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The various elements of the network, like coverage, access, pricing and, crucially, what was transported, were designed and implemented to meet the interests of select users aligned with the British Raj.
Post-independence, the Indian government realized the importance of evolving the railway network into a public good to drive economic activity across the country, helping economic agents build on top of this. This was the case with diverse and common infrastructural enablers such as roads, ports and so on.
The key considerations of the government’s support and participation were the scale of investments needed and ensuring democratic principles for access to this enabling infrastructure.
In the last few decades, we have experienced a new dimension evolving to exert influence on economic activity. This is the dimension of digitalization.
The early evolution of digitalization, enabling population-scale participation, was on foundations built as ‘digital’ public infrastructure. For example, HTTP and SMTP, as open protocols, enabled universal access to the web and digital communication at highly competitive charges for practically every segment of society.
Given the transformative power of digitalization, the Indian government built foundational infrastructure in the digital domain to extend access to the wider population beyond a privileged segment of society. This is now recognized globally as India’s Digital Public Infrastructure (DPI).
Several initiatives are being rolled out to fast-track the journey towards this vision of Digital India. Nationwide broadband access is being established to reach distant towns and villages. Aadhaar is now available as a means for all residents of the country to establish their identity to participate in economic activity.
When it came to the digitization of financial transfers, the government established a Unified Payments Interface (UPI) to ensure interoperability in payment systems and prevent fund transfers from being confined to walled gardens operated by a few entities.
In this case, UPI did not mandatorily replace other digital payment systems. It introduced a new avenue that could broad-base access at an affordable cost and also establish a network with participation from every member of the banking system in an interoperable manner.
Having demonstrated the power of DPI to bring about transformation at population scale, the government is now building on this idea in multiple sectors. Crucially, its involvement is as an enabler and not a monopoly player edging out the private sector.
Rather, through the establishment of foundational infrastructure, it is enabling wider participation by innovators and entrepreneurs in every sector to build services on top of it.
For example, a faster and more cost-effective way of establishing identity using Aadhaar has enabled deeper penetration of both telecom and banking at a speed not experienced anywhere in the world.
Building on the learning from each initiative, every new DPI project is evolving with increasing collaboration between the public and private sectors. In the case of Aadhaar, the government established the foundational infrastructure, with enrolment and authentication services provided by the private sector.
When it came to digital financial transactions, the government enabled the establishment of the central infrastructure through an independent non-profit company, National Payments Corporation of India (NPCI), with investment purely from the banking industry.
Further, in the field of commerce, the government established the Open Network for Digital Commerce (ONDC), wherein it is acting as the sponsor and endorser of a Section 8 company (a kind of not-for-profit set up to promote commerce, art, science and religion, among other endeavours).
It used industry participation to roll out an open protocol, with network policies that establish an unbundled and interoperable network as against the walled gardens of platforms operating with proprietary protocols that limit competition and innovation.
Crucially, it is not attempting to restrict existing players or business models. It is an inclusive agenda that allows every platform to participate and encourages them to come up with models that will expand the footprint of digital commerce from current single-digit levels of penetration to population scale.
This will make access to markets, credit, skills and logistics more democratic and broad-based, especially for small and micro enterprises and rural as well as urban consumers.
In the last couple of years, ONDC has shown that in an open network, every product or service that is ‘catalogable’ using an open protocol can be discovered, deals negotiated and contracted, orders fulfilled and post-order servicing managed through diverse buying interfaces with digital consumers (like banks, media and gaming companies), enabling every segment of consumers to procure products/services of their interest.
Thus, as the network matures, 1.4 billion consumers will be available as a common pool to every merchant/service provider that accesses the network using its open protocol instead of being under the control of a few platforms with walled gardens.
This will enable multiple networks in commerce, logistics, mobility, health, agriculture, energy, etc, to evolve and also be interoperable to the extent it is relevant to reduce costs and provide a seamless experience to the consumer.
The beauty of this idea is in the collaboration between the public and private sectors in digital infrastructure creation to enable innovation, specialization and entrepreneurship, without the government getting into business or in the way of entrepreneurship.
These are the author’s personal views.
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