India’s Digital Public Infrastructure | 16 Sep 2024

Source: IE

Why in News?

During its G20 presidency, India advanced Digital Public Infrastructure (DPI) as a pivotal tool for fostering inclusive and sustainable development through technological innovation. 

• The defining features of DPI (openness, interoperability, and scalability) highlight its significance not merely as a technological framework but as an essential enabler for enhancing public and private service delivery.

What is Digital Public Infrastructure (DPI)? 

• About:
• DPI refers to the foundational digital systems and services provided by the public sector to support and enhance the functioning of a digital economy and society. 
  • Digital Identity Systems: Platforms for verifying and managing individuals' identities online, such as Aadhaar.
  • Digital Payment Systems: Infrastructure that supports secure financial transactions, including digital wallets, payment gateways, and banking platforms. 
  • Public Digital Services: Online services provided by the government, such as e-governance portals, public health information, and digital education platforms. 
  • Data Infrastructure: Systems for storing, managing, and sharing data securely, ensuring data sovereignty and privacy, such as Digilocker. 
  • Cybersecurity Frameworks: Measures and protocols to protect digital assets and personal information from cyber threats. For examle, Information Security Management System (ISMS),
  • Broadband and Connectivity: Infrastructure ensuring widespread and equitable access to high-speed internet across regions.
• It can be broadly categorised into two groups. 
  • Foundational DPIs: The initiatives are designed to establish resilient digital frameworks, encompassing the realms of digital identity systems, payment infrastructures, and data exchange platforms.
    • Such as Aadhaar, UPI and Data Empowerment and Protection Architecture (DEPA).
  • Sectoral DPIs: These provide specialised services tailored to the needs of specific sectors.
    • Such as the Ayushman Bharat Digital Mission.
• Impact of DPIs:
  • Aadhaar-based authentication was used to facilitate the administration of over 2.2 billion Covid-19 vaccines under the CoWIN platform.
  • Over 1.3 billion Aadhaar enrolments and over 10 billion UPI transactions monthly DPIs have had a transformative impact.
  • Governance has improved in areas such as credit, e-commerce, education, health, and urban governance.

What are the Challenges Related to India’s DPI?

• Data Privacy and Security Concerns: The extensive collection and use of personal data by DPIs raise significant concerns regarding data privacy, security, and the potential misuse of sensitive information. 
• Digital Divide: Despite India's rapid digital advancement there is still limited access to digital infrastructure, including internet connectivity, smartphones, and digital literacy. 
  • As of 2024, India's internet penetration rate is expected to be 52%, which means that more than half of the country's 1.4 billion people have internet access.
• Regulatory Gaps and Fragmentation: The evolving nature of digital technologies necessitates dynamic and coherent regulatory frameworks. 
  • Existing regulatory mechanisms are inadequate for addressing emerging issues such as platform monopolies, data monopolisation, and cross-border data flows.
  • For example, the Reserve Bank of India's mandate for storing payment data locally has led to compliance complexities for international payment providers.
• Cybersecurity Threats: The increased reliance on digital infrastructure exposes India to a growing range of cybersecurity threats, including cyberattacks, ransomware, and state-sponsored hacking. Strengthening the resilience of critical DPIs against such threats is essential for safeguarding national security.
  • As of 2021, Maharashtra was the most targeted state in India — facing 42% of all ransomware attacks.
• Monopolization of Digital Infrastructure: The risk of monopolistic practices poses challenges such as profit erosion of smaller private entities due to their inability to upgrade themselves.
  • For example, the National Payments Corporation of India (NPCI) operates most of the instant payment systems.
• Sustainability of Digital Infrastructure: Maintaining the long-term sustainability of DPIs in terms of financial viability, technical upkeep, and scalability is a persistent challenge requiring continuous innovation and investment.

What Steps can be Taken to Increase the Resilience of India’s DPI?

• Strengthening Data Protection and Privacy Frameworks: Implementing a comprehensive and robust data protection law is crucial to safeguard citizens’ data and ensure privacy. 
  • This should include stringent norms for data collection, storage, and usage, along with clear guidelines on consent, accountability, and recourse mechanisms for data breaches.
• Bridging the Digital Divide: Expanding digital infrastructure is essential to ensure equitable access. This requires initiatives focused on improving digital literacy, enabling all sections of society to participate in the digital economy.
• Developing Adaptive Regulatory Mechanisms: Establishing dynamic and forward-looking regulatory frameworks is critical to address emerging challenges such as platform monopolies, data monopolisation, and cross-border data governance. 
  • These frameworks must be flexible enough to adapt to the rapid evolution of digital technologies and markets.
• Enhancing Cybersecurity Measures: Regular audits, simulations, and real-time monitoring should be institutionalised to mitigate cyber risks.
• Fostering Public-Private Partnerships (PPPs): Encouraging collaboration between the government and private sector is essential to leverage technical know-how, innovation, and resources. 
  • PPPs can accelerate the deployment of digital infrastructure, foster innovation, and address challenges in scaling up digital services.
• Need for Soft Law: While rigid legal frameworks may hinder DPI growth, soft law instruments promoting best practices (data encryption, access restrictions) could safeguard public interest.
  • Segregating aspects of DPIs under statutory, contractual, and soft law frameworks can help manage both innovation and regulation effectively.

Conclusion

India’s G20 presidency showcased the transformative potential of DPI as a key driver of inclusive and sustainable development. To further strengthen DPI resilience, India must adopt robust data protection frameworks, bridge the digital divide, develop adaptive regulations, and ensure the long-term sustainability of its digital infrastructure through continuous innovation and public-private partnerships.