India’s DPI Potential: Inclusivity, Interconnectedness and Infinite Possibilities

by Vaishali Basu Sharma - 15 April, 2024, 12:00 162 Views 0 Comment

Lately, Indian Prime Minister Narendra Modi and Microsoft co-founder Bill Gates have had several meetings and in all the focus has been on leveraging technology in areas of healthcare, education and agriculture. Gates has often praised India for its technological achievements including advancements in Digital public infrastructure (DPI). in a post on X Gates said, “During my visit to India, I saw how AI and DPI are improving access to education, healthcare, and lives of small farmers, and how these technologies can be transformative for the world.” PM Modi emphasised the importance of digital platforms in democratising access to quality healthcare, ensuring that even remote areas receive the same level of medical services as urban centres, tweeting, “From diplomacy to linguistic diversity, AI is shaping India’s global engagement.”

Both Modi and Gates in their interactions have emphasised that one of the key themes that India brings to technology is its commitment to making it accessible to everyone, particularly focusing on uplifting those who need it the most.

In a previous post, Gates had said that it was “always inspiring to meet with @narendramodi and there was a lot to discuss. We talked about AI for public good; DPI; women-led development; innovation in agriculture, health, and climate adaptation; and how we can take lessons from India to the world.”

Indeed DPI is not just about technology, it’s about transforming lives, empowering individuals, and building a resilient digital ecosystem. Countries like India are leveraging existing DPIs, building and innovating on top of those & creating a vibrant ecosystem in their country to achieve prosperity on a large scale. In India’s case, a profound economic transformation has been powered by DPIs that have facilitated the development of necessary government services and platforms.

Almost all the citizens of India have a unique 12-digit individual identification number, a digital ID providing an online authentication of identities.  Aadhaar, UPI, eKYC, and DigiLocker, the essential set of open Application Programming Interfaces (APIs), are needed to get on board into society, to open a bank account, for a mobile connection, for access to jobs, and so on. India’s ‘Digital Stack’ unlocks the economic primitives of identity, data, and payments, with a growth model which is highly inclusive. Today that digital ID system “does 80 million transactions a day, which means 80 million times some Indian is using his Aadhaar to do an online verification.” A combination of support from the government, the IT intellectual capacity and the robust startup ecosystem, has made DPI a success in India

Across various nations, the use of foundational digital public infrastructure DPI has gained momentum. India’s digital public infrastructure via the Jan Dhan-Aadhar–Mobile trinity has not just improved ease of living, ease of doing business and ease of governance, but is empowering people and transforming lives by creating a more equitable, efficient and accessible platform for all.  Mature DPIs such as Aadhaar, Unified Payments Interface (UPI), and FASTag have witnessed exponential adoption. Today India has the world’s second-largest number of mobile connections, the highest number of digital payments and conducted the fastest 5G rollout. The future offers further scalability, reaching even the most remote segments of the population.

According to Nasscom-Arthur D Little report titled, “Digital Public Infrastructure of India – Accelerating India’s Digital Inclusion” Digital Public Infrastructures (DPIs) are poised to propel India towards a $1 trillion digital economy by 2030, helping the country to become a $8 trillion economy, “Our analysis indicates that mature DPIs have generated a value of $31.8 billion, equivalent to 0.9% of India’s GDP. By 2030, this economic value is projected to increase to approximately 2.9%-4.2% of GDP, considering both direct and indirect impacts.”

As per RBI’s index that measures the adoption of online transactions, digital payments across India registered a growth of 10.94 per cent in a year through March 2023. RBI’s Digital Payments Index (RBI-DPI) stood at 418.77 at the end of September 2023 compared to 377.46 in September 2022 and 395.57 in March 2023. Speaking at the Viksit Bharat 2047 Ambassador Campus Dialogue at Pallavaram, on April 2, Finance Minister Nirmala Sitharaman lauded India’s strong digital public infrastructure stating that, “the country is becoming a hub of digital infrastructure. Digital public infrastructure has been designed in such a manner that it involves the seller, the buyer and the payment system. 43.3 crore transactions are being conducted digitally per month.”

The overarching effort visible through the government and private sector is to significantly enhance citizens’ efficiency and promote social as well as financial inclusion through DPIs.

Projects like Open Network for Digital Commerce (ONDC) and the Unified Payments Interface (UPI) are driving down the cost of business and streamlining tedious tasks. Conceptualised to break the stranglehold of e-commerce giants, ONDC, a network based on open protocol to enable local commerce across segments, has achieved significant success, and according to a McKinsey report, it will enable a five-fold rise in India’s digital consumption to $340 billion. The network has slowly expanded its footprint across both products and services and is live in various sectors like grocery, FMCG, food and beverage, ride-hailing, agriculture products, fashion and apparel, health and wellness, beauty and personal care, electronics and appliances, home and kitchen, business-to-business transactions, exports, metro ticketing and financial products. Some of the top brands, companies and platforms that have been onboarded include Ola, Spar, Wow Momo, ITC, Sleepy Owl, Hindustan Unilever Limited (HUL), McDonald’s, Marico, Biryani Blues, Leaf, Giva, Dunzo, nStore, Domino’s Pizza, Paytm, Mystore, Boat, Pincode, P&G, Magicpin, Namma Yatri, and the Kochi Open Mobility Network.

After foundational DPIs such as Aadhaar,  India is also pioneering sectoral DPIs in areas such as healthcare, governance, and insurance – that provide it with the tools needed to implement the whole-of-government approach necessary for portable social protection.

Earlier this year the government’s public policy advisory body Niti Aayog announced the creation of a digital public infrastructure (DPI) for policy and governance, called ‘Niti for States’  which will serve as a digital cross-sectoral knowledge platform, a live repository of 7,500 best practices, 5,000 policy documents, over 900 datasets, 1,400 data profiles of states, districts, broken down by demography and socioeconomic indicators, spanning 10 sectors including agriculture, education, energy, health, livelihoods and skilling, manufacturing, MSME, tourism, urban, water resources and sanitation and hygiene. Accessible online ‘Niti for States’ will enable better policymaking as a ‘one-stop shop’ for officials down to local levels to access robust, contextually relevant and actionable knowledge and insights for quality decision-making.

There is no doubt that the development of DPI in India in the last decade has steered the growth of startups in the country. DPI platforms that complement green energy are already being developed. The Unified Energy Interface (UEI) will let customers locate an EV charging station, green energy sources, and used idle batteries across the country. Space startups such as GalaxEye Space, Dhruva Space and Pixxel have called on the government to implement a DPI for earth observation-based geospatial analytics. These space startups are of the opinion that creating such DPI will open up possibilities for various applications in the commercial sector.

The G20 Global Partnership for Financial Inclusion document prepared by the World Bank has highlighted how India has achieved in just six years financial inclusion targets that would otherwise have taken at least 47 long years. The report states that  India’s DPI ecosystem has driven up the country’s financial inclusion rate from 25% in 2008 to over 80% in the last six years. The DPI network has also facilitated transfers of $361 billion directly to beneficiaries and has brought efficiency and cost savings to the private sector.

Currently the global leader in developing DPIs, the government is looking to bolster domestic businesses and spur entrepreneurship in the country through further expansion of digital payments and data-sharing infrastructures.

Vaishali Basu Sharma
Author is an analyst on Strategic and Economic Affairs. She has worked as a Consultant with the National Security Council Secretariat (NSCS) for nearly a decade. She tweets at @basu_vaishali

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