Digital Public Infrastructure: The Indian Innovation That Can Change the World

Why in News?

• While highlighting the lack of digital payment systems in 133 countries around the world, the article emphasizes India's critical role as it assumes the G20 Presidency in creating digital platforms and e-governance services to digitally transform the world.

 

Background

• During the first two decades of the 21st century, Google, Amazon, Meta, Apple and Microsoft have been at the forefront of a massive explosion in innovation and value creation.
• These, along with Chinese firms Alibaba and Tencent dominated the global sphere in digital advertising, commerce, messaging, cloud infrastructure, social media and mobile operating systems etc.
• India has adopted a unique digital path trajectory, new approach in policy governance through the adoption of digital public infrastructure (DPI).

 

About Digital Public Infrastructure

• Meaning: It refers to an open-source identity platform that can be used to access a wide variety of government and private services by building applications and products.
  • It includes digital forms of ID and verification, civil registration, payment (digital transactions and money transfers), data exchange, and information systems.
  • These public digital platforms are customisable, localizable, interoperable and leverage public data for open innovation models.
  • For example, Unified Payment Interface (UPI) architecture’s interoperability is resonated in over 300 banks offering linkages to bank accounts through UPI which is accessed by consumers via 50-plus third-party apps.
• Principle: The platforms in DPI are based on core principles of consent-based data sharing protocols, openness, equity, inclusivity, fairness, transparency and trust hence reducing the digital divide.
• Significance: Because of DPI's low-cost and inclusive platforms, India has been able to push the boundary of public service delivery and digitally leapfrog, with the public sector defining regulatory limits and the private sector innovating and competing in the marketplace.
  • DPI also allows nations to retain strategic control over their digitalisation processes, ensure digital cooperation and strengthen long-term capacity.
  • A recent study by the Bank for International Settlements (BIS) has highlighted that on account of the DPI, India has delivered in 10 years what would have taken 50 years to achieve.
  • The analysis by the Centre for Digital Economy Policy Research (C-DEP) estimates that national digital ecosystems could add over 5% to India’s GDP.
• Applications: India is seen as a global trendsetter in the DPI movement, having set up following multiple large-scale DPIs in contrast to the tech innovations that earlier emerged from the developed world:
  • JAM trinity which links Aadhaar, mobiles and bank accounts
  • Digi Locker for digital storage and documents
  • Bharat Bill Pay, a one stop solution for multiple payments
  • UPI, Aadhaar Enabled Payment Systems (AePs) and Immediate Payment Service (IMPS)
  • CoWin for vaccination.

 

What led to the huge success of India’s digital platforms?

• Pradhan Mantri Jan Dhan Yojana (PMJDY): In 2015 when the scheme started only 15% of the accounts were operated by women and has jumped from 15% to 56% since its inception.
  • Also 67% of the account holders are from rural and semi-urban areas, thus bridging gender divide.
  • During the last 8 years 460 million accounts were opened and the average deposit per account has gone up by 71%.
  • This massive digital inclusion is attributed to the digital public infrastructure built by India.
• E-commerce: For instance, numerous apps like PhonePe, GPay and AmazonPay are facilitating payments with the click of a button.
  • Also, the Open Network for Digital Commerce (ONDC) is providing access and equity to small and medium-sized merchants by creating open and decentralised DPI and curbing digital monopolies.
  • It is significant as just 15,000 out of 120 million retailers are using digital commerce, while the estimated size of online shoppers is projected to be about 220 million by 2025.
  • This indicates increased choice and quality for customers, and ensuring competitiveness and efficiency across the value chain.

 

India’s DPI push in Union Budget 2022

• Health: An open platform with digital registries, a unique health identity and a robust consent framework.
• Skilling: A Digital Ecosystem for Skilling and Livelihood (DESH-Stack) to help citizens upskill through online training.
• Unified Logistics Interface Platform (ULIP): To streamline movement of goods across modes of transport and for travel.
• Mobility: An “open source” mobility stack for facilitating seamless travel of passengers.

 

What are challenges associated with Digital Public Infrastructure?

• DPI may expose citizens to risks such as privacy violations, data-driven behavioural manipulation, identity theft and fraud, and exclusion from essential public services.
• It may also create a new economic divide between countries that are leapfrogging ahead on digital public infrastructure approach versus the rest.

 

How Digital Public Infrastructure can be strengthened?

• New tools of DPI based on a whole-of-society approach: For example, the multi-stakeholder initiative GovStack develops a secure and standard-based approach to enable countries to kickstart their digital transformation journey by adopting, deploying and scaling digital government services.
• New models of digital cooperation: The joint management and maintenance of DPI by sovereign entities requires collaboration between countries on strategic decisions like choice, data portability, interoperability etc., to create and support new models for digital cooperation.
• People-centric approach: While prioritizing investments in DPI, effort should be made for inclusivity focusing on equity, good governance, and regulatory frameworks to ensure that no one is left behind.
  • A 2021 report by the Digital Public Goods Alliance outlined a vision for DPI that safeguards inclusion, trust, competition, security, and privacy, public value and private empowerment.
• Engaging local stakeholders: Such as universities and accelerators to work with government partners could help in long-term capacity investment in DPI implementation and maintenance.
• Global cooperation: In 2022, UN Development Programme, the Digital Public Goods Alliance and countries from around the world committed to sharing best practices for the implementation of DPI.

 

Conclusion

• India's G20 presidency has the potential to play a critical role in stewarding inclusive approaches to digital transformation.
• Thereby improving, securing, and broadening access to DPI through international cooperation and strengthening multilateralism to transform people's lives and the larger global good.

 

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Q1) What are digital public goods in India?

Digital public goods (DPGs) refer to new and enhanced service delivery of public goods such as healthcare, government schemes, and public infrastructure.

 

Q2. What is open network for digital commerce?

Open Network for Digital Commerce (ONDC) aims to provide open networks for all aspects of exchanging goods and services over digital or electronic networks.

 

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Source: The Indian innovation that can change the world: The model that created UPI, Bharat Bill Pay & Aadhaar-bank linkages can benefit every country