Digital Public Goods: Catalysing India’s Growth Story

During the G20 Summit in New Delhi, India exhibited its soft-power diplomacy, which is no longer limited to the strength of its ancient culture, traditions and hospitality. At the Bharat Mandapam, one of the main venues in New Delhi in August, the UPI services for foreign delegates and a unique ‘Digital India’ tech experience featuring a VR cycling exhibit with digital public infrastructure (DPI) like Aadhaar, direct-benefit-transfers and DigiLocker were introduced in person.

The success of these programmes has also prompted New Delhi to create collaborations through the UN and the G20 that would certify, register, test and benchmark Indian digital public infrastructure (DPIs) and digital public goods (DPGs), which are seen as a means to expedite a nation’s inclusive economic growth.

What are DPI & DPGs

The World Economic Forum has described DPI as societal-scale digital systems with functions essential for public and private service delivery, including payment systems and data exchanges. DPIs can be enabled in largely two ways — either through DPGs or through proprietary solutions.

On the other hand, DGPs are public goods in the form of software, data sets, AI models, standards or content on free platforms that adhere to privacy and other applicable laws, standards and best practices, and do no harm. These digital resources are available to everyone and can be used and reused by anyone to create innovative solutions and new opportunities for economic growth while contributing to digital development of a nation. These can spur innovation as well as curb long-term costs.

These resources are developed by public and private organisations with the goal of making them accessible to all, which can be achieved through open licensing or public funding.

India’s Dominance

India Stack (a set of APIs that allows governments, businesses, start-ups and developers to utilise a unique digital infrastructure to solve India’s problems and to attain a presence-less, paperless, and cashless service delivery model), Aadhaar, UPI and DigiLocker, eBooks, podcast and other tech driven citizen-centric services like DIGIT and Sunbird, a set of configurable, extendable, modular building blocks that have been used in the co-creation of DIVOC, DIKSHA, SUVAAS, Amar Vash, come under DGPs.

In July 2021, Prime Minister Narendra Modi offered CoWIN, India’s technological platform developed to support its COVID-19 vaccination drive, as a DPG to the world, which facilitated delivery of 1.3 billion vaccinations in under a year across 327,000 centres. One billion vaccination certificates were issued via the CoWIN platform in India, using eGov’s open-source software package called Digital Infrastructure for Vaccination Open Credentialing (DIVOC), which enables countries to digitally orchestrate large scale vaccination and public health programmes using open source digital infrastructure. DIVOC has also been used for issuing digital vaccination certificates in Sri Lanka, and the Philippines.

Amid rapid digitisation, development and usage of public goods has grown into e-Government agenda and it has the potential to unlock economic growth and achieve the targets set out in Sustainable Development Goals (SDGs).

According to the latest Economic Survey, DPI can add nearly 60-100 basis points (BPS) to India’s potential GDP growth rate through its effective and efficient deployment across key focus sectors. It also emphasised India’s leadership in digital public goods, which is being applauded globally. In the coming months, platforms such as Open Network for Digital Commerce (ONDC) and Open Credit Enablement Network (OCEN) will open avenues for e-commerce market access and credit availability for smaller businesses and strengthen the expected economic growth in the medium term, it added

Infosys co-founder Kris Gopalakrishnan recently said that building digital public goods is the next big opportunity in India after UPI.

According to Founding Chairman of the Unique Identification Authority of India (UIDAI) Nandan Nilekani, India will witness “significant economic activity” over the next decade on the back of ONDC, record aggregating system and government measures like GST, FAStag and e-way bills.

Showing the Way

The philosophy behind creating a digital-first economy and society began with Aadhaar through which easily verifiable digital identities were issued to 1.38 billion in less than a decade. The open-source approach of DPG/DPI was then scaled to DigiLocker, digital payments (UPI) and subsidy transfer (JAM). Built by National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI), the UPI, which does 7-8 billion transactions a month, has disrupted the e-wallet business with its market share increasing from 2 per cent in 2016-17 to 52 per cent in 2021-22. It has opened access to formal credit to millions of SMEs and subsidies worth around USD 290 billion have been transferred directly into the bank account of beneficiaries creating an aggregate gain of ~USD 30 billion to the overall economy.

In August this year, UPI registered a staggering 10 billion transactions. In fact, India now accounts for nearly one out of two real-time digital transactions in the world.

In 2021, India unveiled the Account Aggregator (AA) network, a financial data-sharing system that could revolutionise investing and credit, giving millions of consumers greater access and control over their financial records and expanding the potential pool of customers for lenders and fintech companies. This system democratised lending and borrowing money with data as the collateral. Eight largest banks, including ICICI, Axis, and HDFC, also started making loans available via the account aggregator system, which has made lending faster and cheaper.

This apart, Open Credit Enablement Network (OCEN) has been launched to address the challenge of access to formal lines of credit for small and medium-sized enterprises. Also, OpenAI, ONDC have disaggregated e-commerce through an open protocol. ONDC has also teamed up with Google Cloud to increase the adoption of e-commerce in India using generative AI. They will launch a nationwide ‘Build for Bharat’ hackathon to foster an open ecosystem of developers, students, and startups to drive innovation within the ONDC framework.

The India Fiscal Information Exchange Platform (iFIX) provides real-time financial information on public spending for relevant stakeholders. Since its launch in September 2021, mGramSeva is enabling gram panchayat water and sanitation committees to manage their revenue and expenses and post this to the iFIX platform.

Challenges Ahead

Digital public goods provide a number of benefits – inclusion, efficiency, knowledge sharing, innovation and transparency, which supports accountability and security. It helps address the constraints of current copyright regimes and is flexible as well as scalable.

Digital public goods are designed to be adaptable to local needs—which can make them a sustainable tech solution in the long run and thus, cost-effective. Some scholars found that switching ed-tech solutions to open source could reduce the Indian government’s costs by USD 1.3 billion.

However, there is a need for an ecosystem in the country to attract talent and finance development and deployment of DPG/DPI for not only augmenting domestic capability but also for achieving global ambitions. Of all the registered digital public goods deployed in India only 54 per cent are indigenous. This apart, only e-Governments Foundation and iSPIRT are involved in DPGA’s core governance and roadmap shaping initiatives.

Over dependence on external entities – foreign technology companies or international organisations – can make us vulnerable. There is also the risk of external entities discontinuing services or making unilateral changes, which can affect their sustainability as was in the case of National Digital Literacy Mission (NDLM) launched in 2014 to make India a digitally literate country, which saw private sector partner Tata Consultancy Services (TCS) exit the project in 2017, leaving a huge gap in its implementation. This can threaten digital sovereignty and entrench technological power imbalances.

Besides, interoperability is crucial for seamless data exchange and collaboration between different systems. Coordination and collaboration among different organisations involved in digitisation efforts is also important to avoid duplication of efforts and fragmentation of systems.

According to a study, vendor lock-in has been one of the main barriers in achieving interoperability among different public service delivery systems. This can include being locked into long-term contracts with limited flexibility, making it difficult to switch to alternative solutions, and centralising the market around only a few companies. It is important to encourage startups and SME players in the space for sustained innovation to solve profitability, scalability and sustainability concerns.

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