IMF Lauds India’s Digital Public Infra 

The International Monetary Fund (IMF) has highlighted India’s journey of developing a global standard digital public infrastructure and said it had lessons for other countries embarking on their own digital transformation. This was brought out in a working paper, which was shared on Twitter by IMF’s India representative Luis E. Breuer. 

The paper titled “Stacking up the Benefits Lessons from India’s Digital Journey” said the country’s development of its digital stack was guided by a foundational building blocks approach with a focus on supporting innovation across the ecosystem that involves unbundling various components of the solution to a set of problems and identifying a minimum common core. 

The paper notes that the building block approach provides better solutions for a country as diverse as India, creating basic tools for those on ground level to create better solutions. The focus on supporting a vibrant ecosystem implies the need for interoperability between the various digital public infrastructure elements and a competition-focused design.

The interoperability was supported in India through open standards that allows everyone to utilize the functionality provided by India Stack. “These principles are applied to other use cases in education and health, including the Covid-19 vaccine and distribution platform, CoWIN,” says the IMF note. 

“Using a digital backbone allowed India to scale its vaccine delivery quickly and overcome challenges such as large-scale internal migration. The technology underlying CoWIN has been deployed in Indonesia, Philippines, Sri Lanka and Jamaica to help facilitate their vaccination programs,” IMF said in the note (download it here). 

The country also recognized the importance of information technology innovations in the digital identity layer, which resulted in the creation of the Aadhar card. Prior to this, India had several identity cards and databases ranging from ration cards, voter cards, taxation identities etc. However, these did not have universal coverage required to handle a billion-plus citizens. 

The use of technology was critical for developing such an identity system that could be scaled and was unique and robust without actually costing much. The government actually brought in experts such as Nandan Nilekani to shepherd the project, signaling its commitment to the use of technology to solve policy challenges. 

It also took note of the experience and challenges of rolling out a taxation ID provided by the lessons learnt from the Aadhar rollout and said the digital building block approach was then built on top of a set of basic protocols that worked in isolation and in tandem. For example, in the India Stack, Aadhar removes identification from entitlement and UPI gets payment address away from actual payment. 

This modular approach fosters innovation by allowing each building block to address multiple problems, including for use cases that had not been envisaged by the initial developers. Focusing on the problem’s core also allowed each building block to be used at population scale, the IMF note said. 

“For a large and diverse country such as India, a building block approach provides those closer to the problem with the basic tools to create tailored solutions. In the case of Aadhaar, the unbundling as well as the minimal information collected (name, age, gender, address, biometrics) enabled its rollout at speed and scale. In contrast, other countries have hit stumbling blocks with their digital ID rollout when these IDs convey an entitlement, such as citizenship,” the statement said.