SYLLABUS

GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

GS-3: Inclusive growth and issues arising from it 

Context: Recently, IIM Bangalore and Protean release the inaugural ‘State of Digital Public Infrastructure in India’ report, mapping India’s DPI 2.0 future.

Key Highlights of the Report

• India’s “middle path” approach: The open and trusted public infrastructure enables private innovation at scale while maintaining inclusion, trust, and national priorities.

• Interoperability: The strength of India’s DPI lies not only in its scale but in its interoperability, a principle that allowed UPI, Aadhaar, and the Unified Health Interface to cut across bank systems, states, and departments. 

• Growing Use of Digital Payments and Data Sharing:  

• The Unified Payments Interface (UPI) managed nearly half (49%) of global instant payments and processed about ₹200 lakh crore in the financial year 2023-24.
• The Account Aggregator system, which lets users share financial data safely, has exceeded 2.2 billion consents, with over 112 million people linking their accounts.

• Digital IDs and Public Services: Aadhaar-based identity systems have made public services more efficient. For example, Direct Benefit Transfers (DBT) are now done for 328 schemes across 56 government ministries, improving transparency and reaching more people.

• Progress in Digital Healthcare: Healthcare is advancing, though slowly. Programs like the Ayushman Bharat Digital Mission (ABDM) issuing health IDs (ABHA IDs) and telemedicine services like e-Sanjeevani are helping in bring healthcare online and closer to people.

Challenges Highlighted in the Report

• Uneven maturity of DPI across sectors: While financial DPI has achieved near-universal penetration, digital skilling, health records, education platforms, and municipal services show wide regional disparities. 

• Incentives & Institutional Motivation Gaps: Many potential stakeholders lack sufficient incentives to integrate with DPI platforms, hurting ecosystem growth.

• Poor DPI Adoption: Several states continue to lag in onboarding government departments to digital workflows, resulting in fragmented user experiences and delays in service delivery. 

• Risk of Market Concentration & Private Dominance: DPI allows private players to build services on shared public platforms, but this also raises the risk of a few firms gaining excessive dominance, which can restrict competition and innovation.

Way Ahead 

• Healthcare and some other sectors are still in early implementation stages and need better system integration, more provider involvement, and stronger incentives for growth.

• The report underscores the need for strong governance, privacy safeguards, and data protection, noting that the DPDP Act and DEPA will be crucial for enabling secure, user-friendly, and consent-based data sharing.

• There is urgent need for robust techno-legal regulatory frameworks to ensure DPI remains citizen-centric, transparent, accountable, and safe from misuse.

• For policymakers, the study provides a roadmap for what it calls “DPI 2.0,” a shift from infrastructure creation to user-centric governance.

About the Digital Public Infrastructure (DPI) 

• Digital Public Infrastructure (DPI) is a set of foundational digital systems that forms the backbone of modern societies. DPI enables secure and seamless interactions between people, businesses and governments.

• DPIs enable faster, more efficient innovation by allowing various sectors to build on these shared, reusable digital building blocks to create new services. 

• Key examples include digital identity, digital payments (like India's UPI), and secure data exchange platforms. 

Sources:
IIMB
New Indian Express