Digital public infrastructure

Digital public infrastructure, or DPI, means shared national digital systems that any government office or company can build its own services on. India's best-known examples are Aadhaar for identity, UPI for payments and DigiLocker for documents. Together, they are often called India Stack. Each one is built once, for the whole country, and run by a public institution: a government body, or a not-for-profit company set up for the purpose.

Here is how it works in general. A public institution builds one system, with open rules that anyone may follow. For example, UIDAI, a government body, runs Aadhaar. NPCI, a not-for-profit company set up by the RBI and the Indian Banks' Association, runs UPI. The system offers APIs, ways for other software to use it. A bank, an app or a government office connects to these APIs, instead of building its own identity check or payment system. The citizen then meets the same system inside many different services. A new company can start with identity, payments and documents already working.

Why build it this way? Before DPI, every bank and every office built its own systems, and they could not talk to each other. A shared system is cheaper for each user, and it works the same way everywhere. It also lets small companies compete with large ones, because none of them has to build the base layer.

Take, for example, a lender opening an account on a phone. It can confirm the customer's identity through Aadhaar, as part of KYC, in a few minutes.

Consider a person signing a rental agreement. E-stamping lets them pay the stamp duty online instead of buying stamp paper.

Say a borrower wants to share their bank statement with a lender. The account aggregator system carries the data from the bank to the lender, with the borrower's consent.

Cities use the same idea. In many Indian cities, paying property tax online runs on an open platform for city services, built by a nonprofit with the government. Health records are being linked through the ABHA health ID.

How is DPI different from digital public goods? DPI is a running system that a country operates for its people, such as UPI. A digital public good is open software, open data or an open standard that anyone may use, change and share for free. Another country can take a digital public good and run its own DPI on it.