To explore the transformative impact of DPI, AI, and the nation’s journey toward development, CNBC-TV18 engaged with key leaders in the field: Dilip Asbe, MD & CEO of NPCI; Amit Agrawal, CEO of UIDAI; T Koshy, MD & CEO of ONDC; Sumit Borar, Head of AI/ML at Gpay; Yashoraj Tyagi, CEO of CASHe; Deep Narayan Mukherjee, Partner of Risk Management & Data Science at BCG; and Nitin Chugh, DMD & Head of Digital Banking at State Bank of India. Together, they discussed the future of digital infrastructure and its role in India’s development.
Below are the excerpts of the discussion.
Q: We’ve seen the Aadhaar develop over the years. We’ve, of course, seen UPI, ONDC, but start by telling what you believe have been some of the most transformative steps as far as the architecture for DPI and artificial intelligence (AI) in India is concerned?
Agrawal: DPI is now common usage, but back then that term was not there, and there was only an idea, and the idea was a unique ID. And the term came much later. In UIDAI, I find my team also using the term foundational ID. Basically a foundational ID is one ID for every citizen and one ID for every use case. And therefore it is inherently minimal, inherently limited. And how do you design something like that which will work for everything, but at the same time not be customised for everything? And then, of course, it’s also privacy preserving, another thing. So the design and the architecture is the heart of it.
It’s true that both DPI and AI are factors of production, and in their impact, they can increase productivity, efficiency, all of those things, but in one fundamental way, they are different. And they are different by design in the sense that DPI was always intended to be inclusive. DPI was India’s unique way, the Indian state’s unique and consistent way of saying that instead of digital device divide, I shall have a policy stance where I will ensure that the benefits accrue equally to all. So it was population scale. It was inclusive. Now once that is the technology, what does it mean for businesses? What it means for businesses is whatever fruits will accrue out of a DPI will be equally available. If NPCI and team are doing something, they will worry about making sure every bank benefits, every NBFC benefits, every payment aggregator benefits, AI is not the same.
AI is potentially disruptive. On the deposit side, it can be hyper personalisation on the credit side, if you create a underwriting engine which gives you a huge competitive edge, a business entity that on boards it, and a business entity that does not there could be disruptive effects, and that is something people need to consider.
So in UIDAI our team and Dilip Asbe’s team in NPCI and elsewhere, they are trying to onboard AI onto system so that the benefits accrue equally to all. For the larger ecosystem, government has got the India AI Mission, the seven pillared thing, which is open not just to government entities, equally to individual banks and everybody. It too has everything to offer. But end that of the day, individual business entities will have to make investment choices. And that is, that is my key takeaway.
Q: What to your mind has been the most transformative impact of DPI as someone who’s built UPI, the hero of India’s payment story, now going global?
Asbe: DPI is a new term which India has given back to the world of a new model of business transformation in that sense, and the democratisation of the technology, making it available back to everybody. The evolution has been really fascinating. It started back with Aadhaar since 2009 and then NPCI looked at some of the platforms, like UPI and Bharat Billpay and the IMPS and other platforms. I think the whole journey has been an evolution.
When UPI was started in 2016 and UPI right now is fairly different. So, NPCI, banks, fintechs work together to create a vibrant ecosystem, and under the guidance of the RBI and the government, we have been able to evolve. I think that’s a that’s a great story till now. Goes without saying that now the AI battle worries, and it has a positive and a negative impact both.
It’s not that India has not seen technology battles. India has seen large technology battles moving back from proprietary hardware to the open hardware, proprietary software to the open source software. But I think this AI battle is little bit different than what we have seen before.
Q: ONDC has 14 million transactions as of October 2024, which is a 200% jump from the same period last year. How many sellers and service providers do you now have registered on the platform? Let’s say I’m a small retailer, a seller who’s on the ONDC network. What are the services that I can avail of today? What is the sort of transformative power that the DPI of ONDC brings in my life?
Koshy: Among all the people sitting here, I’m the youngest kid in town, not by age, but by heading the youngest DPI that India has produced. ONDC started last year, and we made it available to the public at large, in Bangalore City only in 2023 January and last year, this time, we did 4 million transaction. This year, we did 14 million transaction. So it is 3.5x growth, but still we are very, very small.
What is the idea of ONDC? We are building on what Aadhaar did – giving an ID to everybody, UPI made payment smooth. Now, we are saying that we are making commerce democratic. So if I just simply say, the way the commerce has grown anywhere in the world is that they become walled gardens, which means that it is in the best interest of the shareholders of few companies who are maximising your interest by creating what we call the walled garden. If I give an example for the physical infrastructure. When East India Company was here, they set up the first rail track, but they meant to maximise their interest. It was not a public infrastructure. When India became independent, we said this has to be a public infrastructure on which we need to let the business and the citizen build on it and change the country. So that’s exactly what we are doing at ONDC. We are creating the digital roads and rails so that it becomes inclusive, both on the sell side and the buy side. If you look at the digital commerce I’m sitting here, all of us are heavy users, but what’s a penetration? Less than 10% on the buy side, on the sell side 5%.
In each domain, you have some behemoths becoming bigger and bigger. So the open protocol, allows you to unbundle, gives everybody an opportunity to be there, represented in the market on its own merit, without being restricted with respect to market access, credit information, access everything being subservient to the intermediary. So that’s the whole idea.
Watch accompanying video for entire discussion.
