Tech-driven, Tech-enabled e-RUPI Will Bridge Beneficiary-sponsor Gap
India offers over 1000 social security and ‘welfare’ schemes to ‘improve’ the lives of the poor, spends about 1.5 lakh crores.
And yet, a quarter of our citizens are deprived, and we are amongst the most unequal societies.
Expenditure is a poor indicator of the quality & quantity of public goods & services the citizens receive. Our welfare schemes deliver less than 65%; benefit fewer than half the targeted. The framework suffers several fault lines; is frail.
Policymakers focus disproportionally on input, superficially on outcome
Under this background the launch of e-RUPI, a digital ‘delivery centric’ person-purpose-specific mechanism brings hope.
Welfare leakages cost us about 50,000 crores. Ineffective implementation, ineffectual design and indifferent attitude can never be fully captured in numbers. ‘Opportunity’ lost is many times more and perpetuating.
India’s implementation track record is dismal; and our frailty. A recent government study confirms the 12 hugely funded pro-poor schemes a failure. Why do welfare schemes fail? Citizens ‘experience’ corruption. Poor implementation is visible to most.
But there is more.
Design is faulty. Planning is shoddy. Policymakers focus disproportionally on input, superficially on outcome. Schemes are regime centric, often badly targeted. Bureaucrats are indifferent; many lack of capacity, most take no ownership. There is hardly any accountability.
Holistic, noble, well-articulated, choices are ‘embraced’ wholeheartedly
E-RUPI has the potential to deliver more than just benefits; and must be evaluated as such. It is tech-pivoted behavioral ecosystem. A ‘for specific purpose’ well targeted, conditional, e-RUPI transfers will eliminate rent-seeking, stamp-out downstream pilferage and inject accountability.
The PM will coax more out of the e-RUPI ecosystem.
E-RUPI should eventually replace the excessively leaky and misappropriation ‘subsidy’ delivery mechanism. It will strengthen the framework resulting in meaningful social mobility of beneficiaries. The collateral benefits include higher moral standards, fairness, and equitable ecosystem, empowering citizens to ‘choose and pick’ the initiatives that are closer to their heart.
Welfare schemes are designed badly always mired in controversy, spattered in corruption. Delivery vehicles are equally inefficient, perpetuating ineffectual culture. The policymakers’ focus on welfare narrowly is indifferent to outcome and impact of the schemes. Leakages have denied the most deprived and equally deserving sections of the society their dues for decades.
This is the big picture.
Beneficiaries pay the price
Examples of faulty policy design and poor implementations are many. Sample this.
The marginal farmers do not benefit from subsidies. Loan waivers benefit the rich farmers at the cost of the poor. Migrant labourer is deprived subsidized food. Direct benefit transfers leaks, and often mis-targeted. Free health check-ups are rarely free, never checked. Minimum wages meant to benefit the workers hurts them most. Milk meant for the poor children end up as sweets. Free primary education attracts kids more for the food, less for education. ‘Free’ immunisation initiatives have fewer takers. Skill development programs only benefit the skill providers.
Most policymakers have not fully understood the potential of the ‘behaviour’ theory, nor appreciate the power of tech pivoted innovative ‘choice’ architecture. This is what makes the e-RUPI impactful.
Tech-driven; tech-enabled too
E-RUPI vouchers are person-purpose-specific, i.e. if ‘released’ to educate a child; it can be redeemed only for that purpose, and only by the beneficiary. The other enabling features include deliver without ‘discrepancies, without delay’ and privacy, and truly empowering. The beneficiaries neither need a bank account (a fifth have none) nor any other ‘means’ to receive the benefit. It will bridge the gap between beneficiaries and sponsors. E-RUPI is tech-driven; but more tech-enabled and will provide efficient & effective welfare services to those 20 crore Indians who are truly deprived.
Similarly it will intertwine technology, behaviour & economics to provide equal access to financial, healthcare, and equity, and meaningfully impact their lives.
Control & ‘influence’ welfare spend
A Crux study of 2020, across 26,000 income taxpayer’s highlights that people would be ‘more willing’ to pay tax if they could control welfare program features. Similarly, a high proportion of high net- worth individuals would ‘surely’ contribute if they could influence the nature of the spending.
A day may even come when the government replaces the various cesses it collects with e-RUPI. One hopes a citizen can be ‘nudged’ to transfer benefits to a poor farmer for him to buy a health insurance or to an urban widow so that she can fund her daughter’s higher education. Similarly, tax assesses can ‘prefer’ the project and transfer benefits, instead of paying cess while filing returns.
E-RUPI leapfrogs the many challenges of significant up-front investments. It only can implement better, impact more sustainably.
However, it is not a substitute for holistic, contextual design, for policymaking indifference, policymakers’ capacity, or their intent. Our institutions are fragile, beset with government intervention. They face formidable challenges. Lower capacity hasn’t helped. India needs to strengthen its institution, and enhance accountability in those.
Several features of e-RUPI, particularly the one where a citizen could decide where and how her contribution could be spent is defining, and truly transformational. While many hail the initiative as technological, this is as much behavioural. The technology pivoted initiative will enable transparent, leakage free delivery. The ‘behavioural’ will catalyse the building of an ecosystem that will truly inject integrity in every transaction, encouraging well-to-do to pledge.
Bridge beneficiary-sponsors gap
E-RUPI initiative will give the government the confidence, more importantly the moral courage to launch several other innovative, yet robust schemes. The idea is impactful.
However, the PM is going beyond; visioning wider, scaling higher. His goal is to empower, and equally motivate citizens to pledge at least some ‘benefit’ for the deprived. Similarly, the equitable and impactful e-RUPI ecosystem should be able to coax more from the corporates (CSR).
The PM’s vision has the potential to transform the subsidy regime forever. It will positively impacting the outcome and add a sixth to the GDP directly & indirectly.
But more importantly it will persuade the citizens to associate, involve and partner the state in ‘participatory’ nation building, enhancing the relationship between the state and the people.
