India Stack – Enabling inclusion for 1.3 billion Indians

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Government of India is pushing evolution of e-governance ecosystem through a series of infrastructure initiatives. Some of the major foundational initiatives are – Aadhaar, UPI (Unified Payments Interface) and Digital Locker. After creation of these major platform, another important leg of initiative is to mainstream these into common day to day usage by citizens. India Stack is lead player in promoting and making it easier for businesses, citizens and government to build on government platform infrastructure. The idea of India Stack is codified in its vision which states that “India Stack is a  set of APIs that allows governments, businesses, startups and developers to utilize a unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery“. Today APIs are common medium for system level transactions. 

 

 

Aadhaar is the largest biometric identity project in the world. Identity is huge problem now a days across the world. As more and more people migrate, they lose their identity and credit worthiness. In a new country, people have to rebuild certain degree of financial worthiness to avoid reproach from banks and lending agencies. Thus, it prevents entrepreneurs and professionals to find a new life or a career. In India, the bigger challenge was inclusion – availability of health, education and other basic services to its citizens. Aadhaar scheme was conceived as a means to do this.

India Stack is the richest place for innovation over the next 5-10 years, enabling a billion people to drive consumption and GDP growth” – CHAMATH PALIHAPITIYA

In technical terms, a technology stack also called solutions stack is a list of all technologies and tools to build and run an IT application. Indian government led the creation of tech stack from identity to payments to other services. India stack is a unique convergence of technology, government and regulatory frameworks.

 

India Stack is the largest API in the world. Since its deployment, a number of hackathons have been organized to develop applications for the API. The API flourished in stages starting with development of Aadhaar, which provided Universal ID number to citizens. Aadhaar is world’s biggest biometric identity database, and around 1.26 billion Indians are registered on the database. Then e-KYC, which enabled paperless and rapid verification of address, identity etc. e-Sign, whereby users could attach a digital signature to a document and UPI enabling cash payment. Digital Locker is the recent one which provides a platform for document issuance and verification.

 

Four layers of India Stack
  1. Presence-less Layer: The biometric identity, Aadhaar is the bottom layer of the stack. This layer is owned by Unique Identification Authority of India.
  2. Paper-less Layer: The paperless layer uses Aadhaar identity data to provide e-KYC (Know Your Customer), e-Sign and e-Documentation services. This layer is owned by Ministry of Electronics and Information Technology.
  3. Cash-less layer: With the development payment possibilities using UPI, IMPS. AEPS etc. instant payments systems have been enabled such as peer-to-peer transfer of money from bank accounts. This layer is owned by National Payments Corporation of India (NPCI)
  4. Consent Layer: This is a data privacy layer with an open personal data store and is owned by Reserve Bank of India (RBI)
Prominent services built on top of APIs 
  • Direct Benefit Transfer (DBT) by government into citizen’s bank accounts
  • Payment projects under NPCI – road toll and domestic remittances
  • Payment and money transaction enabling businesses and trades through UPI
Opportunities
  • Small and Micro industries often face challenges in securing credit from financial institutions and banks. Soon, several companies may come in space of insurance, lending and wealth management. Based on data, the cost of lending may come down for MSMEs and individuals. 
  • NPCI’s Open Credit Enablement Network (OCEN) will soon pave way for open banking,  which shall aggregate lender and borrowers on a common platform. 
  • The payments platform approach may go global wherein financial transactions are enable through UPI.

Further Readings

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