All the water in the world cannot fill a bucket with a hole in it. The finance minister has to allocate funds to train experts in artificial intelligence (AI) while also providing for fifth graders. We need to fix the basics, as much as we need our moon shots. This juxtaposition is no longer surprising, it is the norm for India. Nevertheless, our ambition should not be tempered by our reality. As long as the road ahead is, we should appreciate we’ve already come quite far!
India has made remarkable progress with regard to financial inclusion. In the last three years, we have added more than 310 million accounts, owing to the adoption of electronic know-your-customer (eKYC), which enables a bank account to be opened in five minutes using Aadhaar. An average Indian can now transact between different bank accounts using any bank’s app in mere seconds because of the Unified Payment Interface (UPI)—a state-of-the-art payment platform developed by the National Payment Corp. of India. UPI does upwards of 150 million transactions a month, a number significantly higher than that of credit card transactions for the same period. We have only been able to achieve this because of a timely investment in the creation of digital infrastructure like the India Stack as a public good.
The finance minister’s opening remarks laid emphasis on this government’s focus on structural reforms. We cannot deal with our diverse and complex problems without focusing on fixing the basics and investing in infrastructure. But the definition of the word infrastructure needs to expand. In the digital age, infrastructure no longer means just roads, bridges and highways but also platforms, software development kits (SDKs) and application programming interfaces (APIs). The government’s role isn’t to prescribe cookie-cutter solutions for all our problems from Delhi, but instead to enable grassroots innovators to co-create their own solutions, which fit their context.
This can be called the societal platform approach of solving India’s hard problems. Sarkar (government) alone cannot fix our problems, it can only help create the right conditions for samaaj (civil society), sarkar and bazaar (market players) to co-create context-aware solutions. I am glad to see this year’s budget underlining this approach. Announcements such as creating 500,000 Wi-Fi hotspots, which will provide broadband access to 50 million rural citizens, will pay off in ways we cannot even imagine today. Similarly, we will see tremendous benefits of the formalization of toll collection, through FasTag, an electronic platform using modern wireless technology, which can be applied to parking and congestion pricing as well.
The beauty of these platforms is that they are extendible. The second-order benefits take a lot less time to implement, and their benefits are felt much quicker. Now that we have basic financial inclusion, our ambition can move to financial resilience. For example, on the back of the financial access created by the Pradhan Mantri Jan Dhan Yojana, the budget announced a more ambitious target of bringing all 600 million basic accounts within its fold and undertaking measures to provide services of micro insurance and unorganized sector pension schemes through these accounts.
The finance minister also announced his intent to use data from the Goods and Services Tax Network (GSTN) to enable flow-based lending for micro, small and medium enterprises (MSMEs). The technology spine of GST Network allows us to imagine a system where even small businesses can get a quick loan, online without paperwork, on the basis of their tax data, which is provided at the invoice level. The Trade Receivables e-discounting System (TReDS) will get a big boost as suppliers can instantly discount their invoices which have been accepted by the buyer on GSTN. The move to an e-assessment system rather than relying on person-to-person interaction is also a big win for MSMEs across the country. The creation of an Aadhaar-like unique identification number for enterprises will help spread the benefits of these online platforms to the micro-entrepreneur as well. We’re probably going to be able to achieve this rapidly, because all the building blocks are already in place.
We’re seeing the government adopt the same approach for education. Combining cyber and physical systems as mentioned in the budget, is the right way forward. The Department of Science & Technology will launch a mission on Cyber Physical Systems to support establishment of centres of excellence. They are also investing in creating digital infrastructure such as Diksha—the national teacher platform. Healthcare too needs structural reform and digital infrastructure, if we are to successfully roll out the National Health Protection Scheme—the world’s largest government-funded healthcare initiative that will cover a majority of our vulnerable population.
The system is not perfect, but we must appreciate how much progress has already been made. We are beginning to develop an approach that works for our complex, varied problems. A budget for a country as large and diverse as India cannot assume to know the answers to all the problems. Yesterday, we heard the finance minister address everything from Hawai Chappals to Hawai Jahaaz. But the unifying theme is that they are investing in our basic infrastructure, both physical and digital.
Nandan Nilekani is former chairman of the Unique Identification Authority of India and is currently chairman of Infosys Ltd. The views expressed are personal.