DIGITAL PUBLIC INFRASTRUCTURE (DPI) AND INDIA STACK

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Context

• Shanghai Cooperation Organization (SCO) members, including China and Pakistan, have unanimously adopted India's proposal for the development of Digital Public Infrastructure (DPI).

About

• DPI refers to digital solutions that enable basic functions essential for public and private service delivery, i.e. collaboration, commerce, and governance.
• Typical examples include digital identification platforms such as Aadhaar in India, data exchange streams such as X-road in Estonia, or digital payment systems such as UPI in India and Raast in Pakistan.

The components of DPI

The set of capabilities that enable participation in society is constantly evolving, but over the past two decades, several countries have converged on three capabilities that they manage as digital public infrastructure, specifically the ability to:

• Digitally verify identities
• Securely send or receive money
• Safely exchange personal information

India Stack

• India’s DPI, known as the “India Stack” is a set of APIs that allows the government and private companies to deploy cashless and paperless technology products.
• These APIs are maintained independently by their owners but the India Stack drives adoption by developers through their events.

• The four major layers of India Stack include the Consent Layer, Cashless Layer, Paperless Layer and Presence-less Layer. This can be explained in a nutshell as follows:

1. 1. Consent Layer:This layer is a modern privacy data-sharing framework with an open personal data store and is owned by the Reserve Bank of India.
      
      
   2. Cashless Layer:This is an electronic interoperable payment network and includes IMPS, AEPS, APB and UPI and is owned by the National Payments Corporation of India (NPCI).
      
      
   3. Paperless Layer:This can easily store and retrieve information digitally. It includes Aadhaar e-KYC, e-Sign, and the Digital Locker. This paperless layer is owned by the Department of Electronics and Information Technology
   4. Presence-less Layer:This is a unique digital biometric identity with open API access. This layer includes the Aadhaar card and Mobile Aadhaar and is owned by the Unique Identification Authority of India.

Key Parts of India Stack

• Now we will list out the key parts that consist of India Stack and it will play a larger role in our day to day lives.

Unique Identification Number

• The India Stack or Aadhaar Stack is made up of the UIDAI. This is the Unique Identification Number which is linked to the biometric readings of the individual.

e-KYC

• In order to receive industry feedback, Aadhaar was added as an e-KYC project. This enables organizations to get instant verification of customers. Some of the details that are provided include the place of residence and the date of birth of the individual.

AEPS

• The NPCI developed the Aadhaar Enabled Payments Systems or AEPS. Using AEPS, this improves financial inclusion for retail outlets that can go cashless and allows for disbursement of government entitlements and bank to bank transfers.

UPI

• The Unified Payment Interface or UPI enables a payment request and customer to send funds to a beneficiary and collect requests from a customer for payment. The best part is that it allows India to trade and transact digitally.

eSign

• design is enabled through an API that facilitates an Aadhaar cardholder to electronically sign documents.
• This is authenticated through biometric readings and through an OTP. This reduces paperwork with the authentication process and provides legal validity with this signing mechanism.
• All eSigns are managed by the Controller of Certifying Authorities which is a part of the Ministry of Electronics and Information Technology.

DigiLocker

• Another great feature is a DigiLocker that is used as a Government of India repository for documents.
• Also, users can sign up for services by linking their Aadhaar cards and similarly it can be used to upload documents, eSign these documents and share the documents at any time, from anywhere.

Digital Signature

• The second component, apart from the DigiLocker of the Paperless Layer, is the Digital Signature.
• This provides the capability that allows individuals to electronically sign contracts with any entity without a pen or paper.

Benefits Of Digital Public Infrastructure

• Financial inclusion
• Improved efficiency
• DPI is a cost-effective investment.
• Formalization of the economy:
• Better delivery of health and education services:

Moving Ahead

• India Stackspresents the opportunity for private players to enable disruption. This is done by taking down the cost of customer acquisition and ongoing maintenance. This enables businesses to tap into the customer segment which is currently out of reach.
• This would enable even the street vendor that does not have a bank account to make all their transactions digital and uses this information to grow their businesses and invest in savings. In the long run, India Stack will build a digital portal to the entire financial world.

Closing Remarks

• Understanding and designing reliable digital public infrastructure (DPI) is key to ensuring governments meet their development goals, transforming the ways we connect and work, while also helping society weather major global challenges, like the COVID-19 pandemic.
• India is a current global leader in developing DPI, using it to implement widespread adoption of digital payments, data-sharing infrastructures, and growing its e-commerce sector. These innovations have in turn bolstered domestic businesses and spurred entrepreneurship.
• If implemented correctly, DPI has the potential to catalyze innovation and unlock market bottlenecks in all regions of the world–but the conversation must be broadened.

https://www.ndtv.com/business/sco-member-states-unanimously-adopt-indias-proposal-on-digital-public-infra-vaishnaw-4031914