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GS3 Syllabus Topic: Indian Economy (Infrastructure)
Why in News?
Public infrastructure has been a cornerstone of human progress, but it has plagued the previous generation, making it imperative for the third type of public infrastructure called Digital Public Infrastructure (DPI), with more open and democratic principles built in it.
Context:
DPIs are digital pathways that enable a seamless provision of essential services, benefiting society. The Indian DPI ecosystem envisioned as “India Stack” has been pivotal in unlocking the power of identity, payments, and data sharing to drive economic growth and foster a more inclusive digital economy.
Each block of the Stack serves as a vehicle for financial and social inclusion across sectors, ultimately catering to our diverse population.
Its transformative ability lies in its potential to be used across multiple use cases, enabling the creation of novel solutions that drive innovation, inclusion and competition in the digital realm through its modular layers.
What is DPI?
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 to their people, empowering citizens and improving lives by enabling digital inclusion.
DPIs mediate the flow of people, money and information:
· First, the flow of people through a digital ID System.
· Second, the flow of money through a real-time fast payment system.
· And third, the flow of personal information through a consent-based data sharing system to actualize the benefits of DPIs and to empower the citizen with a real ability to control data.
These three sets become the foundation for developing an effective DPI ecosystem.
Each DPI layer fills a clear need and generates considerable value across sectors.
India, through India Stack, became the first country to develop all three foundational DPIs, Digital identity (Aadhar), Real-time fast payment (UPI) and Account Aggregator built on the Data Empowerment Protection Architecture (DEPA).
DEPA creates a digital framework that allows users to share their data on their own terms through a third-party entity, who are known as Consent Mangers.
Pillars of India’s DPI Ecosystem:
Aadhaar:
· Aadhaar is a strategic policy tool for social and financial inclusion, public sector delivery reforms, managing fiscal budgets, increasing convenience and promoting hassle-free people-centric governance.
· Aadhaar holders can voluntarily use their Aadhaar for private sector purposes, and private sector entities need not seek special permission for such usage.
Digi Yatra:
· Digi Yatra is a Biometric Enabled Seamless Travel (BEST) experience based on a Facial Recognition System (FRS).
· Air passenger traffic in India was estimated to be over 188 million in airports across India in the financial year 2022, out of whom over 22 million were international passengers.
Digi Locker:
· Digi Locker has 150 million users, six billion stored documents, and done with a tiny budget of RS 50 crore over seven years.
· The users can store their documents such as insurance, medical reports, PAN card, passport, marriage certificate, school certificate and other documents in the digital format.
UPI:
· UPI (Unified Payment Interface) has crossed eight billion transactions per month and transacts a value of USD 180 billion a month, or about a staggering 65% of India’s GDP per annum.
· UPI is currently the biggest among the National Payments Corporation of India (NPCI) operated systems including National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay etc.
How can DPI help Boost India’s Digital Infrastructure?
Independent Steward Institutions:
· A multiparty governance process through independent DPI institutions will be accountable to a broad range of stakeholders rather than be controlled by a single entity or group. This can build trust and confidence in DPI.
Global Standards:
· There is a need to develop global standards through a multilateral dialogue led by India.
· If standards originating from developed nations were transplanted to an emerging economies’ context smaller countries would simply be captive to dominant technology players.
Sustainable Financing Models:
· There is a need to develop sustainable financing models for developing DPI for the world.
· Currently backed by philanthropic funding, such models are at risk of becoming a tool of philanthropic competition and positioning.
New Playbook for Digital Infrastructure:
· The world needs a new playbook for digital infrastructure that mediates the flow of people, money and information.
· This will facilitate countries looking to digitally empower their citizens.
· They can then rapidly build platforms that address the specific needs of people, while ensuring people are able to trust and use the platform – without fear of exclusion or exploitation.
Data Protection Initiatives for Digital Public Infrastructure:
Aadhaar Act, 2016:
· The Aadhaar Act provides a legal framework for the Aadhaar program and sets out provisions for the collection, storage, and use of personal data. It also establishes the Unique Identification Authority of India (UIDAI) as the central authority responsible for managing the Aadhaar program.
Personal Data Protection Bill, 2019:
· The Personal Data Protection Bill aims to protect the privacy of personal data and establish a framework for its processing and transfer. It seeks to establish a Data Protection Authority of India to oversee and enforce data protection regulations.
National Cyber Security Policy, 2013:
· The National Cyber Security Policy provides a framework for the protection of critical information infrastructure and the prevention of cyber-attacks.
Cyber Swachhta Kendra:
· The Cyber Swachhta Kendra is a project launched by the government to secure digital devices and networks by providing free tools and security solutions.
Challenges Related to Digital Public Infrastructure India:
Political challenges:
· The development and implementation of digital public infrastructure require significant political will and support, as it often involves substantial investments of public funds. Governments may face challenges in securing the necessary resources and gaining public buy-in for such initiatives.
Funding challenges:
· The creation and maintenance of a robust digital public infrastructure require significant investment, and governments may face budget constraints in funding these projects. Additionally, financing models that support the long-term sustainability of the infrastructure may be difficult to establish.
Privacy and security challenges:
· Digital public infrastructure involves the collection, storage, and use of large amounts of sensitive data, which increases the risk of privacy and security breaches. Governments must ensure that the infrastructure is designed and implemented with strong privacy and security measures to protect citizens' information.
Digital divide challenges:
· There is a risk that digital public infrastructure could widen the digital divide, as those who do not have access to digital technologies will not be able to benefit from the services provided. Governments must ensure that the infrastructure is accessible to all citizens, including those in rural or remote areas and those with disabilities.
Legal challenges:
· The creation of digital public infrastructure may require changes to existing legal frameworks to enable the sharing of data and the provision of digital services. Governments must navigate complex legal issues such as data protection, intellectual property rights, and liability for data breaches.
Way Forward:
Strengthen Cybersecurity:
· The Government needs to invest in cybersecurity measures to protect digital systems from cyber threats. This includes developing robust security protocols and implementing regular audits to identify vulnerabilities.
· Cyber security can be strengthened by building a comprehensive legal and regulatory framework to combat cyber threats, including laws on data protection, cybercrime, and information security.
Expand Digital Infrastructure:
· To reach the maximum population, there is a need for the government to expand the digital infrastructure across the country. This includes improving internet connectivity, building data centres, and providing digital access points.
· Investing in emerging technologies, such as 5G, artificial intelligence, the Internet of Things (IoT) and, Blockchain Technology can be very much helpful for expanding digital infrastructure.
Increase Access to Digital Services:
· The government must ensure that digital services are accessible to all citizens, regardless of their socio-economic status or geographic location.
· Expanding internet connectivity to rural and remote areas using innovative technologies such as satellite broadband, Gigamesh networks.
· Creating user-friendly digital interfaces and supporting the creation of local language applications and content will increase the accessibility of digital services to non-English speaking populations so that even those with low levels of digital literacy can use them.
· Establishing community centres and digital literacy programs to educate and train people on how to use digital services.
Promote Data Protection:
· The government must enforce strict data protection regulations to protect personal information from misuse. This includes establishing clear guidelines on data usage, storage, and sharing.
· Implementation of Data protection bill to regulate the collection, storage, processing, and sharing of personal data of individuals can be very much helpful in data protection.
Encourage Digital Skills:
· The digital economy requires a workforce with the necessary digital skills. The government must promote digital literacy and provide training and upskilling opportunities to create a skilled workforce.
Improve Interoperability:
· The government must ensure that digital systems are interoperable with each other, enabling seamless integration between different digital platforms.
Foster Public-Private Partnerships:
· The government must collaborate with the private sector to drive innovation, investment, and knowledge-sharing, to develop more effective and sustainable digital public infrastructure.
Mains Question:
Q: Explain the impact of Digital Public Infrastructure on the socio-economic development in India. Discuss the steps taken by the Indian Government to accelerate digital infrastructure and to reduce digital divide in India.
{{Chandra Sir}}