India’s Digital Public Infrastructure (DPI), broadly India Stack and many more, is a marvel of our times, a collaboration between governments (Union and States), regulators, private sector, selfless volunteers, startups and academia/think-tanks. Takes shape in unique partnerships. tank. Sustained collective action on a large scale between so many different entities is magical and the result is India’s answer to Web 3, perhaps even better in many ways.
A lot has been said and written about India’s DPI, and as such, this article does not seek to repeat them all, but rather what is coming next, and who is driving it. What began as a foundation with a base built by Nandan Nilekani and RS Sharma in 2009, has led to many more Lego blocks being placed on top of it and on its sides, to create a superstructure that is cohesive, affordable. and provides complete Board value to citizens, government and corporate sector – wherever it is imaginably used.
Aadhaar was reborn in 2014 when Prime Minister Narendra Modi gave it a far wider and bigger canvas than originally envisaged, enabling it to become a rocket ship for introducing good governance. Today, over 1,700 union and state government schemes ride on it.
base and private sector
Supreme Court of India decision Secrecy was affirmed to be sacred, and led to an unexpected slowdown in opening up Aadhaar to the private sector to unlock even more of its value. With rapid adoption and visible ease of doing business in day-to-day transactions for citizens, Aadhaar has now begun to slowly open up, with voluntary use, for various private sector applications.
Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and private sector entities are not required to seek special permission for such use. Also, Aadhaar data can be shared between government departments (intra- and inter-state), but with prior informed consent of the citizen. Banks and other regulated entities may store the Aadhaar number as long as they secure it using vaults and other similar means, as stipulated in the Unique Identification Authority of India security regulations. A new private sector-friendly UIDAI is on the way to encourage Aadhaar usage, become richer and more meaningful.
These three changes will lead to the next leap of India Stack as a whole, under a rare alignment of a dynamic political executive and motivated volunteers. Proof that it is a work in progress, Aadhaar authentication has reached 2.2 billion per month, and the cumulative number has crossed 100 billion in the last 12 years. To take just one example, the Goods and Services Tax Network (GSTN) and then the account aggregators could not have existed without the Aadhaar number and Permanent Account Number (PAN) databases. In this way, the Lego blocks keep building on top of each other.
DigiYatra and DigiLocker
Think about the kind of greenfield market innovation it could potentially create or unlock on top of the base. The United States CLEAR program (an accelerated airport security/airport identity verification process) is now active at 51 airports, with approximately 15 million members at a cost of $369 per year for a family of four. In contrast there is a slightly different version, the DigiYatra, which is completely free for Indian passengers. DigiYatra is a biometric enabled seamless travel (BEST) experience based on facial recognition system (FRS), again through a partnership between industry and government, which is being implemented at key checkpoints such as airport entry, security checks and boarding gates. but ensures seamless identification of passengers. withdrawal. Pilots have shown that about two lakh passengers have used it successfully. Air passengers in India were projected to exceed 188 million in the financial year 2022 at airports across India, of which over 22 million were international passengers. When digi travel reaches a third of them, it will lead to second-order effects and more innovation.
Take digital locker, one of the lesser known DPIs, which today has 150 million users, six billion stored documents, and was made over seven years with a small budget of ₹50 crore. Plans are on to expand it to many countries around the world and with this micro budget. When one now applies for a passport, he or she no longer needs to upload a Portable Document Format (PDF) or submit certain notarized papers. A simple consent on the passport application form does the magic to fetch the relevant data from DigiLocker. Zerodha, Upstox, Razorpay, Equal and many other insurance and fintechs would not exist today, but for the DigiLocker API, their KYC is almost instant.
Here’s another example. When DigiLocker was used to verify the educational credentials of candidates in the Karnataka Police recruitment drive, the process was cut down by about six months.
Today, it is ridiculous that there is no single portal where the industry can see all the necessary (and many unnecessary) compliances at the union or state level. If an enterprise DigiLocker can be created, it can download PAN, GSTN and other documents required by multiple departments in multiple states, thereby saving huge costs and headaches for businesses.
Impact of UPI
Let us consider only one more metric, namely Unified Payments Interface Or UPI which is breaking records under the visionary leadership at National Payments Corporation of India. It has now crossed eight billion transactions per month and handles transactions worth $180 billion per month, or a staggering 65% of India’s GDP per year. This raises the question whether the growth of the UPI significantly affects GDP. Or, is it GDP neutral? In other words, does it take up only a fraction of the existing payments through UPI transactions? Or, does it allow people who have never transacted before to come on stage and increase the size of the cake? The jury is still out on this one.
India’s DPI is a symbol of our second war for freedom – economic freedom from the day to day drudgery of life and transactions, which has made it our new business base which will give India 25 trillion dollars by the 100th year of our political independence. Moving towards dollar economy. , Imagine what a new Cambrian explosion it would be like when ChatGPT meets India Stack!
Srivatsa Krishna is an IAS officer. The views expressed are personal. @srivatskrishna