| Introduction: Contextual introduction. Body: Explain significance and potential of India’s Digital Public Infrastructure (DPI). Conclusion: Write a way forward. |
Digital public infrastructure (DPI) refers to blocks or platforms such as digital identification, payment infrastructure and data exchange solutions that help countries deliver essential services. India through India Stack became the first country to develop all three foundational DPIs digital identity (Aadhar), real-time fast payment (UPI) and a platform to safely share personal data without compromising privacy.
Significance of India’s DPI:
- DPI has emerged as the most feasible model due to its low cost, interoperability and scalable design, and because of its safeguards against monopolies and digital colonisation.
- It enabled Aadhaar to become the rocket ship for launching good governance in India. Currently, over 1,700 Union and State government schemes use Aadhaar.
- Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and regulated entities can store Aadhaar numbers using secure vaults.
- UPI has now transacts a value of $180 billion a month, or about a staggering 65% of India’s GDP per annum. This is greater than the combined digital payments volumes of the US, UK, Germany and France and equals 55 per cent of India’s GDP.
- India kicked off its first cross-border real-time payment system by integrating UPI with Singapore’s PayNow to enable low-cost cross-border payments.
- e-RUPI, E-Way Bill, and TReDS for MSMEs have ensured real value for money to consumers while reducing the compliance burden for producers.
Potential of India’s DPI:
- It can unlock various services such as DigiYatra, which offers a free biometric-enabled seamless travel experience through facial recognition systems, and DigiLocker, which has six billion stored documents.
- India’s DPI is fuelling its thriving start-up ecosystem. Start-ups have leveraged open networks for consent-based verification of identity (Aadhaar), settlement of payments United Payments Interface (UPI), sharing of financial data.
- UPI has been a major tailwind for tech innovation and investment into India.
- UPI is already in use or running pilots in 12+ other nations, and multiple other countries have expressed interest in the various APIs of India Stack. This opens a USD 500 billion global cross-border payments market, for any Indian companies building financial services on top of these rails.
- India’s DPI can add around 60-100 basis points (BPS) to India’s potential GDP growth rate.
- The platforms will democratise digital payments, enable interoperability, and bring down transaction costs. This could potentially transform how businesses and consumers interact at present.
DPI has emerged as the new backbone of India’s economy, propelling it towards the goal of achieving a $25 trillion economy by the 100th year of India’s political independence.
