Digital Public Infrastructure

• 24 Feb 2024

For Prelims: Digital Public Infrastructures (DPIs), Digital Public Infrastructure of India - Accelerating India’s Digital Inclusion, Aadhaar, UPI (Unified Payment Interface), and FASTag.

For Mains: Digital Public Infrastructures (DPIs), Challenges and Benefits of Digital Public Infrastructure.

Source: TH

Why in News?

Recently, Nasscom and Arthur D. Little have jointly released a report titled-Digital Public Infrastructure of India - Accelerating India’s Digital Inclusion, which stated that India’s Digital Public Infrastructures (DPIs) are likely to propel India towards a USD 1 trillion digital economy by 2030.

What is a DPI?

• About: 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, empowering citizens and improving lives by enabling digital inclusion.
• DPI Ecosystem: DPIs mediate the flow of people, money and information. These three sets become the foundation for developing an effective DPI ecosystem:
  • First, the flow of people through a digital ID System.
  • Second, the flow of money through a real-time fast payment system.
  • And third, the flow of personal information through a consent-based data sharing system to actualise the benefits of DPIs and to empower the citizen with a real ability to control data.
• IndiaStack: It is a set of APIs (Application programming interface) that allows governments, businesses, startups and developers to utilise an unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery.
  • India, through India Stack, became the first country to develop all three foundational DPIs, Digital identity (Aadhar), Real-time fast payment (UPI) and Account Aggregator built on the Data Empowerment Protection Architecture (DEPA).
  • DEPA creates a digital framework that allows users to share their data on their own terms through a third-party entity, who are known as Consent Managers.

What are the Key Highlights of the Report?

• Economic Impact:
  • DPIs are projected to play a significant role in propelling India towards a USD 1 trillion digital economy by 2030, helping the country to become a USD 8 trillion economy.
  • DPIs are expected to enhance citizens’ efficiency and promote social as well as financial inclusion.
• Scalability and Reach:
  • Mature DPIs like Aadhaar, UPI, and FASTag have already witnessed exponential adoption by 2022, and they are anticipated to further scale up over the next 7-8 years, reaching even the remotest segments of the population.
  • Mature DPIs have already generated a significant economic value equivalent to 0.9% of India’s GDP (Gross Domestic Product). By 2030, this value is projected to increase to ~2.9%-4.2% of GDP, considering both direct and indirect impacts.
    • The Ayushman Bharat Digital Mission (ABDM), which aims to support India’s digital health infrastructure, will drive much of the increase in value.
• Global Leadership:
  • India is currently a global leader in developing DPIs, utilising them to implement widespread adoption of digital payments, data-sharing infrastructures, and bolstering domestic businesses, spurred entrepreneurship in the country.
• Government Support and IT Ecosystem:
  • The success of DPIs is attributed to the relentless support by the government and enabled by the IT intellectual capital and startup ecosystem, creating a favourable environment for innovation and growth.
• Evolution and Superior User Experience:
  • Existing digital entities are expected to evolve to deliver superior user experiences, leveraging new age technologies such as AI, Web 3, and others.
  • Aadhaar is expected to continue to be a major contributor as its use cases expand to a broader range of services, further solidifying its role within India's digital infrastructure.
• Foundation for Digital Revolution:
  • The foundation of India's digital revolution has been strengthened by DPIs or India Stack, enhancing the country's ability to utilise digital technologies at a population scale to drive societal changes and economic growth.
  • DPIs form the cornerstone to shape the "tech-ade" and ultimately drive India's growth path, aiming for the "India@47" milestone.
• Challenges and Suggestions:
  • While DPI provides opportunities, challenges remain. These include the lack of connections between stakeholders, no real-time data, limited language options, and little reach beyond government services.
  • The governments must provide policy support and regulatory clarity, and set up task forces to drive adoption of DPI. They must also look to partner with startups and enterprises.

What are the Pillars of India’s DPI Ecosystem?

• Aadhaar:
  • Aadhaar is a strategic policy tool for social and financial inclusion, public sector delivery reforms, managing fiscal budgets, increasing convenience and promoting hassle-free people-centric governance.
  • Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and private sector entities need not seek special permission for such usage.
• DigiYatra:
  • DigiYatra is a Biometric Enabled Seamless Travel (BEST) experience based on a Facial Recognition System (FRS).
  • It envisages that travellers pass through various checkpoints at the airport through paperless and contactless processing, using facial features to establish their identity, that is linked to the boarding pass.
• DigiLocker:
  • DigiLocker has 150 million users, six billion stored documents, and done with a tiny budget of RS 50 crore over seven years.
  • The users can store their documents such as insurance, medical reports, PAN card, passport, marriage certificate, school certificate and other documents in the digital format.
• UPI:
  • Unified Payment Interface (UPI) has crossed 8 bn transactions per month and transacts a value of USD 180 billion a month.
  • UPI is currently the biggest among the National Payments Corporation of India (NPCI) operated systems including National Automated Clearing House (NACH), IMPS, AePS, Bharat Bill Payment System (BBPS), RuPay etc.

Note

• DPIs align with core UN Sustainable Development Goals by providing citizen-centric solutions.
• India's interoperable and open-source DPIs are now being adopted or considered by over 30 countries to enhance social and financial inclusion.

What are the Challenges of DPIs in India?

• Lack of Access to Infrastructure:
  • In many regions, especially rural and remote areas, there is inadequate or no access to reliable internet connectivity and digital infrastructure. Limited access to electricity and the absence of necessary digital hardware like computers and smartphones further exacerbate the problem.
• Digital Divide:
  • India faces a significant digital divide between urban and rural areas. While urban centres generally have better access to digital infrastructure and services, rural regions often lack reliable internet connectivity and face technological disparities.
• Affordability:
  • Even if digital infrastructure is available, the cost of internet access and digital devices can be prohibitive for many individuals and families, particularly in low-income communities.
• Language and Content Barriers:
  • The dominance of content in a few major languages can exclude non-English speakers or those who are not proficient in the predominant language. The lack of localised and relevant content can hinder access to vital information and services.
• Physical and Cognitive Disabilities:
  • Persons with disabilities often face challenges in accessing and using digital technologies due to limited accessibility features and design considerations in digital platforms.
• Privacy and Security Concerns:
  • Fear of privacy breaches and data security issues can deter individuals from embracing digital technologies, especially when it comes to sensitive personal information.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Q. Consider the following statements: (2018)

1. Aadhaar card can be used as a proof of citizenship or domicile.
2. Once issued, Aadhaar number cannot be deactivated or omitted by the Issuing Authority.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Ans: (d)