India's DPI goes global: Earlier known as the India Stack, the successful roll-out of the country's Digital Public Infrastructure, showcased during India's presidency of the G20, is being looked upon as a template for other countries to follow.
WHAT IS DIGITAL PUBLIC INFRASTRUCTURE(DPI)?
Digital public infrastructure (DPI) refers to blocks or platforms such as digital identification, payment infrastructure, and data exchange solutions that help countries deliver essential services to their people.
India’s unique DPI initiatives, include digital ID (Aadhaar) and Unified payment infrastructure (UPI), as highlighted in the meetings of the G20 Digital Economy Working Group (DEWG).
Three Pillars of DPI- DPI has 3 broad objectives- identity, payments, and data management. India, through its India Stack Platform, has become the first country to develop all three foundational pillars of DPI.
DPI objective
DPI Pillar
India’s DPI Pillars name
Identity
Digital ID System
Aadhar
Payment
Real-time fast payment system
UPI
Data Management
Consent-based data-sharing system
Data Empowerment Protection Architecture (DEPA)
Use of DPI Architecture in Government Initiatives
BENEFITS OF DIGITAL PUBLIC INFRASTRUCTURE (DPI):
Financial inclusion:
The adoption of Aadhaar and digital payment solutions has boosted financial inclusion. Aadhar-based e-KYC simplifies the process for accessing financial services.
Ex: Banks that use e-KYC lowered their cost of compliance from Rs 1,000 to Rs 5. The decrease in costs made lower-income clients more attractive to service and generated profits to develop new products.
Improved efficiency:
Aadhaar, helped facilitate the transfer of social safety net payments directly from the government treasury’s accounts to beneficiaries’ bank accounts, helping to reduce leakages, curb corruption and providing a tool to effectively reach households to increase coverage.
Ex: Government of India estimates that up to March 2021, the government saved about 1.1 percent of GDP due to the DBT and other governance reforms.
Formalization of the economy:
Digitalization has supported the formalisation of the economy, with around 8.8 million new taxpayers registered for the GST between July 2017 and March 2022, contributing to buoyant government revenues in recent years.
Better delivery of health and education services:
Digitalization enabled better delivery of health and education services.
Ex: CoWin helped manage the COVID-19 vaccination campaign and contributed to the reopening of the economy.
Also, DIKSHA allowed instruction to move online during COVID-related lockdowns and provided resources for teachers and students to mitigate learning losses (World Bank, 2020).
CHALLENGES:
Digital divide:
The digital divide appears along gender, geographic and income lines.
Ex: A mere 14.9 percent of rural households have internet access, compared to 42 percent among urban households.
Also, while 43.5 percent of urban men know how to use the internet, only 30.1 percent of urban women and 8.5 percent of rural women do.
Low digital literacy:
Despite significant progress, digital literacy remains low in India, and represents a barrier to engaging with DPI-based solutions.
Ex: While there has been an exponential increase in UPI-based payments, only 35 percent of persons aged 15 and over have made or received a digital payment.(IMF eLibrary)
Data Protection:
There is an increased risk of privacy and security breaches as the DPI requires the collection, storage, and use of large amounts of sensitive and personal data.
Ex: It has been reported that more than 80 million Indian users were affected by data breaches in 2021 (Business Today, 2021).
Exclusion errors:
Initial experiences with Aadhaar showed that exclusion errors occurred because of fingerprint recognition problems and limited internet connectivity.
Ex: Kattupaniya tribe recently denied PDS facilities due to failure in Aadhar biometric authentication.
Inadequate digital infrastructure:
India’s digital infrastructure is comprehensively inadequate to accommodate the growing increase in digital transactions. One of the major challenges faced by DPI is slow and delayed infrastructure development.
Ex:Only around 25% of Towers in India are connected with fibre networks, whereas in developed nations, it is in excess of 70%.
Interoperability:
Interoperability is crucial in DPI. Seamless interoperability across systems, however, requires harmonization of legal and technological frameworks, which is complex and time-consuming.
GOVT. MEASURES
Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA): Aims to digitally literate 6 crore rural households, making them capable of operating digital devices like smartphones and computers.
Digital India: Launched to transform India into a digitally empowered society and knowledge economy, focusing on providing digital access to every citizen.
BharatNet Project: Envisions providing high-speed digital connectivity (broadband) to all the gram panchayats in the country, promoting rural internet access.
Production Linked Incentive (PLI) for Telecom and Networking Products: Encourages domestic production of telecom and networking products, aiming to make India a global manufacturing hub.
Comprehensive Telecom Development Plan for North-Eastern Region: Focuses on expanding telecom services and infrastructure in India's North-Eastern states, enhancing connectivity in this region.
WAY FORWARD:
Robust data protection framework:
Case study: The EU's data protection framework, the GDPR empowers EU citizens by enforcing organizational transparency in data handling, ensuring privacy and lawful data use. It grants rights to access, correct, delete, or object to data processing, returning control to individuals.
For India, Future-ready legal frameworks like the Digital India Act 2023 need to be implemented in letter and spirit.
Address limits of the system:
It is important to address the limits of the system to help prevent the exclusion of genuine beneficiaries and to improve the efficiency of services.
It is crucial to establish appropriate digital network such as power, internet and mobile connectivity, correct Aadhaar linking and alternative methods of verification (such as passwords) when biometric verifications fail.
Improve digital literacy:
The government needs to take steps to improve digital literacy among citizens to enable them to fully utilize the opportunities provided by DPI.
Socio economic data:
The DBT currently does not have access to socio-economic data and is not able to target households based on these data.
The unique Aadhaar identifier could enable easier data exchange between various scheme holders. The availability of socio-economic data is key to reach intended beneficiaries.
India's Digital Public Infrastructure, a global model after its G20 showcase, offers transformative potential in service delivery but faces challenges in digital literacy and infrastructure. Its success and adaptability underscore the need for robust data protection and inclusivity to maximize benefits and mitigate risks.
PRACTICE QUESTION
Q. "There is more to be tapped in the country’s digital public infrastructure (DPI)". Discuss the benefits associated with the DPI and analyse the challenges associated with it.(15marks, 250words)
