Imagine a world where accessing healthcare, education, and financial services is as seamless as sending a message on your smartphone. Digital Public Infrastructure (DPI) is the backbone of this vision – a transformative framework of interoperable, scalable, and inclusive digital systems that empower governments and citizens alike, driving innovation, equity, and sustainable development on an unprecedented scale.
Expanding DPI globally is crucial for fostering economic growth, promoting inclusive development, and enhancing governance. Widespread adoption of DPI can position countries for equitable progress and increased global competitiveness. Low and middle-income countries (LMICs) often hesitate to invest in DPI due to perceived high costs and weak political will. However, substantial evidence shows that the benefits far outweigh the expenses, making DPI a crucial investment for sustainable development and economic growth. For instance, investing in digital ID systems alone can unlock economic value equivalent to 3–13% of GDP,[i] with an average improvement of 6% for emerging economies.
India’s experience with DPI highlights its transformative potential. Arvind, an old-age pension recipient, can now withdraw his pension from his bank account without leaving home. Vijay can access and store his educational certificates using DigiLocker on his phone. Sarita, a garment factory worker, pays her children’s school fees with the click of a button through UPI (Unified Payments Interface). In January 2023 alone, eight billion such transactions, worth nearly $200 billion, were conducted, involving 300 million people and 50 million merchants – a remarkable feat for a country that relied on cash for 90% of transactions just a few years ago.[ii][iii] This rapid advancement in India’s DPI facilitated the creation of products and services that benefit the population at scale.
The key pillars of DPI include its identity system, which allows businesses and individuals to verify their identities, payment systems that enable easy money transfers, and data exchange frameworks that facilitate seamless data flow across government and private sectors. Using DPI, India has digitized and reengineered its programs on food security, agriculture, financial inclusion, gender equality, citizen services, and overall service delivery. However, when the Aadhaar project (biometric based digital identity) was launched in 2014, the Indian government faced significant backlash due to the project’s massive costs. Critics raised concerns about privacy, data security, and the potential misuse of personal information. Privacy advocates argued that the extensive collection of biometric and demographic data posed significant risks if not managed with robust safeguards, potentially allowing unauthorized access or surveillance. There was also the risk of breaches in data security, where sensitive personal information could have been exposed due to vulnerabilities in the system or cyberattacks. Additionally, the potential misuse of this data raised questions about oversight, accountability, and the delicate balance between national security and individual rights.
The substantial financial outlay was also questioned, especially in a country with pressing needs in healthcare, education, and infrastructure. Despite these concerns, India’s investment in the Aadhaar digital identity project has demonstrated significant advantages. It is streamlining service delivery, reducing corruption, and improving access to welfare programs for millions. For instance, it has saved $41 billion for the government by deleting fake, non-existent, or ineligible beneficiaries from government welfare schemes alone. Investments in DPI have significantly increased government revenues, adding 8.8 million new taxpayers between 2017 and 2022.[iv]
Aadhaar shows that by investing in DPI, LMICs can drive economic growth, enhance governance, and improve public services. Building a strong political will to prioritize such investments can transform economies and uplift populations, demonstrating that the long-term gains justify the initial expenditure. Research by the World Bank Group’s G2Px initiative during the COVID-19 pandemic revealed that countries with digital databases and data exchange platforms reached 51% of their population with cash transfers, compared to just 16% in countries without such infrastructure.[v] This underscores the crucial role of DPI in effective crisis response and strengthening social protection systems.[vi]
India’s digital identification program was custom-built, owned, and operated by the Indian identification authority. This approach requires high capacity, and a procurement- and capital-expenditure-heavy approach with long lead times. Countries adopting this model must have strong institutional capacity, a mature ecosystem, and the ability to generate political will. Procurement is usually complex, timelines long, risks high, and the investment required to build local technical and implementation capacity. While most countries are keen to adopt DPIs similar to what India has done, countries with smaller populations might need to explore other options to rapidly deploy and scale these DPIs. Such countries can build their DPIs using open solutions like MOSIP and Mojaloop.[vii] MOSIP offers a scalable, interoperable, and cost-effective identity management system customizable to a country’s needs. The Philippines, for instance, is implementing MOSIP to enhance its national ID system. Similarly, Mojaloop, designed for financial services interoperability, is adopted by countries like Tanzania to facilitate inclusive digital financial services, enabling seamless transactions across different platforms. These examples illustrate how open solutions can help countries develop efficient, inclusive, and sustainable DPIs.
Much of what is required to build core DPIs is available as a set of open-source assets or digital public goods (DPGs). These include the source code, specifications, standards, and protocols that make up the underlying infrastructure of these systems, as well as the legal documentation, governance models, and other artifacts necessary for implementing and rolling out DPIs. In conclusion, investing in digital public infrastructure is essential for LMICs. The benefits of such investments – ranging from economic growth and improved governance to enhanced public services – far outweigh the costs. By leveraging open solutions and prioritizing DPI, these countries can unlock significant value and drive sustainable development. The tools and resources are within reach – what’s needed now is the determination to put them to use. Building DPI isn’t constrained by a lack of money; it’s about finding the vision, leadership, and commitment to make it happen. The path is there, but countries must summon the will to walk it.
[i] “Digital ID: A Key to Inclusive Growth | McKinsey,” accessed February 6, 2025, https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/digital-identification-a-key-to-inclusive-growth.
[ii] Douglas Blakey, “India: Shift from Cash to Electronic Payments Gathers Pace,” Electronic Payments International (blog), February 28, 2023, https://www.electronicpaymentsinternational.com/news/india-cash-displacement-gathers-pace/.
[iii] Douglas Blakey, “India: Shift from Cash to Electronic Payments Gathers Pace,” Electronic Payments International (blog), February 28, 2023, https://www.electronicpaymentsinternational.com/news/india-cash-displacement-gathers-pace/.
[iv] “GST: 3.5 Billion Invoices Every Month! All about the Technology That GST Will Bank on from July,” accessed February 6, 2025, https://economictimes.indiatimes.com/news/economy/policy/3-5-billion-invoices-every-month-all-about-the-technology-that-gst-will-bank-on-from-july/articleshow/58907708.cms?from=mdr.
[v] “The COVID-19 Crisis Showed the Future of G2P Payments Should Be Digital. Here’s Why.,” World Bank Blogs, accessed February 6, 2025, https://blogs.worldbank.org/en/voices/covid-19-crisis-showed-future-g2p-payments-should-be-digital-heres-why.
[vi] “Social Protection, Labor and Employment: Overview,” Text/HTML, World Bank, accessed February 6, 2025, https://www.worldbank.org/en/topic/socialprotection/overview.
[vii] MOSIP, “Home,” MOSIP, accessed February 6, 2025, http://prod-website-903390823.ap-south-1.elb.amazonaws.com/.