A decade ago, India's thriving local markets were teeming with people buying and selling items with well-worn banknotes. They are now equally likely to use smartphones. With only a few screen taps, millions of people in the formal and enormous informal economies can take payments, settle debts, and transfer funds anywhere in the country.
As consumers try to safeguard themselves from the virus, COVID-19 has boosted the usage of contactless digital payments for minor transactions. You can now buy as much or as little as you like using only your smartphone. This change, which has altered the norms of financial transactions, is the result of India Stack, a ground-breaking innovation that has effortlessly integrated itself into the lives of nearly 1.2 billion Indians.
However, the significance of India Stack goes much beyond mere numbers. Its impact is felt throughout the fabric of society, technology, business, and finance. In this blog, you will learn what India Stack is, and how it shaped India's digital infrastructure and its future.
India Stack: India’s Public Digital Infrastructure – What is it?
Digital Public Infrastructure (DPI) is more than just a tech jargon. It is a game-changing notion that India has championed in the world arena, most notably in G20 discussions. The Digital Economy Working Group (DEWG) of the G20 has emphasised the country's distinctive DPI projects, such as digital ID (Aadhaar) and payment infrastructure (UPI).
To begin, it is crucial to understand what DPI is and what it does. Simply put, basic DPIs act as a conduit for people, money, and information. First, people will pass through a digital ID system. Second, money flows through a real-time and quick payment mechanism. Third, the flow of personal information through consent-based data sharing. These three sets serve as the foundation for creating a functional DPI ecosystem. India became the first country to build all three core DPIs through India Stack: digital identification (Aadhaar) and real-time rapid payment (UPI).
With real-time data, DPIs enable innovative and convenient public and private services to assist in overcoming inclusion or accessibility barriers. It promotes openness and accountability. For example, the Indian government established a Biometric Attendance System for public officials in 2014. This is based on Aadhaar, the digital identity programme. It had two benefits. First, it removed ghost personnel from the government's payroll. Second, a public dashboard enables citizens to track data for every government agency in real-time. Previously, senior individuals who were eligible for a pension had to go to a government office and go through a bureaucratic process. A postal worker equipped with a portable biometric gadget can now check evidence of life at their residence. This was one of the visions of Digital India.
Reimagining existing information systems as a DPI can provide prospects for creative private services in a variety of industries. The Goods and Services Tax Network (GSTN) in India collects invoice-level data from all registered businesses in the country. The input tax credit is calculated for each invoice uploaded by the seller and accepted by the buyer. This gives an incentive for firms to deal with trustworthy suppliers who faithfully and immediately disclose their data.
What Did India Stack Bring to the Table?
DPI has the potential to enable economic transformation and inclusive growth. This section will demonstrate how India has used India Stack to stimulate innovation and competition, expand markets and narrow gaps in financial inclusion.
Further, digitalisation advances could boost India's productivity in the medium and long term, raising potential growth above pre-pandemic levels. DPI is expected to enhance GDP growth by 1-1.4 percentage points in low- and middle-income countries by 2030.
- Macroeconomic Resilience
Digitalisation, particularly DPI, can promote macro-economic resilience by strengthening and adapting the social safety net to reduce the impact of shocks on households. For example, during the early phases of the COVID-19 pandemic, India's prompt and targeted assistance provided households with a consumption floor when their labour income was drastically cut.
In general, well-targeted transfers can reduce output volatility and greatly boost well-being. Empirical evidence suggests that government transfers help cushion labour market shocks in South Africa, while mobile money allows for better risk-sharing in Kenya and Tanzania. Timely assistance could also hasten recovery from climate shocks or other natural calamities.
- Health and Education
It made a big positive impact in terms of how health and education have been delivered, therefore, it has allowed an addition of human capital in growth, hence there will be more investments made in both health and education. To unleash India’s growth potential, India must accumulate greater human capital endowment. India’s investments in digital health and education are paying off rapidly.
CoWin played a major role in the implementation of the national Covid-19 vaccination program and the subsequent unlocking of the country’s economy. Between its start in November 2019 and the end of January 2023, the National Telemedicine Service, eSanjeevani, treated over 92 million patients! During the time of COVID lockdowns, many families benefited through home delivery services from e-pharmacies. This allowed online education to continue while lockdown measures were in place and created resources for teachers and the student body to mitigate the loss of learning.
Investment
DPI is a really solid investment. The Government spent a billion plus on Aadhaar. It was because it demanded physical biometric enrollments of more than one billion citizens. Despite being open-source software and hardware, its simple design makes it one of the cheapest identity projects globally. It costs about $1 per enrolment.
What are the E-governance tools Launched by India?
The development of e-governance in India has seen quite some progress with different tools and initiatives being introduced to improve the delivery of public service as well as connect citizens to a digitally enabled environment.
The development of e-Governance in India was initiated with the commissioning of the National Satellite-based Computer Network (NICENET) in the year 1987. It was a starting point of a modernisation of the Government's operations, through tech. After this, the DISNIC (District Information System of the National Informatics Centre) project was launched. It provided free hardware & software to computerize district offices pan-India and gave an ample push to the e-Governance program.
Among the key e-governance tools and platforms launched in India are:
- Aadhaar: Aadhaar is a twelve-digit unique identifier generated and assigned by the Unique Identification Authority of India. It can be used to take advantage of numerous benefits and public services, for personal identification, which is what Aadhaar is for, and for determining one's place of residence: Aadhaar. Protean is appointed as a registrar of UIDAI to offer Aadhaar authentication for every Indian.
- myGov.in: MyGov is a national citizen engagement platform enabling citizens to participate actively in policy and governance issues. On this platform, citizens get the opportunity to interact, give suggestions, and cooperate with the government for different projects and legislative policies.
- UMANG (Unified Mobile Application for New-age Governance): UMANG is a mobile app which offers a multitude of Central and State Government services at your fingertips. Its integration with services such as Aadhaar, Digital Locker, PAN card services, and Employee Provident Fund services make it a complete package for the citizens.
- Digital Locker: Digital Locker provides an online platform for citizens to store digital copies of important documents, including mark sheets, PAN cards, Aadhaar cards, and degree certificates, as part of the Digital India initiative. It eliminates the dependency of paper-based documents and permits easy to share, and verify.
- PayGov: PayGov provides a safe and reliable method of making online payments with ease, directly into your bank account through our partnered public or private banks. It simplifies the process of paying government-related service charges.
- Mobile Seva: Mobile Seva's objective is to provide government services via mobile phones and tablets. It hosts an array of mobile solutions on the m-App Store which gives easy access to all Government Services.
- Computerisation of Land Records: With this project, land owners can ensure digital and up-to-date copies of all documents relating to their properties. It eases trading in land and simplifies paperwork.
In addition to these tools, the Tax Information Network (TIN) provides a range of services related to PAN and TAN applications, e-tax payments, and online PAN verification through Protean’s TIN-PAN website. Protean TIN-PAN also offers facilities for electronic filing of income tax returns which further enhances the digitisation of financial processes.
Protean has been at the forefront of building such Digital Public Infrastructure in India, developing population-scale technology that drives social and financial inclusion. Protean provides strong support for digital transformation, making a positive impact on society while advocating for technology that serves the greater good.
How Can DPGs Revolutionise India’s Digital Public Infrastructure?
India has proved its digital expertise by developing Digital Public Goods (DPG) such as the digital identity system "Aadhaar," as well as several DPGs built on top of Aadhaar and the "Unified Payments Interface." Aadhaar has emerged as a critical component in India's public service delivery architecture.
Way Forward
In the context of the Indian journey towards Digital Transformation and e-governance, there are some essential strives and measures which will be required to make this change encompassing and efficacious. Moving ahead involves government and regulator support, investments into an associated network infrastructure, fostering native content, and building up specific applications and services that have a goal.
- Policy and Regulatory Support:
For there to be an inclusive digital economy that safeguards peoples' rights, we have to set digitisation at the core of policymaking. This involves working on developing and implementing policy frameworks that guarantee everyone has equal access to digital services based on their socioeconomic background and regional location. Regulators must focus on promoting data security, privacy, equitable access to digital services, and ensuring user's fundamental rights are protected online.
Furthermore, promoting public-private partnerships will potentially enable leveraging resources and know-how for pushing forward the goals of digital inclusions. Successful public-private partnerships can yield practical, impactful results in bridging the digital divide.
- Investment in Digital Infrastructure
Access to the Internet comprehensively and dependably is an essential component of digital inclusion. A key priority should be increased funding for building digital infrastructure, especially in rural and isolated regions. This consists of upgrading broadband networks, improving last-mile connections, and providing affordable and reliable internet access to areas where people lack such access. This ensures equal access to digital services so every citizen regardless of location gets maximum benefit.
- Localised Content and Language Diversity
India’s language challenge — and also its potential strength — are different because of the country's linguistic heterogeneity. There needs to be a conscious effort towards promoting and distributing digital content in regional languages to tap into the linguistically heterogeneous demographic. It ensures that information, government services and digital content are usable for people with disabilities. Not only does localised content enhance comprehension, but it promotes more involvement within the digital environment too.
- Targeted Use Cases and Services:
It is important to understand the different needs of these populations and to design effective use cases tailored to them. For example, digital healthcare solutions could offer rural access to medical care, while agriculture advisory would enable the farmer to receive timely data and counsel. Online education enables students in distant regions to gain access to new learning experiences. Digital services adapted to suit the needs of these communities can greatly speed up the process of digital adoption.
Takeaway
Imagine a world where you can request a visit to your doctor or fill a prescription at the pharmacy the same way you order a meal online now. That is what India Stack did - the public digital architecture of India. In this blog, we have come across some of the ways India Stack is changing the interactions Indians have with technology and services. All the way from Aadhaar to UPI, India Stack’s vision has become a reality and is transforming peoples’ lives already. With India Stack, millions of people are now included in the digital economy, making transactions faster, safer, and more convenient.
FAQs
- What is India Stack and who owns and operates it?
India Stack consists of components that are owned and managed by separate agencies. The authority of e-authentication and e-KYC is that of India's unique ID authority. eSign is the standard specification that is being maintained by the Ministry of Communication and Information Technology. UPI is operated by NPCI (National Payment Corporation of India). RBI regulates the Account Aggregator framework, and its technical standards, and is owned by RIBT.
- What are the components of India Stack?
The India Stack consists of several major components, including Aadhaar for digital identity, UPI for quick payments, e-KYC for paperless identity verification, DigiLocker for secure document storage, and the eSign framework for electronic signatures.
- How does India Stack reduce paperwork and bureaucracy?
India Stack facilitates paperless documentation with digital signatures and enables online submission of documents, simplifying most government services and business interactions.
- How many countries accept UPI?
Countries like France, Australia, Singapore, UAE, Saudi Arabia, Oman, Nepal, Bhutan, Sri Lanka and more have already obtained the code for UPI from India.
- Story by Kakoli Laha
