India faces global hard sell for its digital public infra
WASHINGTON: By now, the idea of digital public infrastructure (DPI) is so deeply embedded in the everyday lives of Indians, across classes, regions, linguistic backgrounds, and communities, that it is easy to forget that this is barely a decade-old innovation. It is also easy to forget the fierceness of the resistance to the project.
But the past week in Washington offered a glimpse of the debate that will have to be waged again, and won, to sell the Indian experience of DPI as a global public good, a stated Indian aim for G20. The good news is that unlike the fear of the unknown that permeated the Indian debate when few knew what the digital architecture would look like, there is today a tangible set of achievements to allay the apprehensions of the sceptics.
From addressing the World Bank-International Monetary Fund spring meetings to convincing premier think-tanks to engaging in private conversations with top American policymakers, one of the main architects of India’s digital story, Nandan Nilekani, explained what it all meant to Washington audiences.
Nilekani’s argument was straightforward. Aadhaar gave all those who lived in India digital identities. With the verification and know your customer features embedded in the digital identity, India saw an unprecedented expansion in the spread of smart phones (thanks to Jio which used the Aadhaar KYC to enroll 100 million subscribers in six months) and bank accounts (thanks to Jan Dhan Yojana, over 450 million new bank accounts have opened up since 2014). This JAM trinity, as Prime Minister Narendra Modi put it, was then used to overhaul welfare delivery with direct cash transfers for a range of initiatives, from provision of gas cylinders to rural homes and toilet construction, from support to farmers to direct income and ration assistance to the vulnerable.
But on top of the underlying architecture, new digital initiatives kept getting embedded. The Unified Payments Interface changed the nature of everyday financial transactions in India (every month, UPI sees over eight billion transactions). CoWin formed the basis of India’s successful vaccination drive. The Goods and Services Tax Network enabled a dramatic formalisation of the economy. DigiLocker provides an account to store and access documents, while account aggregator allows individuals to leverage their own data to access credit. The Open Network for Digital Commerce (ONDC) has the potential of democratising e-commerce. And this isn’t an exhaustive list of what DPI has enabled in India.
Nilekani, Aadhar’s chief architect Pramod Verma, and lawyer and privacy expert Rahul Matthan explained the underlying principles that have governed DPI. It is open, universal, accessible, low-cost and interoperable. From development agencies to the Bretton Woods institutions, there is awe and interest in this DPI model. But within the US system, there appear to be three broad sources of scepticism.
One, the US psyche is instinctively uncomfortable with the idea of the public, associating it with a statist project that stifles the private.
But Nilekani made three broad points which should dispel this. One, the Internet itself was a public project funded by the American taxpayer as a department of defence initiative. This common infrastructure, with interoperable standards and protocols, allowed private innovation to flourish. Similarly, DPI is a public architecture that provides standard interfaces and protocols, creating unprecedented room, across domains, for innovation. Two, this innovation can represent the best of market principles. It lowers entry barriers, allows competition, reduces price, encourages entrepreneurs, unleashes creativity. And finally, DPI doesn’t only empower the private sector but individuals directly, by allowing them to control their data (for instance, through consent managers in the data empowerment architecture) or leverage it for services.
The second school of sceptics are big private sector players (such as payment card networks or e-commerce giants) who fear losses if a public payments infrastructure or open commerce platform gains traction. The specific profitability of firms must not be the concern of governments. But what the private majors should remember is that DPI helps expand the market — and companies with a tech and user-friendly edge will be able to make even bigger margins as the pie increases.
And the final source of scepticism comes from those who worry about DPI encroaching on privacy and potentially becoming an instrument for human rights abuses and surveillance. While abuse can never be ruled out, this ignores the fundamental character of the project.
DPI need not be all-pervasive, all-controlling, centralised database. Instead, in India, the entire data is federated. The system is built on “optimal ignorance” and minimalism. For instance, the digital id asks for very limited information. What you use the id for is known only to the service operator you access (a bank if you are opening an account - not the rest of the system). So, instead of relying on legislation, a degree of privacy is baked into the technology itself and this can be replicated elsewhere. While India has its share of human rights issues, DPI is really not one of them — instead, it has enabled the expansion of rights.
India is already talking to African and Latin American countries about its experience, and instituting digital cross border payment networks with its neighbours. But having the US on board will help scale up DPI, create global standards, enable wider interoperability, and lend the project greater legitimacy, resources and weight. It also provides the democratic world a solid development story to offer to countries in the Indo-Pacific and beyond — a digital public good that doesn’t lead to debt traps and lock countries into cycles of dependence with predatory economic practices, but genuinely empowers citizens and respects State sovereignty. If America truly believes that India is a partner in leading the democratic tech ecosystem, Washington can take a step by embracing DPI, India’s finest innovation of this century.