Your browser is currently blocking notification.
Please follow this instruction to subscribe:
X
Notifications are already enabled.
X

Nandan Nilekani On Creating The Architecture For India’s Digital Future

Nandan Nilekani On Creating The Architecture For India’s Digital Future

Nilekani spoke about India’s digital transformation at FICCI National Executive Meeting

The former UIDAI chairman spoke of the major digital initiatives of the last decade

“We have to make sure that both legally and technologically, we have as much protection as possible,” he said

Celebrated American comedian and satirist Jon Stewart once asked Infosys cofounder and its former chairman Nandan Nilekani “What could be the biggest pitfall may be (for India)?”

It was in 2009, and Nilekani responded, “I think the lack of education. We still have lots of people who are not getting good schooling. And, that’s going to be the difference between demographic dividend or demographic disaster. Getting the education right is going to be the key for the next 20 years.”

However, in the same conversation, Nilekani, the author of numerous books including Imagining India, did add that — ‘technology is just an enabler’ and it needs right governance and education to bring the change.

Not taking political sides and still being able to make a balanced assessment of government projects isn’t an easy task. But Nilekani, after a failed short journey in politics, knows how to get that balance right and draw a fine line between politics and technology, even if he is speaking on Aadhaar and Right to Privacy.

Whether it’s initiating the world’s largest biometric programme — Aadhaar — under the Unique Identification Authority of India (UIDAI) as chairman, rejoining Infosys to lead it amidst plenty of controversies, or fighting from Bengaluru South against BJP in 2014 at the height of the ‘Modi wave’, it’s hard to say, Nilekani has ever chosen easy jobs.

In many ways, his direction for UIDAI and Aadhaar has shaped the modern digital infrastructure in India for the last 10 years.

And Nilekani spoke about this phase at length while addressing the FICCI National Executive meeting on April 22.

“In the last decade, we have seen a huge change in terms of consumer products and services capabilities. This has been possible due to the Aadhaar-enabled infrastructure that we had created in 2009. A 21st-century innovation, Aadhaar is an online ID which allows identification and verification (in certain cases) by simply using fingerprints,” said Nilekani.

The ‘Aadhaar’ Of Modern Digital Infrastructure  

In December 1991, former Prime Minister PV Narasimha Rao, otherwise a staunch socialist, provided a safe passage for then finance minister Manmohan Singh to initiate and implement liberalisation measures in the Indian economy.

In 2009, however, as Prime Minister, Singh failed to provide adequate legal safeguards to the ambitious Aadhaar project, for which he appointed Nilekani as the chief. Soon, the Aadhaar project was hit by legal roadblocks. The 77th report of the Parliamentary Standing Committee (PSC) on Finance disapproved Aadhaar project on several counts.

Despite political and bureaucratic pressure, Nilekani completed his mission which was to disburse 600 Mn Aadhaar Cards by March 2014. The Aadhaar-enabled delivery services under the tagline ‘Aapka Paisa, Aapke Haath’ used Aadhaar authentication services for direct-benefit transfer (DBT).

However, Aadhaar infrastructure has evolved over time to become a key to unlock digital transactions as well.

“Based on Aadhaar, we have been developing a host of solutions under India Stack to utilize this unique digital Infrastructure and solve India’s hard problems,” said Nilekani.

Giving an example of how Aadhaar changed the way of KYC authentication, he said, earlier, KYC involved lots of paperwork and used to be a cumbersome process. However, the Aadhaar-enabled infrastructure helped pave the way for online authentication. For instance, you apply for a loan online and get it instantly. This became possible due to Aadhaar authentication.

Nilekani said that in the banking and telecom sector customer acquisition has been dramatically streamlined and the process has sped up because of eKYC. Aadhaar-enabled authentication was used 1.2 Bn times per month in 2018.

“Today, we have over a billion bank accounts are linked with Aadhaar out of which are over 600 Mn unique bank accounts. This provides a basis for DBT — direct benefit transfer. India currently runs the biggest DBT system in the world. Whether it is MGNREGA, KISAN programme (KISAN Samman Nidhi Yojana announced by the ruling government in the Interim Budget 2019) or NYAY scheme (proposed by Congress Party in their Election Manifesto), the underlying technology for these DBT remains Aadhaar,” – Nilekani

Explaining how DBT helps strengthen the market, Nilekani said, DBT unlocked the subsidies extended on various products. For instance, now gas cylinders (refill) are sold on market prices and the government is able to transfer the subsidy benefits electronically to its real beneficiaries’ bank accounts. This means that the producers of the subsidised products need not worry about the subsidies.

This has helped shore up the market which was highly subsidised.

What we have seen in the last decade is the dramatic transformation in terms of identity authentication, KYC, Payments, FASTag and the architecture for data.

Does Aadhaar Violate One’s Right To Privacy?

While Nandan Nilekani talked mostly about Aadhaar benefits, the questions around Aadhaar data leaks and privacy remain a major concern even after the Supreme Court’s landmark judgement on Aadhaar.

Responding to the controversies, Nilekani said the Aadhaar case in Supreme Court was fought on multiple dimensions. It was the second longest running case in Indian legal history after Keshwanand Bharti ( Vs State of Kerala).

On the privacy issue, Nilekani said, “The privacy argument is beyond Aadhaar, in a sense that mobiles or cellphones, your social media also come in the privacy purview. However, privacy is something that must be taken into cognisance and we should be concerned about it.”

“We have to make sure that both legally and technologically, we have as much protection as possible. Because it’s across the board and it is going to be more and more. The Aadhaar problem is more acute where organisations are collecting data on you. Aadhaar is not a great candidate here as all it is doing is issuing a virtual ID and doing the verification. Having said that one of the biggest concerns was that if Aadhaar becomes ubiquitous, and is used in multiple applications, somebody can combine all those databases. However, this issue has now been resolved with tokenisation/virtual IDs.”

“Also, thanks to Aadhaar, at least we have a debate on privacy now. It’s Aadhaar which led to the question of whether Indians have a fundamental right to privacy or not!”

Whether Aadhaar could be used for surveillance purposes, Nilekani said privacy is different from surveillance. When it comes to surveillance, there are a host of applications and devices such as mobile phones which pose a bigger threat than the Aadhaar does, he added.

GST: The Federal And Standardised Structure Of Taxation

If Aadhaar has been instrumental in bringing transparency and efficiency into government services being delivered to a large section of the population, Goods and Services Tax (GST) has brought the same to India’s taxation system.

Nilekani who was also a strategist in creating the GST blueprint said, “GSTN is a great example of technology-led cooperative federalism. Earlier, we had the centre levying various taxes such as central excise duty, services tax, CST (interstate sale of goods tax), etc and state governments levying taxes on retail sales (VAT), entry of goods in the state (entry tax), luxury tax, purchase tax, etc. While the central government had CBDT and CBIC, state governments used to have VAT Commissioners. The two were not connected. In addition, all the states had a different mechanism. Some were more paper-based, some were partially-digital.”

The Goods and Services Tax Network (GSTN) is a unique non-profit non-government company, which provides a shared IT infrastructure and service to both central and state governments including taxpayers.

“With this (GST), the entire tax system is not only on one platform but it is completely homogenised. This is federalism. The process is now the same across all the states.”

Among the 13 Mn GST payers, 6-7 Mn are B2B and 5-6 Mn are B2C. A large number of small businesses have been kept out of the ambit of GST owing to its cutoff. According to Nilekani, the benefit of GST is not just about paying tax but also about having a digital footprint which might help you get credits. It will motivate more people to come, he explained.

FASTag: Electronic Toll Collection

Not only Aadhaar, but Nandan Nilekani has also been instrumental in India’s digital transformation in the transport sector as well in the form of FASTag electronic toll collection.

Recalling how RFID tags revolutionised India’s toll collection across the country, Nilekani said, when Kamal Nath was the minister for Road and Transport (2009-2011), there was this question that how do we create a standardised way of electronic toll system for the country. Nilekani’s team came up with the report on how RFID tags could be used and it was implemented by the government. Today, we have a company — Indian Highway Management Company which operates the RFID tolls booths

IHMC runs nation-wide Electronic Toll Collection (ETC) programme, implementing a unified and interoperable ETC solution for National Highways in India based on RFID technology.

The ETC programme further aims to serve as an open platform for the development of services like congestion or cordon pricing, collection of parking fees, automated collection of fines/challans by police authorities, payment of road tax and other duties and a slew of other services.

“Today, 25 Mn transactions occur on FASTag, a month. The beauty of FASTag is that one’s wallet/account is attached with the tag and therefore, the infrastructure could be used for numerous other purposes too. For instance, the RFID tag works as an ID for the vehicle and this could also be used for dynamic parking,” said Nilekani.

India Imagined And Rebooted

Speaking of how India’s digital payments especially UPI changed the payments landscape, Nilekani stated, “UPI has been one of the best payments systems which are real-time, any mobile phone to another mobile phone, any bank account to any bank account. People across the world are talking about this unique way of payments.”

“UPI came into success in October 2016, one month before demonetisation. The UPI transactions were 100K a month then and in the last month, it was 800 Mn transactions. Imagine the scale of growth in less than two years,”

With all these digital transformations, Nilekani concluded, India is today in a unique position, having created an architecture where data empowers people and businesses. It’s not just about companies making money from data or the government, but individuals benefiting equally from the data. This architecture is called data empowerment and protection architecture. The architecture itself is sector-agnostic, Nandan Nilekani stressed. While the first application was the financial sector, it can be used for healthtech and other sectors.

Author

Suprita Anupam

Inc42 Staff

An Electronics Engineer turned Business Journalist | Blogger | Avid Reader. Previously associated with Network18, Clean India Journal and Mudra Communications, he has been writing on a variety of issues that include cryptocurrency, policy-related matters, blockchain, investments-destination, technology and other startup-related matters.

Responses
https://inc42.com/buzz/niti-aayog-oil-ministry-ev-charging-stations/
Loading Next…