A national menace will finally be constrained by smart public policy. Here's how.
Rajiv Gandhi, India's former Prime Minister had once succinctly remarked that only 15-20% of the intended monetary support reached the "correct" recipient. Which was a rather gentle way of saying that 80% of government money intended for welfare was lost to corruption. Staggering but true numbers. Transparency International, a highly acclaimed international watchdog agrees.
Source: Transparency International
India had a subpar rank of 86th (out of 180 nations). However, things have improved recently as not a while back, India had an even poor rank of 150 after the 2G Scam & Asian Games Scandal in 2013. Things are set to improve further now with the smart policy of eRUPI.
eRUPI is a truly modern public policy tool that can make welfare a truly seamless affair.
Previously, the governments had to provide rations (they still do) & subsidies to the poor. After a subsidized product/good was purchased (say fertilizer), the government gave the subsidy to the fertilizer company. However, the target beneficiary usually didn't get the benefit in this manner.
The Jan Dhan Yojana launched a flurry of banking momentum for India. Linked with Aadhar, Direct Benefit Transfers (DBT) became really easy, This removed all the friction i.e. no more intermediaries in the form of companies or corrupt officials really reduced leakages. However still 20% of the Indian population above the age of 15 had no bank account. Plus, the government also could not ensure that money was spent for the specified DBT or not i.e. money credited for buying LPG Cylinder through the Ujjawala Yojana was exclusively spent in doing so or not.
eRUPI is a modern upgrade over direct benefit transfers. Consider them as a modern digital voucher that can be redeemed for specific purposes through a QR code or an SMS. All this will be based on UPI, a digital payment infrastructure bootstrapping digital transactions at lightning speed in the country. In fact, India has toppled China to have the most digital transaction in the world in terms of both volume & frequency. The graph below is a great illustration of India's payment odyssey.
Source: NASSCOM
In this system, payment is made to the service provider only after the transaction has been completed & verified by the recipient. The voucher can be redeemed eve without any online banking or card. There is no point of contact between government officials & recipients. Finally, it can be employed by the government to target specific groups of people with specific subsidies with guaranteed usage for the desired transaction.
So you see how easy to implement & use it is! Its use cases are limitless as well. It can be issued to:
Provide free booster vaccine (3rd dose) to economically weaker sections of the society only.
Give immediate emergency funds to families of a specific geographic location (say cyclone hit coastal districts of Assam).
Transfer fertilizer subsidy to farmers with legitimate landholdings only (digitization of land records is underway through the DILRMP).
Provide services under the Maternal & Child Benefit Plan to newborns & mothers who require state support.
You get the picture. The real innovation here is that a simple SMS or QR Code can not only provide goods but also services to citizens who actually need them. Plus, there is tight control on where the credit money is spent. This also shows how governments can customize & target the recipients of their public policy. Imagine the potential when even municipal bodies & gram panchayats are given eRUPI slots to allocate to the needy!
The government will have to work hard to make a solid & robust infrastructure that is safe from malicious cyber attacks. Proper thought should also be put into ensuring that the transfer is authenticated by the real recipient. Another point to ponder upon would be to oversee if eRUPI is credited to the needy or those close to the men in power.
Every once in a while, it feels good to see technology being put to good use. Rather than making millions, this ingenious piece of tech will impact the lives of millions for a change. And I am excited to see eRUPI out in the wild soon; fading corruption one transaction at a time.
WHAT YOU CAN LEARN FROM THE POLICYMAKERS
Having a bottoms-up approach to problem-solving once in a while is good. The policy focused on the recipients rather than the corrupt government officials. Rather than finding the corrupt officials, they removed all the officials from the equation altogether. So the next time you face a business or personal problem, have a contrasting perspective if you are stuck.
We all talk about how AI & robotics will render millions jobless in the near future. But we also fail to understand the tremendous potential it has in solving real-world problems. We can try to have a look at both sides of the coin before making instinctive decisions (ps: If you are a content creator like me, always try to show both the angles to the viewer. For example, I showed how not everything is not hunky-dory by briefly touching upon the weaker points of eRUPI).