India has a great digital infrastructure stack with its unique Aadhaar foundation. This is mostly owned and sustained by Government, therefore, it is referred as Digital Public Infrastructure. There are already many successful applications that have reached the remotest and poorest habitats in rural and forest areas. After introduction of Low Earth Orbit Satellites communication networks, India can opt for developing and implementing many new exciting services which make for 100% inclusion and help create a more responsive democracy. Before we start discussing those, lets become aware of few facts and possibilities from 2025 onwards.
Today India has among the best, if not the best, Digital Public Infrastructure (DPI) of all major countries of the world. Other countries that have a great Digital Infrastructure have private players owning most of it; this is not so in India where ownership is significantly that of the Government or Government subsidised services constitute most of the DPI (China may be an exception).
In India the number of people who make online transactions as a proportion of literate people will likely be the highest in the world. The DPI provides great quality and reliable services free of cost and private players have built
applications on top of it. Even the not-so-literate street vendors display a QR Code of their UPI (Universal Payment Interface) account mapped to their bank accounts or Paytm wallet accounts and people make payments into their account from their bank accounts or electronic wallets. India's top payment wallet players are listed at the end of the article.
The DPI has three pillars – what PM, Modi, the acronyms making champion, calls the JAM trinity. Jan-Dhan Bank account, Aadhaar ID system and Mobiles. In 2013 digital transactions as well as DBT (Direct Benefits Transfer) by the Government were already taking place among those who had bank accounts.
On August 28, 2014, Prime Minister Narendra Modi launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) with the goal of promoting financial inclusion by opening bank accounts for the unbanked. Banks were encouraged to open many accounts quickly, and reports claim that over 18 million accounts were opened in just one week as part of this initiative. PM forced RBI to drop the onerous requirement of KYC (Know-Your-Customer) paperwork and allow banks to open accounts for any Indian citizen above 10 years of age and having an ID proof. With this initiative, the financial inclusion, contemplated by Nilekani under the UPA regime, was scaled up rapidly. Today there are over 500 million Jan-Dhan active bank accounts, 56% belong to women and 67% are in rural and semi-urban areas.
The foundation of the DPI stack was laid in 2009 by the launch of Aadhaar project. Prime Minister Manmohan Singh recruited Nandan Nilekani who had proposed a biometric based ID System for every resident Indian. Nilekani had described his vision of an online ID System and its potential benefits, in his book, “Imagining India: Ideas for the New Century”. The project faced opposition from most of the people in positions of power – political leaders and bureaucrats – at the Centre and State Governments. As the Chairman of the Unique Identification Authority of India (UIDAI) in the rank of a Cabinet Minister, Nandan Nilekani did a stellar job of convincing almost all CMs and Cabinet Ministers, and conceptualizing, designing, developing and deploying Aadhaar ID System across the country. Nilekani was easily one of the best IT Managers in the world, a billionaire entrepreneur and one who was highly articulate. Time magazine had chosen him the Businessman of the Year in 2003. Nilekani joined Indian National Congress in March 2014. He contested from the Bangalore South constituency. Contrary to all expectations, he lost by 228,575 votes to BJP candidate Ananth Kumar in the 2014 Lok Sabha election. Modi had actively canvassed against him calling the Aadhaar project a big scam and one which deserved to be buried ASAP. Though Nilekani chose to retire from politics, he sought a meeting with the victor, Narendra Modi and convinced him about the utility of Aadhaar. After the meeting, Modi changed his stance and asked his government to aggressively continue issuing Aadhaar to all Indian residents. Today 99.8% of Indian residents have Aadhaar number.
By 2013, Aadhaar had been linked to 600 million Voter Cards (EPIC – Electoral Photo Identity Card). Had this exercise been continued with
legislative support, India today would have had the biggest online voting system, far more reliable than the existing EVM System, in the world.
Unfortunately, Modi made the mistake of Passing the Aadhaar as a Money Bill. The Aadhaar Act, 2016 was passed by the Lok Sabha on March 11, 2016. The Act was introduced as a money bill, and certain provisions came into force on July 12, 2016. Money bill requires majority vote only in Lok Sabha. As BJP was not sure of securing +50% votes in Rajya Sabha, it did not propose Aadhaar as a General-Purpose ID System bill. As a result, Aadhaar cannot be legally mandated or used in applications which are not monetary in nature. Furthermore, SCI (Supreme Court of India) has ruled that even if one does not have Aadhaar, Government cannot refuse the monetary or other entitlements of that person.
If Aadhaar is passed as a security or General-Purpose ID System bill by both houses of the Parliament and extended in scope to the presently excluded territories of Assam, Jammu & Kashmir and Meghalaya, India can have a very robust security system
besides online voting system and the world's most inclusive financial system.
Here are some statistics, to console ourselves, that indicate how the investment in India’s DPI has paid off.
| Year | Number of digital transactions per day | Value of digital transactions per day |
| 2015 | 5.7 million | Rs.25,205 crores |
| 2020 | 24.2 million | Rs.1.2 lac crores |
| 2025 | 284 million | Rs.6.3 lac crores |
Today the Government makes over 9 million DBT (Direct Benefits Tranfer) transactions daily of the value of Rs. 1,726 crores. The annual value of DBT in 2023-24 was Rs.6.9 lac crores. Approximately Rs. 2.2 lac crores have been saved due to avoidance of corruption and leakages through intermediaries. In future, DBT could be made "coupon linked money", in which the redemption of money could be made for specific purchases only - for e.g. school fees, food grains not just at PDS Ration shops but any shop! As of June 30, 2023, there were around 545,000 Fair Price Shops (FPSs) in India. These shops are the backbone of the country's Public Distribution System (PDS) and are responsible for distributing subsidized food grains to millions of citizens.
Over 1.2 billion mobile connections are active in India today. As of October 2024, there were 941 million broadband subscribers of which 896 million were wireless.
Over 99% of Indian families have at least one member with a bank account in India.
The above are statistics which must be sobered down a bit by the following statistics, which show India has long way to go in terms of user education and digitalisation, i.e. digital literacy and digital usage.
• Account Ownership: As of 2021, about 77% of Indians above 15 years owned a bank account.
• Digital Payments: The total transaction value in the digital payments market is projected to reach $1,892 billion by 2025 (China will reach a value of $4,240 billion).
• Online Banking: Approximately 51% of Indians use online banking channels (China's figure is 80%) .
While Direct Benefit Transfers (DBT) have helped in bringing more people into the banking system, true financial inclusion also involves regular usage of financial services, access to credit, insurance, and financial literacy.
Going forward, the following applications will deliver great efficiencies to users, thanks to India's DPI:
- Account Aggregator (AA) network was introduced as a financial data-sharing system by Reserve Bank of India (RBI) when it issued the Master Direction viz Non-Banking Financial Company (NBFC) - Account Aggregator (Reserve Bank) Directions, dated September 02,2016.
- DigiLocker is a key initiative under Digital India program. Aimed at providing paperless governance to the citizen. Citizens can log into DigiLocker account to securely access and manage their digital documents, e.g. Aadhaar, Driving License, PAN, EPIC, Ration Card, Ayushman Card etc. provided by various government departments.
- National Digital Health Mission envisages a secure online platform for storing and exchanging health related data of citizens. The Ayushman Bharat Digital Mission aims to create a connected digital health ecosystem in India. It intends to enhance accessibility and equity of healthcare services by ensuring continuity of care with citizens being the owners of their health data. This mission will link the digital health solutions of hospitals across the country.
- After introducing Aadhar linked EPIC, India can not only have online voting for elections, it can introduce online Referendum voting - making Indian democracy truly responsive. Furthermore, India can easily introduce Two-Round System (TRS) in place of First Past The Post (FPTP) system. In FPTP the winning party can have much below the 50% Vote share but much above the 50% Seats share! Not so in TRS, the winner will always be the one having over 50% Vote share. FPTP distorts democracy in a multi party country like India much more than it can in a two-party country like USA.
- After introduction of Coupon linked DBT, Government can remove all subsidised prices which distort the markets. Examples are - PDS prices at Ration Shops will be changed to market prices, Fertiliser prices will be made market prices, Electricity will be made market prices - because targeted beneficiaries will be given Coupon linked DBT for specific purposes. Going forward we will discover true cost of Subsidies AND we will be able to introduce market efficiencies - as consumers will have freedom of choice - she can buy rice from any shop not just PDS shop etc. Going sill further, we can remove all subsidies or coupon linked DBT and introduce DBT for targeted Basic Income (modified UBI - Universal Basic Income meant for all the poor people - i.e. BPL people).
List of top ten payment wallets in India:
Bajaj Finserv App: offers a wide range of services including bill payments, UPI transfers, and financial products.
Paytm: A comprehensive app for UPI payments, bill payments, ticket booking, and shopping.
Amazon Pay: Provides a seamless payment experience with Amazon-specific offers.
WhatsApp Pay: Facilitates UPI transactions directly from WhatsApp chats.
Mobikwik: Combines digital wallet features with UPI payments, offering bill payments, mobile recharges, and credit line options.
BHIM: A UPI app developed by the National Payments Corporation of India (NPCI) for simple and secure transactions.
Freecharge: Offers UPI payments, bill payments, and recharges with cashback options.
JioMoney: Provides UPI payments, bill payments, and recharges, integrated with Jio services
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