On the side-lines of the 2023 Spring Meetings of the World Bank and the International Monetary Fund (IMF), an IMF Seminar held on the theme, “Digital Public Infrastructure [DPI]: Stacking Up the Benefits,” on April 14, 2023, discussed India’s advancement and achievements on DPI and important lessons the world can benefit from its digital innovations.
Her Majesty Queen Máxima of the Netherlands, India’s Minister of Finance, Nirmala Sitharaman, Managing Director of IMF, Kristalina Georgieva, Co-chair, Bill & Melinda Gates Foundation, Melinda Gates, Co-Founder and Chairman, Infosys Technologies Limited, Nandan Nilekani, and President and CEO, PayPal, Dan Schulman participated in the seminar, which was moderated by Anchor, CNN International, Julia Chatterley.
Appreciating Queen Máxima and Minister Sitharaman for their participation in the seminar, Georgieva said, “I’m very deeply touched that Queen Máxima has… come again to the IMF to talk about digital infrastructure and the role it plays to promote deeper financial inclusion, a topic that Her Majesty has championed for years,” adding she was “equally very, very grateful to Minister Sitharaman. India is a shining light in this area, and I could not be more excited to have a chance to hear from you about India’s experience.”
Noting the importance of financial inclusion and DPI’s role in enabling access to resources and opportunities, Georgieva commended efforts by both Queen Máxima and Sitharaman. “But it is not going to happen without concerted attention and effort, and Queen Maxima as the United Nations (UN) Secretary General’s Special Advocate for Inclusive Finance for Development has been marshalling to the world in the right direction,” she said. “And secondly, to say that when we discuss this topic, it is so much more effective not to talk only about the things we aspire to do. But to talk about the things we have actually done, and who is better but Minister Sitharaman to talk about the things that are actually done.”
In her opening remarks, Queen Máxima while reminding everyone that “These are challenging times for the world economy and people living in emerging markets are being hit particularly hard,” highlighted, that as the UN Secretary-General’s Special Advocate, in the past decade, she has witnessed “how inclusive DPIs can have a transformative impact on even the poorest households and businesses.”
She said DPIs helped deliver welfare straight to digital wallets, and exemplified India. “India has shown one way with India Stack. It combines foundational digital ID, an interoperable payments system, a digital credentials ledger, and account aggregators to support empowerment and protection. The results have been dramatic: India has achieved over 80 per cent financial inclusion in just six years – compared to the 46 years it would have taken without a DPI approach. So, six years versus 46 years.”
In her role as the Honorary Patron of the G20 Global Partnership for Financial Inclusion, Queen Máxima said, “I am really delighted that we are crafting policy recommendations for DPI under the Indian Presidency.”
Underscoring the importance of DPI, Sitharaman, recalled, “In India, during the last couple of years, we have seen how DPI can contribute to targeted, quick and efficient and inclusive service delivery through innovative methods developed by both public and private sector initiatives,” adding “digital payments and consent based data sharing has helped us to improve our governance, bring ease of doing business, and enable ease of living for our people.”
Pointing out to India’s 462.5 million low-cost bank accounts with 56 per cent women account holders, Sitharaman noted, “This has enabled us to transform the garment service delivery by building the world’s largest [DPI based] direct benefit transfer systems…” helping 650 million people receive $322 billion directly into their accounts, and ultimately resulting in $27 billion of overall savings across key government services and initiatives.
“The interoperability of DPI, as in the case of India, allows for multiple solutions to be developed for promoting inclusion. For instance, the UPI [Unified Payments Interface] our payment system is used not only for smartphones, but also feature phones by just dialing a *99# or in assisted mode, with no phone at all,” Sitharaman said. “As a result, UPI transactions are increasingly rapidly moving forward. Today, more than 68 per cent of total payments are made through UPI in India in March 2023. In just March 2023, alone, India has witnessed 8.7 billion UPI transactions and overall growth of 82 per cent in financial year 2022-23 over the previous year.”
Nilekani said, a digital ID, bank account, and a smart phone are three key tools for the New World. About India’s digital transformation that started a decade ago, Nilekani said “Well, I think Digital Public Infrastructure is actually a philosophy and a belief that technology can actually transform a society, can improve our lives, can do financial inclusion, then can create economic growth in a more equitable manner.”
Calling Prime Minister Narendra Modi and Sitharaman as “Digital First Ministers” Nilekani said, “when they look at a public policy issue, they say, can we do this digitally? And that’s how companies think how to be digital. First, we have governments thinking about that. So that’s a big part of the success of the Indian model,” while crediting the political will for India’s success.
Gates credited DPI in helping weather COVID related economic shocks in India. “If you’re a woman in society, when you get money in your hands, it’s power, money is power. And it changes everything in your household. And so I have met women all over the world, in Tanzania and Kenya and India and Bangladesh who say everybody in my household looks at me differently when I have money…” Gates said. “We’re actually finally talking about power and societal change. And I think as was said, well from the minister [Sitharaman], yeah, it brings in so many people who are on the margins of society to now participate in economic opportunity.”
Schulman, when asked about his view of DPI from a private sector point of view, said “All of our lives are digitizing rapidly, whether it be payments or any other form of our lives…” adding “And so I think the private and public sector need to come together here. We need to have an infrastructure that we can build on. It needs to be interoperable. And that’s an issue that I think we all need to think about because one country building a digital infrastructure that doesn’t have the same standards or regulations aligned with other countries makes it very difficult for the private sector…”