Digital India: Aadhaar, DigiLocker, China & Business Opportunity - Protean | FO400 Raj Shamani

This episode features Suresh Sethi, the Managing Director and CEO of Protean eGov Technologies Limited. Protean is a company that plays a significant role in building India's digital infrastructure, including systems like Aadhaar and DigiLocker. Sethi shares insights on how India's approach to digital solutions differs from countries like the US and China, discussing the evolution of India Post, the importance of digital identity, and the implications of the new Digital Personal Data Protection (DPDP) Act.

The Evolution of India Post and Digital Infrastructure

Suresh Sethi highlights the enduring trust associated with India Post, even as its role has evolved. While urban areas see fewer postmen due to changing living conditions, the trust in villages remains strong. Historically, postmen were not just delivery personnel but also trusted individuals who helped people write and read letters. This deep-rooted trust is a valuable asset.

Protean's work with India Post, particularly in establishing the India Post Payments Bank, involved extensive training for its vast network of postmen. Equipping them with smartphones and biometric devices transformed them into mobile banking agents, extending financial services to the last mile. This initiative successfully converted a physical infrastructure into a digital public infrastructure, bringing financial services to every village and person.

Digital Public Infrastructure: India's Balanced Approach

Sethi explains India's unique approach to Digital Public Infrastructure (DPI). Unlike the US, where much of the digital infrastructure is privately owned, or China, where it's government-owned, India strikes a balance. The government builds the foundational 'rails' (infrastructure), and private entities build applications on top of these rails for citizens to consume services.

This approach ensures equitable access, affordability, and availability, which are key principles for DPI. Sethi uses the example of national highways, which are built by the government and accessible to everyone, including cyclists and bullock carts, with affordable tolls. This contrasts with purely private infrastructure that might cater only to a select few.

Key Takeaways

• India's digital infrastructure approach balances government-built foundations with private sector innovation.
• Digital Public Infrastructure (DPI) prioritizes equitable access, affordability, and availability.
• Protean's journey began with digitizing capital markets and has expanded to various sectors like taxation, pensions, and digital commerce.
• Digital identity, like Aadhaar, is crucial for financial inclusion and accessing services in a digital ecosystem.
• Data privacy is paramount, with frameworks like the DPDP Act giving individuals control over their personal data.
• Open Digital Ecosystems (ODEs) like ONDC aim to democratize access for buyers and sellers, similar to how UPI revolutionized payments.
• India's digital solutions have global applicability, with opportunities in developing nations like those in Africa.

Protean's Role and Vision

Protean, formerly NSDL, started in 1995 as the first central securities depository, aiming to digitize the paper-based capital markets. This transformation, including the dematerialization of share certificates, was a significant step towards efficiency and scalability.

Over the years, Protean has diversified, working on national-level platforms for taxation, pensions, and digital identity solutions like Aadhaar, e-sign, and e-KYC. The company now powers enterprise digitization and open digital ecosystems across various sectors, including agriculture, health, education, and digital commerce through initiatives like ONDC.

Protean handles over 14,000 transactions per minute, operating largely behind the scenes. The company's resilience was evident during the COVID-19 pandemic, where its digital infrastructure continued to function, enabling essential services and transactions when physical systems were halted.

In 2021, Protean rebranded from NSDL to Protean, signifying its expanded scope and adaptability to new technologies and sectors. The name 'Protean' reflects agility and forward-thinking, aligning with the company's mission to contribute to India's digital economy and potentially take its DPI approach to the global stage.

Understanding Digital Services: DigiYatra and DigiLocker

Sethi clarifies the functionality and security of services like DigiYatra and DigiLocker.

DigiYatra uses verifiable credentials and facial authentication to streamline airport processes. It links a boarding pass to a person's identity, allowing for a seamless entry without human intervention. While the system itself doesn't require extensive personal data beyond what's needed for verification, the DPDP Act ensures individuals have control over how their data is used.

DigiLocker, on the other hand, doesn't store documents directly. Instead, it acts as a pointer, providing access to documents issued by various authorities. This means documents remain with their original issuers, and DigiLocker facilitates secure access through these pointers.

The Importance of Aadhaar and Data Security

Aadhaar is presented as a foundational element for digital identity, crucial for financial inclusion and accessing services. It provides a verifiable identity for individuals who might otherwise lack formal identification, enabling them to open bank accounts and access credit.

Regarding security, Sethi notes that while there have been reports of attempted breaches, the Aadhaar database itself contains limited personal information. The real risk lies in how other data points are linked to Aadhaar, potentially creating a more comprehensive profile. Protean's focus on security is ingrained in its DNA, driven by the sensitive nature of the data it handles.

Opportunities in Digital Transformation

Sethi identifies several sectors ripe for digital transformation, including digital commerce through platforms like ONDC. ONDC aims to create an open network where buyers and sellers can discover each other, democratizing access and breaking the dominance of large platforms.

He also discusses the potential for India's DPI model in developing economies, particularly in Africa. While each country has unique challenges and levels of digital maturity, India's experience in building inclusive digital infrastructure provides a valuable blueprint. Protean's 'DPI in a box' approach offers modular solutions that can be adapted to local needs, as seen in projects in Morocco and Ethiopia.

For aspiring entrepreneurs, Sethi advises looking at emerging trends like AI and how they can be applied to solve real-world problems, especially within the context of digital public infrastructure. Understanding local culture and partnering with local entities are key to success in these markets.