Home Payments India launches e-Rupi for ‘leak-proof’ digital welfare payments

India launches e-Rupi for ‘leak-proof’ digital welfare payments

e-RUPI launch: PM Narendra Modi (left) presents the new digital payment instrument via his YouTube channel on 2 August 2021 | Global Government Fintech screenshot

A cashless and contactless instrument for government welfare payments that has been developed by numerous state departments and authorities is launching this week in India.

The ‘e-Rupi’ pre-paid e-voucher scheme has been created by National Payments Corporation of India (NPCI) in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare and National Health Authority.

e-Rupi – whose name owes to India’s currency, the rupee – is described as a ‘person- and purpose-specific digital payment solution’ that comes in the form of a QR (Quick Response) code or ‘SMS string-based’ e-voucher that is delivered to beneficiaries’ mobile phones.

Users will be able to redeem the e-voucher at the service provider without need for a bank card, digital payments app or internet banking access.

As well as improving the ease with which state authorities can get payments to hard-to-reach or unbanked citizens, the aim is to also to ensure ‘leak-proof’ payments, according to the government.  

‘Expected to be revolutionary’

‘Over the years, several programmes have been launched to ensure that the benefits reach its intended beneficiaries in a targeted and leak-proof manner, with limited touch points between the government and the beneficiary,’ the government announcement states.

‘The concept of [this] electronic voucher takes forward this vision of ‘Good Governance’… it is expected to be a revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services,’ the announcement continues.

The e-Rupi can also be used for delivering services under schemes meant for providing drugs and nutritional support under ‘mother and child’ welfare schemes; tuberculosis eradication programmes; drugs and diagnostics under schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (national health insurance scheme that aims to provide free access to healthcare for low-income citizens); and fertiliser subsidies.

The private sector will also be able to leverage the e-vouchers as part of their employee welfare and corporate social responsibility programmes, the government says.

Covid-19 checks poverty-reduction progress

Narendra Modi, who has been the country’s prime minister since 2014, launched the e-Rupi scheme today (2 August) by video, having already taken to Twitter to promote the annoucement:

Authorities have been striving to bring more of India’s vast population of more than 1.3 billion into the banking system.

The country has made ‘remarkable progress’ in reducing absolute poverty since the 2000s, according to the World Bank (WB). But the Covid-19 pandemic has ‘reversed the course of poverty reduction, at least temporarily’, with the economic slowdown triggered by the outbreak believed to have had a significant impact on poor and vulnerable households, the US-headquartered institution notes.

The informal sector, in which the vast majority of India’s labour force is employed, has been particularly affected by Covid-19. As in most countries, the pandemic has exacerbated vulnerabilities for traditionally excluded groups, such as youth, women, and migrants, the World Bank states.

In 2015 the government launched its ‘Digital India’ campaign, which involves improvements to digital infrastructure, digital literary and delivering services digitally.

NPCI is the non-profit umbrella initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA). Its Unified Payments Interface (UPI) instant payments system is powering the e-Rupi.  

*** The central bank has issued an update to its composite RBI ‘Digital Payments Index (RBI-DPI), which has tracked the extent of digitisation of payments across India, based on five ‘broad parameters’, since March 2018. The RBI said on 28 July that the index has ‘demonstrated significant growth… representing the rapid adoption and deepening of digital payments across the country in recent years.’


‘State payments via QR code take step forward in rural India’ – our news story (28 Aug 2020) on the Andhra Pradesh regional government launching an initiative to promote digital payments and drive financial inclusion (working alongside Canara Bank, which is one of India’s largest public sector banks, and the NPCI)