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India’s digital
leapfrog
By Sanjay Jain and Som Pal Choudhury
or the first 50 years after public assets have revolutionised the way
independence the Indian economy India does business, making it a leader in
grew at a snail’s pace, which digital infrastructure. Today, more than 1.2
Fbecame known as the ‘Hindu rate billion people have a digital identity, known
of growth’. That changed 25 years ago as Aadhaar. Enrolment into Aadhaar was
when, spurred by a series of economic rapid - reaching one billion people in just 5
reforms, the growth rate jumped to seven 1/2 years, one of the fastest in the world.
per cent, lifting 300 million people out of This digital identity has resulted in lower
poverty. China made a similar transition, know-your-customer (KYC) costs, and rapid
prioritising manufacturing and expansion of the banking system. Today
infrastructure investment. The Chinese most Indian families have access to a bank
government used an authoritarian, top- account. The subsidy program now
down macro push. India's transformation transfers benefits directly into bank
has been very different, with economic accounts, reducing wastage and corruption.
growth driven from the bottom up. Mobile payments have bypassed plastic
India has made the transition from a cards, propelling India towards a cashless
largely agrarian economy to a services economy. The digital infrastructure
economy, bypassing manufacturing includes a digital locker for important
altogether. A series of privatised models documents such as driver’s licenses and
evolved, leapfrogging to the next generation degree certificates.
technologies. Television leapfrogged to Taxation was simplified, resulting in a
cable, bypassing free to air. Telecoms uniform tax with a digital interface. The tax
skipped landlines and went straight to 2G, coverage has improved significantly.
and then to 4G. Today India has one of the The digital infrastructure is becoming
lowest call rates and data rates in the richer, with new additions enabling an
world, creating a large subscriber base of ambitious healthcare and health insurance
900 million users. It is now the fastest scheme and a digital sky for drone flight
growing smartphone market as well. plan authorization, for example. The
More recently, ‘Digital India’ has become success of IndiaStack has attracted
the Indian Government’s single biggest considerable interest from other countries,
initiative. This is underpinned by who are exploring ways and means to
“IndiaStack”, a paperless, cashless, leverage this infrastructure for their own
consent-based scalable architecture. These use.
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