Approach:

Introduction: Define DPI

Body: Mention significance and challenges

Conclusion: Way ahead

Answer

DPI is an open-source identity platform that can be used to access a wide variety of government and private services by building applications and products on a set of application programming interfaces (APIs) like India Stack. It includes digital forms of ID and verification, civil registration, payment (digital transactions and money transfers), data exchange, and information systems. DPI was introduced in India in 2009 when Aadhaar was first launched.

For ex:  Multiple large-scale DPIs like JAM trinity which links Aadhaar, mobiles and bank accounts, Digi Locker, Bharat Bill Pay, UPI, Aadhaar Enabled Payment Systems (AePS) and Immediate Payment Service (IMPS), CoWin (for vaccination), etc.

Significance of DPI: 

• Economic Growth: By providing a platform for digital commerce and entrepreneurship, DPIs stimulate economic activity, create jobs, and boost GDP.
• For ex: Enhancing the ease of doing business. According to the World Bank, India ranked 63rd in 2022 in ease of doing business across the world among 190 countries
• Formalisation of business transactions with help of GSTN. It may be noted that the GST collection was over Rs 1.59 lakh crore in August 2023.The number of GST taxpayers has doubled from 2017 to 2022.
• The UDYAM Portal, which relies on digital identity, has successfully registered over one crore MSMEs (Micro, Small, and Medium Enterprises).
• Education: Inclusive DPIs support online learning, enhancing educational opportunities for students across India, regardless of their location or background.
• For ex: National Knowledge Network (NKN): NKN is a high-speed network linking universities, research centers, libraries, and various knowledge centers throughout India. 
• Government Services: DPIs enable efficient and accessible e-governance, reducing bureaucracy and corruption while delivering services to citizens more swiftly.
• For ex: UMANG (Unified Mobile Application for New-age Governance) is a mobile application initiated by the Indian government, designed to offer convenient access to a wide range of government services and schemes.
• Healthcare: Telemedicine and health information dissemination become more accessible, improving healthcare outcomes, especially in rural areas.
• For ex: National Health Stack: The National Health Stack is a prospective digital framework with the objective of establishing a unified platform for the exchange and compatibility of health data
• Financial Inclusion: Through digital banking and payment services, DPIs help bring financial services to the unbanked and underbanked populations, fostering financial stability.
• For ex: The proportion of the population with bank accounts rose from 53% in 2015-16 to 78% in 2019-21, according to NFHS data
• Over 30 lakh vendors have been granted loans of Rs 10,000 each under the PMSVANIDHI scheme, which operates on digital identity.
• According to industry estimates, cost for bank of onboarding customers in India decreased from USD 23 to USD 0.1 with the use of DPI
• Agriculture: Inclusive DPIs have the capacity to furnish farmers with up-to-the-minute weather updates, market prices, and optimal agricultural methods. 
• For ex: Agri Stack aims to make it easier for farmers to get easier access to cheaper credit, higher-quality farm inputs, localized and specific advice, and more informed and convenient access to markets.

Challenges of DPI:

• Digital Divide: Despite progress, a significant portion of the population still lacks access to basic digital resources and services, exacerbating the digital divide, particularly in rural and remote areas. People with disabilities may encounter digital accessibility challenges due to limited features and design in digital platforms.
• For ex: As per Oxfam India Inequality Report 2022, among the poorest 20% of Indian households, only 2.7% have access to a computer, while 8.9% have access to the internet.

• Cybersecurity Concerns: As DPI expands, it faces increased cybersecurity threats, including data breaches and cyberattacks, which can compromise sensitive information and public trust.
• For ex: According to a report by cybersecurity firm CloudSEK, cyberattacks on Indian government agencies more than doubled in 2022. India’s share in total cyberattacks on government agencies rose to 13.7% in 2022 from 6.3% in 2021

• Privacy Issues: The collection and use of personal data for DPI purposes raise privacy concerns. Striking the right balance between data utility and privacy protection is a complex challenge.
• For ex: In June 2023, reports indicated that a Telegram bot might be sharing personal data of Indian citizens registered on the CoWIN portal for COVID-19 vaccinations.
• Infrastructure Gaps: Inadequate digital infrastructure, including broadband connectivity and reliable electricity supply, hinders the effectiveness of DPI in reaching all corners of the country.
• For ex: In 2022, only around 52% or 759 million people, became regular internet users, as per an IAMAI and Kantar report.
• Interoperability: Achieving seamless interoperability between various government systems and databases is a complex task, often resulting in data silos that limit the full potential of DPI.
• Data Quality: Maintaining accurate and up-to-date data within DPI systems is crucial for informed decision-making and addressing data quality issues remains a constant challenge.

Therefore, there is a need to prioritize digital inclusion while ensuring data protection and equal digital access. Public-private partnerships can aid this. Increased investment in rural digital infrastructure is vital for improved connectivity and affordable internet services. Promoting regional language content enhances accessibility. Tailored digital services like healthcare and education platforms can significantly benefit underserved communities.

Digital Public Infrastructure is vital for modern governance, and India has made substantial progress.It has evolved into our new economic engine that will propel India to a $25 trillion GDP by the 100th anniversary of our political independence.