potential of e-RUPI here is massive.

The government can incentivise less use of fertilisers, types of fertilisers, crops that the country needs and those which don’t use too much water (can target non-MSP crops, which will bring down government’s expenditure too), even seeds, machinery or equipment to move farmers towards productive methods.

The scope of positive deployment is endless. The whole industry can be changed in a matter of a few years.

e-RUPI’s intervention in all the three areas — education, health and agriculture — will provide tangible benefits to tens of millions, but these will not be run-of-the-mill subsidy schemes but an investment in India’s future and will truly empower citizens like no government welfare programme has ever done.

PM Modi has his task cut out for himself.