Digital public infrastructure: Aadhaar, UPI and open networks

Digital public infrastructure means the shared digital rails that anyone can build on: a way to prove identity, a way to pay, and a way to share data with consent. India's best-known example is the combination of Aadhaar, bank accounts and mobile phones, often called the JAM trinity. The Jan Dhan programme of 2014 expanded bank accounts, Aadhaar provided a biometric identity, and mobile connectivity let people use both. On top of those rails, services from subsidies to payments could be built without each provider creating its own identity or payment system.

The Unified Payments Interface, UPI, is the payments rail. Developed by the National Payments Corporation of India, it was launched on a pilot basis in April 2016 and rolled out to the public in August 2016, with the BHIM application following in December 2016. UPI lets a person send money instantly between bank accounts using a phone number, QR code or payment address, without sharing bank account details. Because it is interoperable, an app from one provider can pay a user of another, which kept the market competitive rather than locked into a single wallet.

Direct benefit transfer shows the governance use. Subsidies and pensions can be sent to a beneficiary's bank account linked to Aadhaar, reducing intermediaries and duplicate or ghost beneficiaries. Supporters credit the system with large savings and faster delivery; critics note exclusion errors, where a fingerprint mismatch or a bank account problem delays a payment to a person who needs it, and they argue that savings claims should be audited rather than assumed. Both points matter: a system can reduce leakage and still exclude some genuine beneficiaries.

Open networks are the next step. The Open Network for Digital Commerce, ONDC, aims to let small sellers list their goods on a shared network that any buyer app can reach, rather than depending on a single large marketplace. DigiLocker, launched in 2015, lets citizens store and share verified documents digitally. The common idea is that the government builds the rails and the rules, while private firms compete on services above them.

The risks are concentration of data, fraud, and dependence on connectivity and electricity. A digital system that works well in a city with strong networks may fail in a village with weak coverage, so offline options, assisted access and grievance redress remain essential. Digital public infrastructure is therefore best judged by inclusion: whether the poorest users can use it safely, cheaply and without help from intermediaries who might exploit them.