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India’s ‘World-Class Digital Public Infrastructure’ Highlights Lesson For Other Countries: IMF

According to a working paper by the IMF, a fundamental building blocks approach directs India’s growth.

The International Monetary Fund has stated in a working paper that India’s experience in creating a “world-class digital public infrastructure” emphasises the lesson for other nations that are starting their own digital transformation.

According to the working paper “Stacking up the Benefits Lessons from India’s Digital Journey,” the development of India’s stack is influenced by an emphasis on supporting innovation across the ecosystem and a foundational building blocks strategy.

Using the building block method, a group of issues are broken down into their component parts, and a minimal common core is found.

The paper asserts that a building block strategy gives those who are closest to the issue the fundamental resources they need to develop customised solutions in a diverse nation like India. Supporting a thriving ecosystem entails the need for competition-focused design and interoperability between the various digital public infrastructures (DPIs). Interoperability in India was enabled by open standards, enabling anyone to make use of the features offered by India Stack.

The CoWIN vaccine distribution platform and other DPIs in education and health, such as the Covid-19 vaccine, are all based on these concepts, according to the paper.

“India was able to scale its vaccine delivery rapidly and overcome obstacles like massive internal migration by using a digital backbone. To support their immunisation initiatives, CoWIN’s technology has been implemented in Indonesia, the Philippines, Sri Lanka, and Jamaica, according to the paper.

The value of information technology (IT) in the creation of the identification layer has also been acknowledged by India. Prior to the introduction of the Aadhar card, India already had a number of identification cards and databases (such as PAN tax IDs and ration cards), but none offered universal coverage, the promise of uniqueness, or the capacity to support a population of over a billion people.

Everyone knew that using technology to create an identity system with scale, uniqueness, and robustness at a reasonable expense would be essential. The appointment of a successful IT entrepreneur as UIDAI’s founding chairman, which signalled the government’s dedication to using technology to address the policy issue, allowed UIDAI to recruit better and more qualified personnel for the job.

Important lessons for the implementation of Aadhaar were learned from the trials and tribulations of the tax ID launch. (e.g., utilizing a novel PPP to speed up enrollments).

Using a common core as a starting point, the digital building block method separates the components of a solution to a set of issues.

For instance, in the India Stack, UPI and Aadhaar both remove payment addresses from payments and identity from entitlements, respectively. (Mukherjee and Maruwada, 2021).

“This modular strategy encourages innovation by enabling each building block to address a variety of issues, including use cases that the original developer did not foresee. Each component can be applied at the population level when the problem’s centre is the focus, the statement continued.

“A building block approach gives those who are closer to the issue the fundamental tools to develop tailored solutions in a large and diverse country like India. In the case of Aadhaar, the unbundling and the limited data gathered (name, age, gender, location, and biometrics) allowed for its rapid and widespread rollout. When these IDs communicate an entitlement, like citizenship, other nations, in contrast, have experienced difficulties with their digital ID rollout, the statement continued.

Supporting a thriving ecosystem entails the need for interoperability and a design that prioritises competition. Anyone can use the features offered by India Stack because interoperability for India was enabled by open standards. This improves interoperability while also lowering costs, fostering competition, giving the chance to customise solutions to the local context, and improving flexibility to adjust to changing requirements.

India Stack is designed with special attention paid to fostering rivalry and dismantling silos. For instance, UPI avoided current obstacles and powerful interests. Strong stakeholder engagement helped the ecosystem grow and allowed for the delivery of user-centric solutions that were appropriate for the situation.

According to a post from Luis E. Breuer, Senior Resident Representative of the IMF in India, India’s digital public infrastructure is changing people’s lives.

“India has created a top-notch digital public infrastructure that can serve as an example for other nations. According to the most recent study from @IMFnews, it is changing both the economy and peoples’ lives, he said.

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