E-RUPI

IMPLEMENTATION
IN INDIA

1 MASSIVE X presentation to DesignBall team

Rationale
Rationale
This research paper will revolve around the
economic impact of e-Rupi which will be
implemented soon by the government of India and
other regulators such as the NCPI, Reserve Bank of
India, and others. Thus we plan to explore with aid
of various economic strands of thinking i.e.
Macroeconomics, International Economics,
Development Economics and their relative
Econometrics techniques
 
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Introduction
e-RUPI is a digital currency solution, It is a cashless and contactless digital payment
mechanism that will be sent to recipients' mobile phones through an SMS or QR code.
This will function similarly to a prepaid gift card

According to the administration, e-RUPI would ensure that welfare services are delivered
securely. It can also be utilized to offer provide medicines and nutritional assistance.

The government will disperse the funds through QR code or SMS string, which recipients
will use to verify payments. On the other side, government agencies will send data to
partner banks, who will subsequently produce the appropriate codes

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Literature Review

Paper 1: Cryptocurrencies and Hyperinflation

Summary:

Given past evidence, Hyperinflation has mostly been caused by economies that sought
to print more money to pay their debts. This results in an oversupply of money
compared to the country’s resources which led to hyperinflation.

A cryptocurrency like bitcoin can solve this problem by:

• Cryptocurrencies are decentralized and as such, there is no scope for

mismanagement or manipulation by Central Authorities

• Bitcoin clears extremely fast I.e. in one hour while banks take days or weeks

• Bitcoin has a final and fixed supply. The number of bitcoin will not increase. This
is why bitcoin cannot be produced or deployed for quantitative easing strategies to
grow the money supply

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Literature Review
Paper 2: Acceptance of mobile payments and UPI technology
Summary:

The Digital India movement has made it easier for Indians to migrate into paperless
digital economy. However, one factor that had the greatest impact was
demonetisation.

Demonetisation severely reduced the supply of cash money in the economy which led
Indians to explore other options such as mobile banking, google pay and the Unified
Payments Interface

Nevertheless, the concern about accessibility and security was still a limiting factor for
Indians. However, this factor isn’t specific to digital payments, security and privacy of
data are a potential challenge faced by many businesses in the ecommerce space
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Methodology

01 Surveys
02 Case Studies
03 Statistics
04 External Resources:
1) research papers
2) publications
3) Interviews

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 Scientific Methodology

b]
Hypothesis.
Since we are aware of the quote “the past is
the best indicator of the future”, we believe
that this is a very likely scenario to take place

s Primary Objective
To what extent will the implementation of E-Rupi lead

] to unplanned crisis

x Secondary Objective

f]
What are the various parameters which could be
affected with the implementation of E-Rupi and what
could be the degree of impact on the parameters ?
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Assumptions
● The dataset shall comprise information from the years 2000 to
2020 inclusive

● While comparing countries, we shall consider paired and

independent assumptions to be true and at the initial phase could
consider it comes from Gaussian under ‘Primae Facie’ and ‘Ceteris
Paribus’.

● Since we would be dealing with an unknown concept (E-Rupi), we

shall be using certain cryptocurrency (the next best alternative to digital
currency) traits to predict certain outcomes that have already taken
place in the past.

● For preprocessing the data we shall be grouping some of the

training set to be part of longitudinal data which can allow us to record
value at intervals over time which could be useful to predict when an
event can occur and the estimated impact on the parameter.
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 Which Sectors Lead India’s Rat Race

Ecommerce EdTech Social Media Content

4,55,000 CR 1,79,000 CR 71,000 CR

FinTech Hospitality & E-marketplace

mobility
3,34,000 CR 64,000 CR
1,28,000 CR

Software as a Service Food Tech CryptoExchange

1,81,000 CR 80,000 CR 8,000 CR
 How does India transact Cashless?
Number of Transactions %

NEFT
05 7%
IMPS
04 7.4%
Debit Cards
03 9.1%
Wallets and Gift Cards

02 11.1%
UPI
01
50%
 Value of Money Transacted
Cashless in India (FY20-21)
NEFT
2,51,30,910
UPI
41,03,658 Debit Cards
6,62,667
IMPS
29,41,500
Cheques, DD and others
56,27,189

RTGS
10,55,99,849
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Currencies
• What is a currency
• Evolution of currencies
• Digital currency
• Centralized & Decentralized
Digital Currencies
• National Cryptocurrencies
• Crisis Coins & Nostalgia Coins

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Macroeconomics

01 Definition
02 Macroeconomics of India
03 Goals of Macroeconomics
04 Objectives of Macroeconomics
05 Economic Indicators:
06 Macroeconomic Policies
07 India’s Macroeconomic Policies 2021

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DIGITAL CURRENCIES

• Digital Currencies and

Macroeconomics

• Reserve Bank of India (RBI) and

Digital currencies

• Examples of Voucher based

payment system like E-RUPI used
in foreign countries

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Develoment Economics

• Development Economics of India

• Import-Substitution issues

• Benefits
• A boost in the use of Digital payment methods
• Welfare benefits are delivered in an efficient and
leak-proof manner and battles corruption
• Connects welfare sponsors and beneficiaries
• Reaches unbanked population
• Vouchers that are purpose-based to drive
economic activity:

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Practical Aspects of Implementation

 Corruption

 IT Infrastructure

 Identification

 Digital Literacy

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 Public
Public
Interest Uncontrollable flow of
Interest Uncontrollable flow of
currency
Reduction in
currency
Reduction in
Cash-GDP ratio
Introduction of
Cash-GDP ratio Digital Currency in
India
Control over Monetary
Control
Policy over Monetary
Decreasing

EE FF Policy Decreasing

Facilities for Possibility of Speculative

Facilities for
Regulations
FORCE FIELD ANALYSIS Possibility of Speculative
Attacks
Regulations Attacks

Currencies Trust Issues

Competition from Private
Competition from Private
Currencies Trust Issues
Virtual Currencies
Virtual Currencies
Recommendation
Although, there are numerous risks associated with transitioning from a fiat-based
payment system to a virtual payment system, the RBI must carry the responsibility of
establishing a cashless payment system since the risk of not doing so at this time is
greater than the danger of implementing the virtual system. .

India could impose stricter rules for transactions which may push the marginal
propensity to save downwards and increase the investment decisions within the Indian
economy which could potentially help the economy’s growth and pursue stable
inflationary measures.

India could seek partnerships or global strategies with regards to the implementation
of e-rupi for example the ease to buy foreign currencies and/or digital gold which
perhaps strengthen the Indian rupee or increase the rate of interest on the sovereign
bonds india issues.

Finally, the RBI could view the opportunity in a more optimistic view such as aiming for
better control of the economy’s GDP and achieving other macroeconomic objectives.
Even though there might be a potentially dangerous view to structural flow of cash
moving towards potentially disastrous options such as the people’s perception to
‘HODL’ cash which may create illegal offshore business which will devalue the currency.
Thus RBI may need to acknowledge such risks and find ways to mitigate such disasters.