Digital Public Infrastructure: Achievements & Challenges

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In the Budget 2024, the government reaffirmed its commitment to a Digital Public Infrastructure (DPI)-led approach for digital transformation. This approach focuses on creating scalable and accessible digital platforms, such as Aadhaar, UPI, DigiLocker, & Open Network for Digital Commerce (ONDC).
These have revolutionised sectors like healthcare, education, and financial inclusion. However, despite their rapid scale and widespread benefits, DPI platforms face critical financial sustainability and operational viability challenges.

India’s Digital Economy: Key Highlights

Contribution to GDP: ₹31.64 lakh crore (11.74%) in 2022–23; projected to reach 13.42% in 2024–25.
Employment: There are 14.67 million workers in the digital sector, and the gig workforce is projected to reach 235 million by 2029–30.
Productivity: Digital sector productivity is five times higher than traditional sectors.
Global Capability Centers (GCCs): India is home to over 2,975 GCCs, which make up more than 50% of the world’s GCCs.
Digital Payments: UPI’s share of total digital payments rose to 83% in 2024, with 208.5 billion transactions recorded.

Global Status of Digital Public Infrastructure

World Bank’s ID4D Initiative: Supports foundational ID systems in at least 132 countries.
G2Px Programs: Active in 35 countries, improving government-to-person digital payments.
MOSIP Platform: Adopted by 11 countries, including Morocco, the Philippines, and Sri Lanka.

Achievement of India’s Digital Public Infrastructure

Financial Inclusion: Aadhaar has issued over 136.65 crore cards, and UPI handles 40% of India’s digital transactions, bringing millions of unbanked individuals into the formal financial system.
E-Governance: DigiLocker, with 46.52 crore users, and eSign have streamlined government services, reducing paperwork and improving efficiency through digital document management.
Digital Economy: UPI processed ₹23.24 lakh crore in transactions, while ONDC expanded to more than 616 cities with 7.64 lakh sellers, driving India’s digital economy growth.
Rural Development: BharatNet connected 2.14 lakh gram panchayats, and 6,15,836 villages had 4G connectivity, bridging the digital divide in rural areas.
Innovation: IndiaAI and similar initiatives are integrating AI, blockchain, and IoT into the DPI, aiming to position India as a global tech hub by 2025.

Challenges in Digital Public Infrastructure

Digital Divide and Access Issues: Limited internet access in rural areas hinders participation in digital services, with only 39% of rural households online.
Cybersecurity Concerns: The expansion of digital services has heightened vulnerabilities to cyberattacks. For instance, the Digital Threat Report reported that phishing attacks in India surged by 175% in 2024.
Data Privacy and Protection: Concerns about data security persist due to India’s unresolved Personal Data Protection Bill and ongoing privacy challenges with the Aadhaar system.
Digital Literacy and Skill Gaps: According to Ideas for India, only 38% of the population is digitally literate and lacks basic skills, so access to e-governance services is severely limited.
Infrastructure Challenges: Existing inadequate infrastructure, including inconsistent electricity and sluggish broadband rollout, negatively impacts the provision of digital services, particularly in rural areas.
Digital Exclusion of Vulnerable Groups: Marginalised communities, such as women, the elderly, and individuals with disabilities, experience significant barriers to digital inclusion.

Other Significant Platforms

Government e-Marketplace (GeM): Platform for transparent and efficient government procurement.
UMANG (Unified Mobile Application for New-age Governance): Provides citizens easy access to various government services.
API SETU: Facilitates open API integration for various government platforms.
Co-WIN and Aarogya Setu: Critical for vaccination tracking and COVID-19 contact tracing.
E-Courts: Digital transformation of court procedures and case management.
Poshan Tracker: Monitors nutritional services for women and children.
SIDH (Skill India Digital Hub): Supports skilling, employment, and livelihood initiatives.
India Stack Local: Showcases 493 digital solutions developed by State Governments and UTs.

Way Forward

Institutionalised Impact Assessment: Integrate regular and independent evaluations to ensure DPI initiatives are inclusive, effective, and adaptive to evolving needs.
Strengthening Data Governance: Develop transparent, anonymised, and secure data-sharing frameworks to balance privacy with the need for granular, intersectional insights.
Inclusive Design and Accessibility: Ensure digital platforms are user-friendly, multilingual, and accessible to differently-abled users to widen adoption.
Public-Private-Civil Collaboration: Foster partnerships across sectors to co-create scalable and sustainable DPI models with shared accountability.
Global Leadership with Safeguards: Promote India’s DPI model globally while advocating for ethical standards, safeguards, and capacity-building for the Global South.

India’s Digital Public Infrastructure has set a global benchmark for inclusive digital transformation. To ensure its continued success, it is essential to strengthen data governance, foster public-private collaboration, and bridge digital divides, positioning India as a leader in the global digital economy.

Reference: Indian Express | PMFIAS: Digital Public Infrastructure

PMF IAS Pathfinder for Mains – Question 170

Q. Digital Public Infrastructure (DPI) is a cornerstone of India’s digital economy. Analyse the institutional and financial challenges facing DPI and suggest measures to improve its effectiveness. (250 Words) (15 Marks)

Approach

Introduction: Write a brief overview of Digital Public Infrastructure (DPI) and its services, including digital identity, payments, and data-sharing.
Body: Discuss institutional & financial challenges of DPI and the measures to enhance its effectiveness.
Conclusion: Write a futuristic conclusion mentioning a robust DPI ecosystem and its potential impacts.