The not too long ago concluded G20 summit witnessed two vital India-led interventions. One emphasises investments in bodily infrastructure by the India-Middle East-Europe Economic Corridor (IMEC). The different emphasises investments in digital public infrastructure (DPI). While IMEC has grabbed extra eyeballs, it nonetheless appears a sketchy plan in comparison with the DPI mannequin. The DPI mannequin superior by India has already discovered takers in some components of the Global South.

Five years in the past, the International Institute of Information Technology in Bengaluru launched the Modular Open Source Identity Platform (MOSIP) to assist different nations arrange Aadhaar-like techniques. More than 10 nations, from Sri Lanka to Sierra Leone, have initiated MOSIP tasks up to now. After the G20’s endorsement, many extra might join it.

The adoption of the DPI mannequin might open up new vistas of alternatives for India’s IT sector whereas elevating the nation’s profile globally. However, the DPI momentum might be sustained provided that policymakers take note of each the strengths and weaknesses of India’s personal digital infrastructure. They should not lose sight of the chinks within the institutional structure underpinning India’s DPI mannequin. Fixing these gaps will assist Indian residents, and provide a extra sturdy mannequin for the remainder of the world.

There are three key components of India’s DPI providing which have evinced international curiosity. First, a digital ID system for residents that allows authentication of welfare beneficiaries, and helps sort out leakages. Second, an open supply software program structure that’s designed to keep away from dependence on anybody expertise big. Third, a quick cost system that may leverage the digital ID system to widen the web of monetary inclusion, and catalyse progress.

Growing fiscal issues have led many governments to contemplate extra environment friendly methods of distributing welfare advantages. Digitisation is more and more being seen as a way to avoid wasting fiscal assets whereas concentrating on state spending higher. At the identical time, digitisation has additionally raised issues concerning the dominance of American huge tech and Chinese surveillance tech. India’s providing of an open digital ecosystem faucets into these anxieties.

While the MOSIP mission is more likely to result in new enterprise for Indian software program corporations, no single agency will likely be ready to dictate phrases to any international authorities. The mission itself is being led by an instructional establishment, and never by a software program agency. India’s quick funds system is run by a not-for-profit company backed by the central financial institution. These aspects of India’s DPI mannequin have burnished its enchantment.

Nonetheless, the Indian DPI mannequin is just not with out its share of challenges. The first problem is the dearth of a strong authorized framework to guard residents’ knowledge. As a parliamentary standing committee had identified in 2010, the Aadhaar mission ought to have been began solely after a nationwide knowledge safety legislation was enacted. Yet, the mission ran for greater than a decade with none such authorized cowl.

The 2023 knowledge safety legislation affords a lot weaker knowledge safety than was envisaged by knowledgeable committees arrange earlier by the federal government. As the lawyer Apar Gupta argued in these pages, successive variations of India’s draft knowledge safety legislation have tended to dilute safety for residents whereas increasing the powers of the Indian State. A 2019 doc from MOSIP emphasised the necessity to prioritise “privacy and user control” in associate nations. But India should first practise at residence what it preaches overseas.

The second problem pertains to the coercion and exclusion concerned in India’s DPI mannequin. Aadhaar was speculated to be an enabler. Once folks begin realising its advantages, the Aadhaar consumer base would develop organically, we have been instructed throughout the early years of Aadhaar. The precise script has been very totally different.

Aadhaar morphed right into a de facto requirement for accessing any profit or service from the Indian State, and even from monetary establishments. This has damage a few of India’s most disadvantaged areas, the place knowledge connectivity stays poor and Aadhaar authentication failures are widespread.

The third problem pertains to the chance of overselling the affect of India’s DPI mannequin. While there isn’t any doubt that India’s progress on digital and monetary inclusion has been spectacular, there are a number of different nations with an much more spectacular document. An evaluation of World Bank knowledge by Suyash Rai of Carnegie India exhibits that India’s document in monetary inclusion has been middling. The progress in penetration of financial institution accounts has been exceptionally excessive lately. But so has been the share of inactive accounts.

Even within the realm of quick funds, India’s achievements should not as distinctive as authorities officers would have you ever consider. Between 2010 and 2021, roughly 50 nations have arrange quick cost techniques, a 2021 report from the Bank for International Settlements confirmed. Digital transactions in a few of these nations have grown quicker than in India. None of those nations wanted to demonetise foreign money notes to spice up digital funds.

On stability, India’s DPI mannequin stays a pretty proposition for growing nations. But if India’s “digital belt and road initiative” (as The Economist termed it) is to have a greater future than China’s Belt and Road mission, Indian policymakers should resist the temptation of untimely celebration. Instead of dismissing critics, they should have interaction with them, and tackle the chinks within the DPI mannequin. In doing so, they might be serving the pursuits of their nation and the world on the identical time.

Pramit Bhattacharya is a Chennai-based journalist. The views expressed are private