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Advocating for Financial Commitment Towards Digital Common Goods Infrastructure

Digital innovations have triggered substantial changes in India, notably the Aadhaar card system and digital payment platforms. These advancements have broadened the formal economy's scope, incorporating most informal transactions. As a result, transaction volumes have skyrocketed, with January...

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Digital innovations in India have catalyzed a profound metamorphosis. With the inception of...
Digital innovations in India have catalyzed a profound metamorphosis. With the inception of projects like Aadhaar card and digital payment systems, the informal economic sector has been integrated into the formal transaction realm. This integration is evident in the huge surge of transactions, with January 2023 alone recording a staggering eight billion transactions.

Unleashing India's Digital Revolution: The Secret Sauce Behind Economic Transformation

Advocating for Financial Commitment Towards Digital Common Goods Infrastructure

India has experienced an extraordinary metamorphosis, thanks to the introduction of cutting-edge digital technologies. Aadhaar cards, digital payment gateways, and other initiatives have revamped the economy, pulling the informal sector into the formal transactions' orbit.

In mere months, we witnessed an astounding surge in transactions. By January 2023, more than eight billion transactions with a whopping $200 billion value transacted among 300 million people and 50 million businesses. This staggering figure has nowhere been witnessed, making India a trailblazer in this department.

The driving force behind this transformation is the "Digital Public Infrastructure" (DPI), a breakthrough innovation that paves the way for effortless product and service development to benefit the masses. This success story is not just limited to India but can be effortlessly shared with the world, whether developed or developing countries.

Let's break down what DPI stands for and how it works: DPI is the connecting fabric, crafted above the physical layer (devices, servers, connections, data centers, etc.) and supporting the application layer (information kiosks, e-commerce, cash transfers, remote learning, telehealth, etc.). This infrastructure offers registries for payment infrastructure, people's IDs, and a host of services ranging from mobile services, data verifications, smart technologies, education, to health services.

Players such as governments, the public, policymakers, businesses, technological organizations, and international organizations all play pivotal roles in ensuring DPI's success. The final responsibility rests with the government, but businesses play a significant part in constructing the physical layer and providing services.

Now, let's delve into what makes an ideal DPI:

Hallmarks of an Impeccable DPI

  1. Empowering Sustainable Development Goals (SDGs): DPI bridges the gap between applications in agriculture, education, finance, healthcare, and more — effectively contributing to each SDG's achievement.
  2. Universal Access: Despite socioeconomic and geographical differences, DPI seeks to level the playing field. Internet and Wi-Fi access serve as a common platform, allowing for equal opportunities for everyone, regardless of caste, religion, or gender.
  3. Community-focused: Barriers to usage should not restrict access to DPIs or their benefits. Voice-assisted services and authentication can abolish these limitations, making DPIs accessible to all.
  4. Trust and Integrity: DPIs instill confidence in users by ensuring the system's neutrality and objectivity. Authentication, secure services, data privacy, and security keep users at ease by protecting them from misinformation and other malicious activities.
  5. Innovation and Flexibility: Once the fundamental infrastructure is in place, DPIs foster experimentation, collaboration, coding, and result in the development of new services, ultimately improving the system's efficiency.
  6. Interoperability: DPIs built on open standards can share common assets across multiple users, making it more cost-effective and resource-efficient.
  7. Resilience: The adaptability of DPIs as emergency response platforms during crises is essential.
  8. Political Viability: Funding and political support are essential to keep DPIs running smoothly, thereby requiring the involvement of influential stakeholders.

The digital infrastructure boom arose amid crippling challenges. In times of crisis, barriers are shattered, and progress can be rapid. India had no shortage of obstacles, but once the Aadhaar, UPI, DigiLocker, and CoWIN platforms took root, there was no going back.

COVID-19 accelerated the transformation, forcing governments worldwide to share vaccination status and tracking public health measures. Nandan Nilekani, the father of India's digital revolution, asserts, "DPI does not require deep pockets, it requires deep convictions."

To successfully deploy DPIs globally, donors, governments, businesses must come together with conviction and creative models, working collaboratively to unlock the immense potential of digital public infrastructure.

Unraveling the Case for Investing in Digital Public Infrastructureby Bhaskar ChakravortiHBR 2023/05

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  1. The recent surge in financial transactions in India, brought about by the Digital Public Infrastructure (DPI), has opened up various investment opportunities in the technology sector, particularly in digital payments and cryptocurrencies.
  2. As DPI continues to empower sustainable development in various sectors, such as agriculture, education, finance, and healthcare, it also presents an attractive proposition for impact investors who are interested in enabling long-term growth and reducing poverty in developing countries.

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