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Prime Minister Narendra Modi on Monday launched a new digital payment system that can ensure that financial aid, including state benefits and charitable contributions, is used only for the intended purpose.

The e-Rupi payment system, developed by the National Payment Corp. of India (NPCI), can be used to send funds to a beneficiary’s mobile phone for a specific purpose in the form of a quick response code or a text-based e-voucher. This can then be used to purchase specified goods or services, ensuring that the funds are used for the intended purpose.

“If someone wants to help then, instead of cash, e-Rupi could be given. This will ensure that the money given will be used for the intended purpose," the Prime Minister said.

Modi said that this payment system is being used in the health sector in the initial phase.

This payment system has the potential to transform the way the government pays fertilizer subsidies. After implementing direct benefits transfer in the case of cooking gas, scholarships and some other benefits, the government is keen on implementing the same for providing fertilizer subsidies. At present, fertilizer subsidy is transferred to the manufacturer based on transaction details captured in a point-of-sale device at the time of the sale. E-Rupi could enable the government to deliver the benefit directly to the farmer in the form of vouchers, which could be redeemed to buy fertilizers. The use of point-of-sale devices and neem-coating of urea has already helped in reducing the diversion of the subsidized commodity.

DBT has helped the government prevent the leakage of subsidies in a big way. Modi said that more than 300 schemes are using DBT, and more than 17.5 trillion have been transferred directly to the accounts of people via DBT.

“The biggest benefit of this all is that 1.78 trillion is prevented from falling into the wrong hands," the Prime Minister said.

Modi said the development of digital payment infrastructure in the country had empowered the poor, small businesses, farmers and tribal population.

The new payment system will also help NGOs and corporations in their charitable activities. If an organization wants to vaccinate 100 people in a private health facility, then e-Rupi voucher could be given, which will make sure the fund is utilized for vaccination itself, the Prime Minister explained.

Modi also cited possible uses in other areas such as assistance towards food, books, uniform or fertilizers.

An official statement from the government pointed out how e-Rupi is expected to help in leak-proof delivery of welfare services. This can 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 like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, etc., said the statement.

Even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes, the statement added.

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