INDIA'S NEW COMMANDING HEIGHTS
The rapid proliferation of Public Digital Assets is replacing the public sector as the commanding heights of the Indian economy EPISODE #53
Dear Reader,
A very Happy Monday to you.
Last week India crossed a significant milestone in its gritty fightback against the covid-19 pandemic which originated in Wuhan, China. More than half of its eligible population is now double vaccinated. And remarkably this has been achieved using indigenously manufactured vaccines—helping India evade crippling and humiliating vaccine dependency on the Western world.
Concealed in this very significant statistic is an equally compelling story: the successful deployment of Public Digital Assets (PDA) enabling the execution of this complex jab project of unprecedented scale and that too within nine months of its roll out.
So this week I explore this phenomenon: The PDA has replaced the public sector undertakings as the commanding heights of the Indian economy as it enters a new growth phase. Leveraging this technology stack is providing India an opportunity to leap frog, especially in delivering public goods at economic costs and scale and thereby realise transformative change.
Sharing a small milestone for this newsletter too. This is the first edition in the second year of its existence. So Happy Birthday all readers😊. As I never tire of saying, this could not have been achieved without your support. Grateful as always.
The cover picture this week is from a morning shopping expedition to the fruit vendor. The ubiquitous digital wallet QR code is the perfect example to capture the PDA gains I am talking about. Do read and share your feedback.
A big shoutout to Rajit, Yugainder, Gautam, Premasundaran, Vandana and Aashish for your informed responses, appreciation and amplification for last week’s column. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
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THE NEW COMMANDING HEIGHTS
Last week India logged another milestone in its fightback against the covid-19 pandemic: Little more than half of the eligible population in the country has now been double jabbed.
Yes it is no guarantee against an extremely resilient virus with unbelievable ability to mutate and assume new and virulent versions. Nonetheless it is a very important first line of defence; the tragic experience of countries which have failed, despite a head start, to vaccinate large tracts of their population is frightening. So lack of a mitigation strategy can be devastating.
The good news is that India may have avoided—especially given that Omicron may stoke a fresh wave—the curve ball (to use a baseball analogy) by ensuring that one in two people have been fully jabbed.
Remarkable while this achievement is, it is even more gratifying to learn that the successful implementation of the One Nation, One Jab (a person could take their jab anywhere in the country) rests on the foundation of an indigenously developed technology stack. It was delivered using the Cowin platform, which employs an open architecture design ensuring efficiency, flexibility and scale to cater to the complex and diverse needs of India.
This tech stack driving the backend of Cowin has been given a moniker: public digital assets (PDAs). These PDAs are like digital building blocks and based on open source software and hence free for anyone to use.
By unpacking a solution in modular terms, a PDA operates as a plug-n-play—similar to the way Substack (which hosts this newsletter) works where I need to generate the content and then mix and match with the templates on offer to produce it in a format I like; it has unbundled the task of production of a newsletter into content and production such that anyone can use it.
And the subtext of this is that they define the new era: Open Digital Ecosystems (ODE). It allows building blocks to be mixed and matched—either by government agencies or the private sector—to create customised and innovative digital solutions at scale to resolve development challenges like inclusion, social payments and of course the successful implementation of the jab programme.
The best part of the ODE is that this is rules-based, forcing a cultural mindset reset—the signature of the new paradigm of governance that is eliminating middlemen—as a collateral gain.
And in this the most outstanding example of a PDA in contemporary Indian history is Aadhaar—the 12-digit unique identity number given to every resident of India to resolve for identity. In turn, the interoperable nature of a PDA like Aadhaar enabled it to be matched with a payments mechanism to deliver the covid-19 relief package to the bank accounts of 200 million beneficiaries.
In fact these are the very same objectives that the public sector undertakings (PSUs) were tasked to undertake when India launched its development strategy in the 1960s. They were therefore given the pride of place in the Indian economy and dubbed as the ‘commanding heights’.
It is my argument that the PDAs are the new commanding heights of the Indian economy. Imagine PDAs as free building blocks that can be used by anyone to build any project of scale. And the network or compounding effect of scale is well proven. So the potential gains from this new system are enormous.
And unlike the largely forgettable experience (barring a few exceptions like Isro) with PSUs, the PDAs are enabling India to leapfrog—especially in addressing basic development challenges like financial inclusion, targeted social expenditures, healthcare delivery and so on.
One Nation, One Jab
As a regular reader of this column you would recall how I have devoted several pieces to capture India’s steady progress in delivering the covid vaccines. In case you wish to get a quick recap please click the link below:
The lesser known fact is that the backend of this project is equally compelling. Especially since it tells us a larger story about how PDAs can be used to deliver transformative change. The beauty of these PDAs—as we have seen in the case of Aadhaar—is that they can be combined with each other as building blocks in various combinations to create solutions at scale.
In the case of the covid-19 jab this was amply demonstrated to all of us in the extremely efficient real time delivery of the digitally verifiable jab certificate with a QR code. This was made possible by another PDA called Open Saber-RC which allowed the Co-Win platform to create an electronic registry of the beneficiaries at scale.
This PDA was produced by Sunbird an entity that was created by the EkStep Foundation (co-founded by Nandan Nilekani, Rohini Nilekani and Shankar Maruwada). It allows for the creation of an electronic registry of people, entities or things, which permits registration, authentication and so on.
The Open Saber-RC was incorporated in another PDA—the Digital Infrastructure for Vaccination Open Credentialling (DIVOC). The DIVOC platform is like any other PDA modular in structure and enables:
Creation of a vaccination registry
Allow self-registry of a beneficiary
Distribute digitally verifiable jab certificates
Track performance in real time on a dashboard
So far a staggering 1.34 billion jab certificates have been issued using DIVOC. And all of this by mixing and matching PDAs.
The PDA Phenomenon
The thing is that these PDAs are rapidly permeating our lives, often without us even being aware of it.
The most high profile example of a PDA in action is of course the Unified Payments Interface (UPI) developed by the National Payments Corporation of India (NPCI). It has been combined with Aadhaar (another PDA) to create one of the most robust payment systems in the world.
You may recall I only recently dwelled in detail on this. Sharing a link below.
Similarly Aadhaar, among its many uses, has been deployed to effect one of the biggest transfers of social spending to mitigate the fallout of covid-19 on livelihoods. A collateral gain is that this targeted delivery has saved the national exchequer Rs1.7 trillion at the end of March 2020; to put it in less savoury terms this was the leakage through corruption that was prevented by ensuring a direct benefits transfer.
Then there is the Beckn Protocol which allows for the creation of an open and inclusive network of sellers and buyers to execute e-commerce orders. It will revolutionise the future of digital e-commerce, especially in breaking the stranglehold of existing platforms like Amazon.
Potentially a small or medium enterprise using Beckn can be present on a platform of their choice; similarly consumers can buy from a merchant of their choice through any application—think of it like UPI and how its interoperability enables you to pay anyone using your unique UPI identity.
Check out the short video below:
Then there is Digital Infrastructure for Governance, Impact and Transformation (DIGIT) which is looking to transform urban governance and service delivery through the use of digital building blocks.
Another example of everyday use is the FASTag. Developed by the NPCI it enables all of us to literally breeze through toll gates. The Radio Frequency Identification (RFID) technology embedded in the sticker pasted on our car’s windshield enables payment through any of the digital wallets—which again uses another PDA: UPI.
Why PDA?
I have laid out in detail as to how the PDA phenomenon is rapidly gaining ground through a range of applications. The few examples I have cited above have hopefully argued my case.
The gains can be summed up as follows:
Disintermediation: The majority of citizens in India need to interact with the government to receive their social benefits. In the post covid-19 phase this number has grown astronomically and number around 800 million. Employing the PDA has ensured the elimination of the middleman; a great example being the DBT.
Transparency: By using a PDA the government has ensured targeted delivery of services. For the first time they are actually walking their electoral promise. A collateral gain is that it overcomes trust deficit in public services.
Frictionless: It is not just the DBT example, but even in the case of either FASTag or UPI we see frictionless delivery. Not only does it improve economic efficiency it quietly reinforces the notion of the rule of the law—for most of the last 75 years India has been unfortunately governed by exception (favouring the few).
In the final analysis it is clear that we are witnessing a paradigm shift in India. Something very similar to what was observed when India embraced the public sector as the commanding heights of the Indian economy.
One of my sources of research for this week’s column was this fantastic paper penned by Anit Mukherjee and Shankar Maruwada and published by Centre for Global Development. If you wish to read it please click here.
And rightly so they should have the last word:
“The examples of India’s digital public infrastructure highlight the compounding power of the building-blocks approach to addressing development challenges. These leverage the most fundamental feature of the digital ecosystem, namely connectivity.
As data and communication networks expand in scope and scale, the building-blocks approach breaks the silos to move from analogue to digital methods of authentication, information exchange, validation and certification, to name a few. The challenge is to appropriately combine the building blocks in a way that improves developmental outcomes, such as through payments, urban governance, learning, financial inclusion, and access to health services.”
Recommended Reading
Last week Economic Times published my latest monthly column titled ‘The Death of the Wallet’. It is about how the digital payments revolution is touching us personally and forcing a mass behavioural change.
It segues well into our conversation this week on PDAs and how they are enabling transformative change in India.
Sharing a partial screenshot. If you wish to read the piece please click here.
Till we meet again next week. Stay safe.
A giant technological leap has been taken successfully but judging by the speed of change, the next big transition may not be too far away. There is always an amount of discomfort and resistance to change, especially from people who have been used to a system for decades but ultimately change usually stays. The online process for renewing driving license and vehicle insurance are some recent additions to the UPI. Today within 20 minutes one can make electronic payments for their monthly water, electricity, gas, MTNL,Tata Sky etc, bills. We have taken these conveniences for granted and have forgotten the time and energy spent for these unavoidable tasks; until of course being reminded after reading your very well composed article.
Very interesting and informative article on PDA.e governance is the way forward and India is moving in the right direction. But due to our large population and the over dependence on primary sector for employment of our labour force, we can't ignore the digital divide and lack of internet facilities in remote areas.
As a teacher ,I fully agree to your views on digital India and its benefits. Online classes are here to stay .so much we have learnt in these last two years that we can't remain ignorant and its time for all to unlearn and relearn !!! But there are many students especially the EWS category who do not have devices or internet connections. So India has to increase its speed in this direction!!!