After COVID-19

Digital public goods can backstop the Indian economy

With the enlisting of powerful corporations like Walmart, Target, CVS, Walgreens and Labcorp in its efforts to fight the COVID-19 pandemic, the United States Coronavirus Task Force has sought to railroad the marketplace into serving the public interest. Walmart and Target has opened up their parking lots for Covid19 testing; CVS and Walgreens will supply testing kits and maintain a robust inventory of medical supplies; Labcorp will undertake high-throughput testing; Google has created an online platform to schedule virus testing; and drug companies BectonDickinson and Roche will develop the test kits. The US Centres for Disease Control, with its surveillance and reporting infrastructure, will be the backbone of the effort.

This is a notable departure from the “moonshot” approach to technology that America perfected during and in the aftermath of the Second World War. There will certainly be a global race to develop a Covid-19 vaccine, but it won’t emerge from a “Manhattan Project” or a DARPA-LIKE institution. In some respects, the United States is coming around to a method of technology incubation and deployment that India has perfected through the “India Stack” model. And that is to forego moonshots, and create “playgrounds”. In fact, India with its sophisticated digital identity and payments infrastructure, is in pole position to build the technology playgrounds that could limit the considerable economic fallout from the Covid-19 pandemic.

In the past, India too has attempted an all-or-nothing approach towards incubating new technologies. Many of these efforts have simply failed. In the fifties, the American pharmaceutical giant Merck approached Jawaharlal Nehru’s government to create a penicillin manufacturing plant under the aegis of a WHO initiative. As the historian Nasir Tyabji has meticulously documented, Nehru’s deep mistrust of private capital, especially from abroad, led to a breakdown of negotiations between the two parties. Instead, the government set up the Hindustan Antibiotics Ltd to manufacture generic drugs, which continues to struggle to this day. The Electronics Corporation of India Ltd’s (another national champion) quick descent into oblivion too is illustrative, to say nothing of the Defence Research and Development Organisation (DRDO).

It is easy to conceive of technology as a finished product — a single piece of equipment or technique like a vaccine, testing kit, missile, computer or app. But the reality is that many parts make up the whole, and India needs to attract all aspects of a value chain, from manufacturers of primary components to distribution networks that reach the proverbial last mile, if it is to emerge as a technology powerhouse. India may not be able to develop a Covid-19 vaccine overnight but it has already built the digital platforms that private innovators can use to offer health insurance, social security and access to credit in an economy that will be ravaged by the virus.

The US government is currently weighing the means by which it will effect a $500-billion cash transfer to Americans, especially those without bank accounts, during the pandemic. A project of this sort will not be easy, given America’s highly fragmented banking networks and regulatory system. On the other hand, India’s identification and payments infrastructure, built top-down through Aadhaar and UPI, would make a targeted cash transfer look like a walk in the park. In fact, a Universal Basic Income for citizens would be the lowest hanging fruit for the government, given the technological tools India has at its disposal.

Take lending, for instance. Soon after the Covid-19 pandemic subsides, small and medium scale enterprises and gig workers in India will need unsecured credit to kickstart or renew operations that would have been shuttered for weeks. Banks in India today have neither the appetite nor the networks to assess and monitor credit history, especially for micro-loans. The digital identity infrastructure in place — Aadhaar, EKYC and UPI — need not only be used by banks. Atop this layer, an entire ecosystem of account aggregators (who collect and become fiduciary custodians of consumer data), lending service providers (businesses that offer the loans, whether it is a traditional co-operative, or a newage business like Zomato or Uber) and underwriter modellers (technology companies that write the algorithms to determine loan eligibility based on past and estimated cash flows) can be created.

The “playground” can be built because the digital infrastructure is already in place and can easily be linked to bank accounts. The government can set the rules of the game, but like the Coronavirus Task Force, should be one of many actors in the playground. The platforms that connect banks and lenders to India Stack infrastructure, for example, should be treated as public utilities and their profits capped. The government could even create an app for lending, as with BHIM for UPI. Such a platform should not be visualised as a national champion, only as a nudge for others to join the playground. With BHIM app, the government was rightly criticised for trying to be both a player and regulator: other Upi-driven platforms like Google Tez and Phonepe have left BHIM far behind in market share, illustrating how the state just cannot keep up with the private sector in some technological aspects.

The coronavirus crisis has forced the US government to corral private health care technology into a public playground. US companies like Comcast, meanwhile, have announced that they will provide free internet connectivity to the public during this period. The spectre of a pandemic has made the American state rely on blunt instruments like the Defence Production Act to exert agency over the private sector, as it has episodically in the past. India does not have to adopt this 20th-century model — critical public goods like health care, connectivity and access to finance can be provided at scale to citizens by the private sector, as long as the government creates the enabling digital infrastructure for these respective playgrounds. Build, as the saying goes, and they will come. The author is a PHD candidate at the Fletcher School, Tufts University, and a volunteer with the non-profit think tank, ISPIRT. His book, Midnight’s Machines: A Political History of Technology in India, was recently published by Penguin Randomhouse

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