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Digital Public Infrastructure

Context

While highlighting the lack of digital payment systems in 133 countries worldwide, the article highlights India’s critical role as the G20 Presidency in developing digital platforms and e-governance services to digitally transform the world.

Relevance

GS Paper 3: Science & technology, Infrastructure 

Mains Questions

How difficult will it be to put the Digital India plan into action? As such, how do we triumph over the same? (150 words).


Background

  • Google, Amazon, Meta, Apple, and Microsoft have been at the forefront of a massive explosion in innovation and value creation during the first two decades of the twenty-first century.
  • These, along with Chinese firms Alibaba and Tencent, dominated the global sphere in digital advertising, commerce, messaging, cloud infrastructure, social media, and mobile operating systems, among others (DPI).

About DPI

  • DPI is an open-source identity platform that can be used to access a wide range of government and private services by developing applications and products.
    • It encompasses digital forms of identification and verification, civil registration, payment (including digital transactions and money transfers), data exchange, and information systems.
    • These public digital platforms are adaptable, localizable, and interoperable, and they make use of public data to support open innovation models.
    • For example, the interoperability of the Unified Payment Interface (UPI) architecture is echoed in over 300 banks offering linkages to bank accounts via UPI, which is accessed by consumers via 50-plus third-party apps.
  • Principle: The DPI platforms are founded on core principles such as consent-based data sharing protocols, openness, equity, inclusivity, fairness, transparency, and trust, all of which contribute to closing the digital divide.
  • Importance: As a result of DPI’s low-cost and inclusive platforms, India has been able to push the boundaries of public service delivery and digitally leapfrog, with the public sector defining regulatory boundaries and the private sector innovating and competing in the marketplace.
    • DPI also enables nations to maintain strategic control over their digitalization processes, as well as to ensure digital cooperation and long-term capacity.
    • According to a recent Bank for International Settlements (BIS) study, India has delivered in 10 years what would have taken 50 years to achieve without the DPI.
    • According to the Centre for Digital Economy Policy Research (C-DEP), national digital ecosystems could add more than 5% to India’s GDP.
  • Applications: In contrast to the technological innovations that previously emerged from the developed world, India is regarded as a global trendsetter in the DPI movement, having established multiple large-scale DPIs:
    • The JAM trinity, which connects Aadhaar, mobile phones, and bank accounts
    • Digi Locker for digital storage and document management
    • Bharat Bill Pay, an all-in-one payment solution
    • Unified Payment Interface (UPI), Aadhaar Enabled Payment Systems (AePs), and Immediate Payment Service (IMPS)
    • CoWin for immunisation

What factors contributed to India’s digital platforms’ enormous success?

  • PMJDY (Pradhan Mantri Jan Dhan Yojana): When the scheme first began in 2015, only 15% of the accounts were operated by women; this figure has since risen to 56%.
    • Furthermore, 67% of account holders are from rural and semi-urban areas, bridging the gender gap.
    • Over the last eight years, 460 million accounts have been opened, with the average deposit per account increasing by 71%.
    • India’s digital public infrastructure is credited with this massive digital inclusion.
  • E-commerce: For example, numerous apps such as PhonePe, GPay, and AmazonPay enable payments with the click of a button.
    • Additionally, the Open Network for Digital Commerce (ONDC) provides access and equity to small and medium-sized merchants by establishing open and decentralised DPI and limiting digital monopolies.
    • It is significant because only 15,000 of 120 million retailers use digital commerce, whereas the estimated size of online shoppers is 220 million by 2025.
    • This means more options and higher quality for customers, as well as increased competitiveness and efficiency throughout the value chain.

DPI push in India’s Union Budget 2022 (4 key announcements)

  • Health: An open platform that includes digital registries, a unique health identity, and a strong consent framework.
    • Skilling: A Digital Ecosystem for Skilling and Livelihood (DESH-Stack) is being developed to assist citizens in upskilling through online training.
    • Unified Logistics Interface Platform (ULIP): To simplify the movement of goods across modes of transportation and travel.
    • Mobility: An “open source” mobility stack for facilitating passengers’ seamless travel.
    • DPI may expose citizens to risks such as data-driven behavioural manipulation, identity theft and fraud, and exclusion from essential public services.

Challenges

It may also create a new economic divide between countries that are ahead of the rest in terms of digital public infrastructure.

DPI Enhancement Suggestions

  • New DPI tools based on a whole-of-society approach: For example, the multi-stakeholder initiative GovStack is developing a secure and standard-based approach to help countries begin their digital transformation journey by adopting, deploying, and scaling digital government services.
    • New models of digital cooperation: The joint management and maintenance of DPI by sovereign entities necessitates cross-country collaboration on strategic decisions such as choice, data portability, interoperability, and so on, in order to create and support new models of digital cooperation.
    • People-centered approach: While investing in DPI should be prioritised, efforts should be made to ensure inclusivity by focusing on equity, good governance, and regulatory frameworks to ensure that no one is left behind.
      • The Digital Public Goods Alliance outlined a vision for DPI in a 2021 report that protects inclusion, trust, competition, security, and privacy, as well as public value and private empowerment.
    • Bringing in local stakeholders, such as universities and accelerators, to collaborate with government partners may aid in long-term capacity investment in DPI implementation and maintenance.
    • Global cooperation: In 2022, the United Nations Development Programme, the Digital Public Goods Alliance, and countries around the world agreed to share best practises for DPI implementation.
    • India’s G20 presidency has the potential to play a critical role in stewarding inclusive approaches to digital transformation, improving, securing, and broadening access to DPI through international cooperation and strengthening multilateralism to transform people’s lives and the larger global good.

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