Executive Briefings Business & Management: Nandan Nilekani

A Great Debt

The digital transformation of India has just begun. The decade ahead, will prove remarkable both in the way the government delivers its services but also how citizens use technology to enrich their lives. The India Stack is a bouquet of offerings that work on a digital platform with the potential to enhance productivity at levels rarely seen before. In many ways, as Nandan Nilekani argued in a recent article, all of this comes with the potential to alter the nation’s destiny.

It all began with Aadhar, a unique identification mechanism that works on biometrics which nearly every citizen of India now possesses. The process links an individual’s mobile phone number to a bank account, travel portals, health certifications and vaccinations, amongst a series of other offerings that the government provides to people. Health benefits, subsidised food and cooking gas are included in a larger gamut of support services that are ably delivered. Previously, over 80% of government expenditure, on social issues, were said to be siphoned off. The man behind the basic platform, Mr Nilekani, chaired the Unique Identification Authority of India and was consequently responsible for developing the technological backbone infrastructure.

The applications of Aadhar are several and limitless. Even Mr Nilekani, in those early years, may not have comprehended what he was about to unleash. Digital platforms that have recently been built, for instance in the domain of banking and money transfers, such as the United Payments Interface have resulted in the financial inclusion of literally the entire population of the country. This would, almost certainly, not have been possible otherwise. These platforms rely on Aadhar to confirm an individual’s identity. The economic benefits of such inclusion are enormous and hard to measure. A few weeks ago, whilst on a hike in the Kinnaur Valley, I came across a tea vendor at a high-altitude remote village. Surprisingly, he accepted digital payments, frankly as the preferred option, as the time saved with fussing about for change made the whole experience seamless. He explained that all his supplier payments were done digitally. India’s digitised money transfers run into hundreds of millions of transactions each month.

The applications that rely on Aadhar cut across the spectrum from education, healthcare, insurance, driving licenses, travel and more. The list is practically endless. But the latest addition in the government’s basket of offerings is ONDC – an Open Network for Digital Commerce. This is a private, non-profit, company established by the Government of India, to develop an open e-commerce platform that offers open trade and creates networks between shoppers, technology platforms and retailers.The intent is to help small businesses who work on thinner margins, without the economies of scale, to offer their trade to a large national audience. Consumers would benefit with a greater choice and sellers with low-cost options when compared to the services of larger companies like Amazon, Flipkart and MakeMyTrip. The jury is still out but ONDC can be a game changer.

Mr Nilekani played a role in all of this. He has advised UPI, ONDC and informally worked with the government on several projects. Perhaps, most importantly, it is said that he convinced the prime minister, in the early months of the administration, in 2014. India owes a great debt to him. Then, full credit to Mr Narendra Modi, for having recognised, very early on, how significant Aadhar would be as the basis of his personal vision to transitiom India into a new digital age.