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7 April 2023: India’s digital public infrastructure (DPI), catching the next wave

Context: In the recent note of the IMF, it is mentioned that India’s digital public infrastructure (DPI) plays a key role in economic freedom and literacy across the nation.

Background: India’s tax agency has played a major role in promoting the adoption of the Digital Public Infrastructure (DPI) initiative, including Unique Identification Numbers for individuals, the International Monetary Fund (IMF) has said in working papers.

India’s Digital Public Infrastructure Potential

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, the 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 to explain what is happening next and who is driving it. Which was started by Nandan Nilekani and R.S. In 2009, Sharma pioneered many more Lego blocks, on top of and on its sides, to build a superstructure that provides consistent, affordable, and holistic value to citizens, government, and the corporate sector—wherever they are used imaginatively.

Aadhaar and good governance

Aadhaar was reborn in 2014 when the Prime Minister gave it a far wider and bigger canvas than originally envisaged, enabling it to become a rocket ship to usher in good governance. Today, over 1,700 union and state government schemes ride on it.

Role of Aadhaar in the Private Sector

The Supreme Court of India’s ruling affirmed privacy as sacrosanct and led to an unexpected backlash to open 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 interstate), but only with the 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 and make it richer and more meaningful.

Key to Digital Infrastructure: 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, DigiYatra, which is completely free for Indian travelers.

DigiYatra is a biometric-enabled seamless travel (BEST) experience based on the 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 2 lakh passengers have used it successfully. Air passengers in India were projected to exceed 188 million in the financial year 2022 at airports across the country, of which over 22 million were international passengers.

DigiLocker: Today it has 150 million users, six billion documents stored, and was built in seven years with a small budget of 50 crore. Plans are on to expand it to many countries around the world with this microbudget. 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 fintech companies would not exist today if not for the DigiLocker API, where their KYC is almost instant.

Role of UPI in Digital Infrastructure

Unified Payments Interface, or UPI, is breaking records under the visionary leadership of the 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 of 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?

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 and will give India 25 trillion dollars by the 100th year of our political independence. Moving toward a dollar economy. Imagine what a new Cambrian explosion it would be like when ChatGPT meets India Stack!

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