Ojaank IAS Academy




India’s Digital Public Infrastructure

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The digital public infrastructure (DPI) of India, also known as the India Stack and other terms, is a wonder of our time. It was created through a special collaboration between the federal and state governments, regulators, the private sector, selfless volunteers, startups, academia, and think tanks. India’s response to Web 3 is arguably even more outstanding in many aspects thanks to the effects of persistent collaborative activity at scale across so many different organisations.

As there has already been much said and published about India’s DPIs, this essay will focus on what is coming next and who is pushing it rather than repeating all that has already been said. A superstructure that consistently, affordably, and uniformly provides value to individuals, the government, and the corporate sector wherever it is imaginatively employed has been built using the foundation laid by Nandan Nilekani and R.S. Sharma’s Aadhaar, which they developed in 2009.

Aadhaar saw a rebirth in 2014 when Prime Minister Narendra Modi gave it a canvas that was far larger and bigger than what was first intended, allowing it to serve as the rocket ship from which to launch good government. Now, it supports more than 1,700 federal and state government programmes.

The Supreme Court of India’s ruling upholding the sacredness of privacy caused an unanticipated delay in Aadhaar’s opening to the commercial sector, which would have increased its worth. Aadhaar is currently gradually being made available for use in a variety of private sector applications, starting with voluntary usage, as a result of its fast acceptance and the resulting obvious convenience of conducting business in day-to-day transactions for people.

Holders of an Aadhaar may willingly utilise it for private sector activities; private sector organisations are not required to get any particular authorization for such use. Aadhaar data may also be shared inside and between States by government agencies, but only with the citizen’s prior, fully informed agreement. Aadhaar numbers can be stored by banks and other regulated organisations as long as they safeguard them using a vault or other equivalent security measures in accordance with Unique Identification Authority of India security standards. To encourage Aadhaar adoption and make it richer and more significant, a new, private sector-friendly UIDAI is moving quickly.

These three changes will lead to the next leap frogging of the India Stack as a whole, under a rare alignment of a dynamic political executive and inspired volunteers. Proof that this is work in progress is that Aadhaar authentications have shot up to 2.2 billion per month, and the cumulative number over the past 12 years has crossed 100 billion. Taking just one example, the Goods and Service Tax Network (GSTN) and then account aggregator could not have happened without an Aadhaar number and Permanent Account Number (PAN) database existing. Thus, the Lego blocks keep building one on top of the other.

Consider the new greenfield market innovations that Aadhaar may enable or help to build. With around 15 million members and a fee of $369 annually for a family of four, the United States CLEAR programme (an accelerated airport security/airport identity verification process) is now operational at 51 airports. A somewhat different variation, the DigiYatra, on the other hand, is completely cost-free for Indian travellers. Again through a collaboration between business and government, Digi Yatra is a Biometric Enabled Seamless Travel (BEST) experience that uses a facial recognition system (FRS) to guarantee seamless identification of passengers at crucial checkpoints like airport entry, security screening, and boarding gate clearance.Over two lakh passengers have successfully used this, according to the pilots. In the financial year 2022, it was projected that over 188 million people will travel by air at Indian airports, of whom over 22 million were foreign travellers. Digi Yatra will have more second order impacts and spur greater innovation as it reaches a third of them.

Consider DigiLocker, one of the lesser-known DPIs, with its 150 million users, six billion saved documents, and seven-year implementation on a meagre budget of 50 crore. With this pitiful budget, plans are afoot to spread it to several nations throughout the world. Any portable document format (PDF) uploads or notarized documents are no longer required when applying for a passport. All it takes is a simple authorization on the passport application form for it to retrieve the necessary information from DigiLocker. Without the DigiLocker APIs, many insurance and fintech companies like Zerodha, Upstox, RazorPay, Equal, and others would not exist today since Know Your Customer/Client is accomplished through them practically instantaneously.

Let’s take a look at one other indicator, the unified payment interface, or UPI, which the National Payments Corporation of India is pioneering and which is setting new records. It currently processes more than eight billion transactions each month, valued at $180 billion, or roughly 65% of India’s annual GDP. This raises the question of whether the expansion of UPI has a significant influence on GDP. Is GDP neutral, then? Does it only eliminate a portion of the current payments made through UPI transactions, in other words? Or does it allow people who have never transacted before to enter the space and enlarge the cake? On this, the verdict is yet out.

India’s DPI represents our second fight for independence in terms of economic emancipation from the daily grind of life and business, and as such, it has evolved into our new commercial backbone, propelling India to a $25 trillion GDP by the 100th anniversary of our political independence. Think about the new Cambrian explosion that will occur when ChatGPT and India Stack collide!

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