Recently, the Global Digital Compact (GDC) was adopted at the UN Summit, signalling a collective commitment by 193 UN member states to enhance digital governance. This landmark agreement aims to ensure that technology serves all segments of society, particularly in the Global South. The GDC builds on the Universal Safeguards for Digital Public Infrastructure (DPI), initiated in 2023, which promotes equitable technology deployment.
About Digital Public Infrastructure (DPI)
Digital Public Infrastructure refers to the foundational digital systems that facilitate various services, from financial transactions to public administration. India has emerged as a leader in this domain, exemplified by its Aadhaar programme, which is the world’s largest digital identity system. The unprecedented growth in digital payments, with over 14.96 billion transactions recorded in August 2023 alone, puts stress on the transformative potential of DPIs.
Global Initiatives and Influences
The World Bank’s ID4D initiative supports nearly 60 countries in developing their identity systems. Additionally, India’s Modular Open Source Identity Platform (MOSIP) collaborates with 11 nations to enhance digital identity frameworks. These initiatives reflect a growing global recognition of the importance of DPIs in encourageing economic development and financial inclusion.
Impact on Financial Inclusion
Evidence suggests that DPIs have improved financial inclusion in India. The percentage of adults with bank accounts surged from 25% in 2008 to over 80% in recent years, with women holding 56% of these accounts. Digital transactions now account for nearly 50% of India’s nominal GDP, facilitating easier access to credit through pre-sanctioned loans via UPI (Unified Payments Interface).
Challenges in Impact Assessment
Despite these advancements, assessing the true impact of DPIs remains complex. The lack of granular data on socio-economic backgrounds and user behaviour complicates efforts to link DPIs to tangible outcomes, such as income growth or improved livelihoods. Many existing metrics, while helpful, do not adequately capture the nuanced effects of these digital systems.
Importance of Intersectional Data
Intersectional data is crucial for understanding how various demographic factors, such as gender, income, and education, influence outcomes. For instance, quantifying the impact of UPI on the financial independence of rural women requires detailed data that is often lacking. Systematic, data-driven assessments are essential to move beyond anecdotal evidence and ensure that DPIs benefit all segments of society.
Proposed Framework for Impact Assessments
To enhance the effectiveness of DPIs, a framework based on the “3Ds” is proposed – design, data, and dialogue. First, impact assessments should be integrated into the design of DPIs, ensuring systems can collect relevant data. Second, data should be made available through trusted mechanisms to facilitate accurate assessments. Finally, encourageing dialogue among stakeholders, including policymakers and civil society, will promote participative governance and accountability.
