India’s DPIs, catching the next wave

Why in News?

• The article put emphasis upon tapping the potential of India’s digital public infrastructure (DPI) fully, that could pave the way for greater economic freedom for citizens.

 

What is Digital Public Infrastructure (DPI)?

• It is an open-source identity platform that can be used to access a wide variety of government and private services by building applications and products on a set of application programming interfaces (APIs) like India Stack.
  • It includes digital forms of ID and verification, civil registration, payment (digital transactions and money transfers), data exchange, and information systems.
  • It is customisable, localisable, interoperable and leverage public data for open innovation models.
• India is seen as a global trendsetter with multiple large-scale DPIs like JAM trinity which links Aadhaar, mobiles and bank accounts, Digi Locker, Bharat Bill Pay, UPI, Aadhaar Enabled Payment Systems (AePS) and Immediate Payment Service (IMPS), CoWin (for vaccination), etc.

 

What is India Stack?

• India Stack is a set of APIs that allows governments, businesses, startups and developers to utilise a unique digital infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery.
• The following APIs are considered to be a core part of the India Stack:
  • Aadhaar Authentication and e-KYC
  • eSign, Digital Locker
  • Unified Payment Interface (UPI)
  • Digital User Consent
• It brings a paradigm shift in the way government services are delivered, i.e., in a transparent, accountable and leakage free model.

 

Aadhar as Bedrock of India’s DPI

• India’s DPI began as a foundation with Aadhaar in 2009.
• Its rebirth happened in 2014 when PM Modi envisaged a far wider and bigger canvas than what was originally envisioned, to become the rocket ship to launch good governance on.
  • Today, over 1,700 Union and States government schemes ride atop it.
• Thus, Aadhar was made a superstructure which delivers consistent, affordable, and across-the-board value to citizens, government and the corporate sector.

 

Aadhaar and its Extended Usage in the Private Sector

• The SC’s privacy judgment (in the 2017 Puttaswamy judgement) had affirmed privacy to be sacrosanct.
  • As a result, the process of making Aadhaar available to the private sector was slowed down.
• However, the rapid adoption and ease of doing business in day-to-day transactions for citizens, has now led to a gradual opening of Aadhaar, beginning with voluntary usage, for various private sector applications.  
• The Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and private sector entities also need not seek special permission for such usage.
  • However, the Aadhaar Act was amended in 2019 to bar private entities from storing individuals' data and that Unique Identification Authority of India (UIDAI) could give directions to any entity in the Aadhaar ecosystem.
• Between government departments (intra and inter-State) too, Aadhaar data can be shared, but with the prior informed consent (PIC) of the citizen.
• Banks and other regulated entities can store Aadhaar numbers as long as they protect it using vault and other similar means, as in UIDAI security regulations.
• All the above changes could lead to the next leap frogging of the India Stack as a whole.
  • It is evident as the work in progress with Aadhaar authentications being shot up to 2.2 billion per month, and cumulative number over the past 12 years has crossed 100 bn.
• Also, the Goods and Service Tax Network (GSTN) could not have happened without an existing Aadhaar number and Permanent Account Number (PAN) database.

 

The Success of DigiYatra

• DigiYatra is a Biometric Enabled Seamless Travel (BEST) experience based on a facial recognition system (FRS).
  • It is a partnership between industry and government ensuring seamless identification of passengers at key check points such as airport entry, security check and boarding gate.
• The United States CLEAR programme (an expedited airport security/airport identity verification process) is active at 51 airports with about 15 million members at a cost of $369 per annum for a family of four.
• In contrast, a slightly different variant - the DigiYatra, which is totally free of cost for the Indian traveller.
  • Its success lies in the fact that about two lakh passengers have utilized this biometric boarding system successfully.
  • Air passenger traffic in India was estimated to be over 188 million in airports across India in the financial year 2022, out of whom over 22 million were international passengers.
  • When Digi Yatra reaches a third of them, it will lead to further innovation.

 

DigiLocker: One of the Least Known DPIs

• About DigiLocker: It is a secure public cloud-based platform for storage, sharing and verification of documents & certificates
  • It has 150 million users, six billion stored documents, done with a tiny budget of ₹50 crore over seven years.
  • Plans are afoot to expand it to many countries around the world with this microscopic budget.
• Significance: Targeted at the idea of paperless governance, DigiLocker is a platform for issuance and verification of documents & certificates in a digital way, thus eliminating the use of physical documents.
  • It is also aimed at transforming India into a digitally empowered society and knowledge economy.
• Application: While applying for a passport nowadays, one need not even upload any portable document format (PDF) any more or submit some notarised papers.
  • A simple consent on the passport application form allowing it to fetch the relevant data from DigiLocker can do the meaningful task.
  • Without the DigiLocker APIs (that enable instant KYC), many insurance and fintech companies like Zerodha, Upstox, RazorPay, Equal, would not be around today.
  • Also recently, when DigiLocker was used in a Karnataka Police recruitment drive to verify the academic credentials of candidates, it led to the process being cut down by about six months.

 

UPI’s Groundbreaking Impact

• The UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank).
• The UPI is breaking records under the visionary leadership at the National Payments Corporation of India (NPCI) as evident by the following:
  • It has now crossed eight billion transactions per month and transacts a value of $180 billion a month, or about a staggering 65% of India’s GDP per annum.

 

Way Forward

• Despite India’s leapfrogging DPI, there is no single portal where industry can see all the necessary (and many unnecessary) compliances, whether at the Union or the State level.
  • Thus, an Enterprise DigiLocker can be created, which could lead to as many downloads of PAN, GSTN and the other documents as needed by multiple departments across many States.
  • This will lead to saving huge costs and headaches for businesses.
• Also, 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.

 

Conclusion

• India's DPI represents our second battle for independence, or economic liberation from the everyday duties and commerce.
• As a result, it has evolved into our new economic engine that will propel India to a $25 trillion GDP by the 100th anniversary of our political independence.

 

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Q) What is NPCI?

It serves as an umbrella body for the operation of retail payment in India. 

 

Q) What is UIDAI?

It is a statutory body created to issue Unique Identification numbers (UID), named as "Aadhaar", to all residents of India.

 

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Source: The Hindu