Digital Public Infrastructure (DPI)

Why in the News?

The recent release of the ‘Report of India’s G20 Task Force on DPI’ highlights the growing emphasis on Digital Public Infrastructure as a crucial element for economic transformation, financial inclusion, and development. The report, published under India’s G20 Presidency, aims to advance global adoption of DPI and outline its strategic framework.

About the Report

• Establishment: The Task Force was formed in 2023 as part of India’s G20 Presidency to address priorities related to DPI and financial inclusion.
• Purpose: It seeks to support and promote the global adoption of DPI, contributing to economic transformation and enhancing financial inclusion.
• Framework: The report presents a three-part framework for advancing DPI globally, emphasizing the importance of secure, interoperable, and equitable digital systems.

What is Digital Public Infrastructure (DPI)?

DPI refers to shared digital systems that are designed to:

• Be Secure and Interoperable: Ensuring that the infrastructure can function securely across different systems and platforms.
• Use Open Standards and Specifications: Building on widely accepted standards to ensure accessibility and compatibility.
• Provide Equitable Access: Delivering public and/or private services in a way that is inclusive and accessible to all societal groups.
• Governance: Adhering to legal frameworks and enabling rules to foster development, inclusion, innovation, trust, and competition, while respecting human rights and fundamental freedoms.

What is 'Not' DPI?

• Complementary Interventions: While crucial, physical infrastructure like connectivity improvements (e.g., better mobile and internet access) is not considered DPI itself. These are supportive measures rather than the core digital systems defined as DPI.
• Digital Processes Without Innovation: Simple digitization of existing physical processes or workflows (e.g., converting paper forms into online government portals) does not constitute DPI if it does not foster broader innovation or private sector engagement.

Significance of DPI

• Economic Impact: DPI can drive significant economic transformation by improving the efficiency of public services and enabling new forms of digital commerce.
• Financial Inclusion: By providing a digital backbone for services, DPI helps in reaching underserved populations, enhancing financial inclusion and access to essential services.
• Global Development: As countries adopt DPI frameworks, they contribute to a more equitable global digital economy, fostering international collaboration and innovation.

 Accelerates Development

• Economic Growth Multiplier: DPI has a significant positive impact on economic growth. For instance, India’s implementation of DPI enabled it to achieve financial inclusion levels in under a decade that would have otherwise taken 50 years.

 Spurs Innovation

• Reduced Transaction Costs: By enabling interoperability and reducing transaction costs, DPI fosters a competitive environment that attracts private capital. PhonePe’s growth to a $12 billion valuation is a notable example of how DPI can drive innovation and market growth.

 Inclusive Development

• Access for Vulnerable Groups: DPI plays a crucial role in providing access to services for underserved groups, including remote populations, women, and SMEs. In India, the number of bank accounts tripled from 147.2 million in 2015 to 508.7 million in 2023, with 55% of these accounts held by women.

 Effective Public Service Delivery

• Cost Savings: DPI has led to substantial savings and efficiency in public service delivery. For instance, direct benefit transfers facilitated by DPI across various Central Government schemes in India resulted in $41 billion in savings.

 Resilience

• Emergency Situations: DPI proved to be resilient during crises like the COVID-19 pandemic, where digital vaccination certificates facilitated global coordination and response.

 Empowers Individuals

• Economic Mobility and Rights: DPI enhances individual empowerment by ensuring control over personal data and finances, which supports economic mobility and protection of digital rights.

 Fiscal Prudence

• Public-Private Financing: DPI projects are fiscally prudent as they often involve a blend of public and private financing, reducing the financial burden on any single sector.

 Control Over National Infrastructure

• Strategic Importance: DPI enables countries to maintain control over critical national infrastructure while benefiting from international collaboration and investment.

The emphasis on DPI reflects a global shift towards leveraging digital technologies for public good, aiming to create more inclusive and efficient systems that can adapt to evolving societal needs. The framework and recommendations from the Task Force will guide nations in developing and implementing robust digital infrastructure strategies that align with international best practices.

About India’s DPI

• India Stack: India’s foundational DPI, known as India Stack, comprises three interconnected layers:
• Identity Layer: Includes systems like Aadhar and e-KYC for identity verification.
• Payment Layer: Features UPI, Aadhar Payment Bridge, and other payment systems.
• Data Governance Layer: Incorporates DigiLocker and Account Aggregator for secure data management.

Global Efforts for DPI

• Digital Economy Working Group (DEWG): Established the first global consensus on DPI approaches, facilitating international cooperation on digital infrastructure.
• One Future Alliance: A G20 initiative aimed at building capacity and providing technical and financial support for DPI implementation in low and middle-income countries.
• Global DPI Repository (GDPIR): Launched at the G20 virtual leaders' summit in 2023, the GDPIR is focused on establishing an institution to advance DPI efforts globally. The Social Impact Fund (SIF) was also announced to support DPI implementation in global south nations.
• EU Trade and Technology Council (TTC): India and the European Union agreed to collaborate on accelerating DPI development and deployment in other countries.

Way Forward

• Three-Pillared DPI Approach: The report suggests a comprehensive three-pillar approach to DPI development, focusing on foundational infrastructure, service delivery, and governance.
• Comprehensive and Phased Approach: Recommendations include a phased approach based on in-depth global research and analysis of digital infrastructure landscapes.
• Open & Reusable Technology Frameworks: Supporting technology frameworks that are open and reusable can help countries deploy DPI while ensuring sovereignty and data ownership.
• Dialogue and Alignment: Establishing an annual DPI forum and potentially a Global South Forum to share experiences and discuss specific needs related to DPI.
• Bilateral and Multilateral Engagement: Encouraging joint efforts among countries to deploy DPI in recipient nations.
• Focused Institutions: Creating dedicated institutions to address policy dimensions, strategy formulation, and implementation with expert technical and academic support.
• Leveraging AI: Utilizing AI technologies, such as India’s Bhasini for language localization, to enhance DPI effectiveness and efficiency.