Digital Public Infrastructure (DPI): New Backbone of India’s Economy
Digital Public Infrastructure (DPI): New Backbone of India’s Economy
Central Idea
- India’s digital public infrastructure (DPI) is a unique marvel of our times that has brought together the government, regulators, private sector, volunteers, startups, and academia to create a superstructure that delivers consistent, affordable, and across-the-board value to citizens, government, and corporate sector alike.
What is India’s digital public infrastructure (DPI)
- India’s digital public infrastructure (DPI) refers to the collection of technological systems, platforms, and services that enable the Indian government, businesses, and citizens to interact digitally.
- The DPI is often referred to as the India Stack, which was built through a unique partnership between the government, regulators, the private sector, selfless volunteers, startups, and academia/think tanks.
- India Stack includes several building blocks such as Aadhaar (a biometric identification system), e-KYC (electronic know your customer), UPI (Unified Payments Interface), and DigiLocker (a cloud-based document storage system).
DPI in India
- India, the first country to develop all three foundational DPIs: 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 (Account Aggregator built on the Data Empowerment Protection Architecture or DEPA)
- Techno-legal regulatory frameworks in India: Techno-legal regulatory frameworks are used to achieve policy objectives through public-technology design.
- For example India’s DEPA offers technological tools for people to invoke the rights made available to them under applicable privacy laws. Framed differently, this techno-legal governance regime embeds data protection principles into a public technology stack.
- DPI most feasible model: 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 colonization.
Aadhaar and the private sector
- Rebirth of Aadhaar: Prime Minister Narendra Modi’s vision 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 and the private sector: After the Supreme Court affirmed privacy rights, Aadhaar is gradually being opened to the private sector. Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and regulated entities can store Aadhaar numbers using secure vaults. These changes are leading to the next leapfrogging of India Stack.
- Three changes: The next leapfrogging of the India Stack, with a dynamic political executive and inspired volunteers, will happen with three changes, voluntary usage of Aadhaar for private sector purposes, sharing of Aadhaar data between government departments, and the creation of a new private sector-friendly UIDAI.
DigiYatra and DigiLocker
- India Stack’s greenfield market innovation potential can unlock various services such as DigiYatra, which offers a free biometric-enabled seamless travel experience through facial recognition systems, and DigiLocker, which has 150 million users and six billion stored documents.
- Plans are afoot to expand DigiLocker to many countries around the world.
Facts for prelims
Initiative | Description | Launched by |
DigiLocker | Cloud-based document storage platform for citizens | Ministry of Electronics and Information Technology |
DigiYatra | Digital travel experience initiative for air travelers | Ministry of Civil Aviation |
DigiSeva | Digital service delivery platform for government services | Ministry of Electronics and Information Technology |
Digimon | A digital village initiative to provide digital infrastructure | Ministry of Electronics and Information Technology |
DigiShala | Digital classroom initiative to promote digital education | Ministry of Human Resource Development |
DigiPay | Digital payments platform for government services | National Payments Corporation of India |
DigiSaksham | Digital literacy initiative to empower citizens | Ministry of Electronics and Information Technology |
DigiDhan | Digital payments and financial inclusion initiative | Ministry of Electronics and Information Technology |
DigiSangrah | Digital repository of cultural resources for citizens | Ministry of Culture |
DigiMuseums | Digital initiative to showcase Indian museums online | Ministry of Culture |
Impact of unified payment interface (UPI)
- The unified payment interface UPI which is breaking records under the visionary leadership at the National Payments Corporation of India
- UPI has now crossed eight billion transactions per month and transacts a value of $180 billion a month, or about a staggering 65% of India’s GDP per annum.
Conclusion
- India’s Digital Public Infrastructure (DPI) can be seen as India’s second war for independence, this time for economic freedom from the daily struggles of transactions and bureaucracy. 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. With the convergence of ChatGPT and India Stack, we can only imagine the tremendous progress and innovations that could spark a new era of economic growth and development, much like the Cambrian explosion in evolutionary history.
New UPI rules for bank-to-bank payments
National Payments Corporation of India (NPCI), the retail payments and settlement body, clarified that there are no charges for bank account-to-bank account-based UPI payments, which are the “normal” UPI payments for most people.
What has changed, then?
- NPCI said that an interchange charge has been introduced for PPI (prepaid payment instrument) merchant transactions — but customers will not be charged.
- The clarification came after media reports suggested that NPCI has issued a circular saying that there will be an interchange fee of 1.1 percent on UPI transactions made through PPI instruments like wallets or cards.
- This charge will be applicable for transactions above Rs 2,000, as per the reports.
What are PPI transactions?
- Prepaid payment instruments (PPI) include online wallets (like Paytm Wallet, Amazon Pay Wallet, PhonePe Wallet, etc.) and preloaded gift cards.
- A PPI payment done via UPI refers to a transaction done via such a wallet through a UPI QR code.
What does the latest NPCI circular say?
- In a statement issued on 29 March 2023, NPCI said that as per recent regulatory guidelines, PPI wallets have been permitted to be part of the interoperable UPI ecosystem.
- The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments).
Most UPI transactions are not affected
- Generally, the preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments, which makes up for over 99.9 percent of total UPI transactions.
- These bank account-to-account transactions continue to remain free for customers and merchants.
Amendments to competition law approved
The Lok Sabha passed the Competition Amendment) Bill, 2022, more than seven months after it was introduced in the Lower House in August last year. The bill provides for the Competition Commission of India (CCI) to impose penalties on entities based on their global turnover instead of the current practice of considering only relevant market turnover.
More about the Bill
- The corporate affairs ministry has made certain amendments to the original bill.
- One of the changes is concerning the turnover that will be considered for the imposition of penalty in case of competition law violations.
- Turnover means global turnover derived from all products and services by a person or an enterprise, as per the amendments.
- Another amendment is that the CCI has to form a prima-facie opinion about a filing related to a combination within 30 days of receiving the filing.
- Currently, the regulator can form a prima-facie opinion within 30 days working days of receiving a combination filing.
- In competition law parlance, combinations refer to mergers and acquisitions, and deals beyond a certain threshold require the approval of CCI.
- The Competition (Amendment) Bill, 2022, was introduced in Parliament on 5 August last year. Then, it was referred to the Parliamentary Standing Committee on Finance chaired by Jayant Sinha.
- The panel tabled its report in Parliament on 13 December. It will be the first time since the enforcement of the Competition Act in 2009 that amendment will be made to the Act.
Flashback
- The Act was brought in 2002 and subsequently, it underwent amendments in 2007 and 2009.
- In May 2009, the anti-trust provisions of the law came into force and two years later in May 2011, CCI started screening mergers and acquisitions.
Army to Get Satellite
The Ministry of Defence (MoD) has signed three contracts worth ₹5,400 crore two with Bharat Electronics Limited (BEL) worth ₹2,400 crores for procurement of Automated Air Defence Control and Reporting System ‘Project Akashteer’for the Army and Sarang Electronic Support Measure (ESM) systems for the Navy.
More about News
- Another ₹2,963 crore contract is with NewSpace India Limited (NSIL), a Central Public Sector Enterprise under the Department of Space, for an advanced communication satellite, GSAT 7B, for the Army.
- “The geostationary satellite, being a first-of-its-kind in the five-tonne category, will be developed indigenously by the Indian Space Research Organisation (ISRO)”.
- The satellite will considerably enhance the communication capability of the Indian Army by providing mission-critical beyond-line-of-sight communication to troops and formations as well as weapon and airborne platforms.
Project Akashteer
- The contract for ‘Project Akashteer’ worth ₹1,982 crores will empower the Army’s Air Defence units with an indigenous, state-of-the-art capability, to effectively operate in an integrated manner.
- Akashteer will enable monitoring of low-level airspace over the battle areas of the Indian Army and effectively control the ground-based air defense weapon systems.
- The ₹412-crore contract for Sarang ESM systems along with the associated engineering support package from BEL, Hyderabad will generate employment of approximately two lakh man-days over a period of three years.
- ‘Sarang’ is an advanced ESM system for helicopters of the Navy, designed and developed indigenously by the Defence Electronics Research Laboratory, Hyderabad under the program, Samudrika.