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Will tech help India leapfrog in 2020?

The growth of both DigiLocker and eSign are also a testimony to how business processes have become much simpler.

Recalling the Citizenship Amendment Act (CAA) isn’t the best way to ring in the new year given how CAA-NRC-NPR protests tore into India’s social fabric. The purpose of this, however, is that when PM Narendra Modi addressed CAA at Ramlila maidan, the police used Automated Facial Recognition System (AFRS) to screen the crowd. AFRS probably violates privacy laws and recalls the all-seeing Chinese state, but this is one of many new technologies that will get traction in 2020.

While many despair of the government’s sluggishness in fixing the collapsing economy, the good news is India’s tech future looks less iffy and, given its momentum, this can help alleviate some of India’s pressing problems. Tata group chief N Chandrasekaran argues that ‘bridgital’ will help create 30 mn jobs by 2025 and, more important, give over 200 mn citizens better access to services like health and education. India needs 0.6 mn doctors, 2.5 mn nurses, 1 mn teachers, etc; digital technology will help bridge this gap.

India’s flourishing start-up ecosystem—India has the third largest number of unicorns in the world, and this is projected to rise four-fold by 2025—is also focused on societal problems. Of the 9,000-odd startups founded in the last five years, 1,050 are healthtech and 20 agritech; 18% of startups leverage AI, blockchain, BigData, robotics, etc. The Aadhaar Stack, and over the next 5-10 years, the Health Stack, show the startup ecosystem is not just focused on copying US business models in the way Flipkart’s founders copied Amazon.

The India Stack was about apps that built upon Aadhaar—DigiLocker, eSign etc—and provided facilities that, in the past, were simply not available to citizens. NPCI’s UPI has emerged as a world-beater in terms of payments transfers (even Google and BIS,, are recommending it to the US Fed and other central banks); India adopted a four-pillar approach of providing digital financial infrastructure as a public good, giving private players open access to this, regulating a level playing field, and ensuring individual consent needed for data-sharing. Within just 40 months, merchant payments via UPI outstrip debit and credit cards that have been around for decades by a third.

That is just the beginning of the UPI—and India’s start-up—story. At the FE IT Awards ( panelists pointed out, India’s fintechs are using UPI and other data—from merchant sales through Amazon/Flipkart, and soon GST—to create a wealth of data so as to lend to SMEs who, traditionally, find it difficult to get loans from banks. Millions of customers, two bankers on the FE panel said, are already benefitting from lower-cost loans thanks to the use of AI and machine-learning in financial services. All of this is happening today, it is not a possible idea in the future depending on whether the government does this or that; within a few years, as credit-starved India gets more formal credit, the boost to growth is a given.

The growth of both DigiLocker and eSign are also a testimony to how business processes have become much simpler. Former Infosys CFO Mohandas Pai talks of how, for large banks, the customer on-boarding time is down from six days to one hour using Aadhaar-based eKYC, eSign, and DigiLocker, and from one day to four minutes for telecom companies.

On agriculture, similarly, precision-farming is being carried out for potatoes in Gujarat using drones/cameras that monitor the crop, regular inputs of weather data/forecasts etc are analysed by AI to aid farmers, fraud detection is being done for insurance using drones and, with physical inspection by patwaris no longer required, crop claims can be settled in hours. Obviously, agriculture will get a big fillip if various state governments started using drones and other such services, and if land records were digitised and made public, even combined with soil and other records, but a start has already been made; in fact, with the government pressuring insurance firms to settle crop claims faster, it is just a matter of time before the patwari system of physical inspections is a thing of the past.

Though it is early days, thanks to Ayushman Bharat issuing 11.8 crore health cards, the Health Stack is off to a good start. Like its predecessors—Rajasthan’s Bhamashah— Ayushman is also riddled with fraud but, over time, as Aadhaar and AI/Machine Learning are used, this could be fixed. Indeed, with such a large base of users, the government can bring down health costs dramatically; it leveraged this to, for instance, reduce the prices of LED bulbs and Aadhaar-fingerprint readers by 85-90% over the past few years.

It is obvious that, for India to really progress, the government needs to get its act together and Indian firms need to aggressively invest in R&D to create new products—the world’s most valuable companies are tech ones and, even in traditional manufacturing and services, embedded tech is the key differentiator; also, tech adoption times are shrinking many times over. India is making some progress here—over 50% of the 4,610 patents filed in the US by India-domiciled firms were by Indian firms, just a fourth by MNC research centres—but China is way ahead. In the new year, though, let’s celebrate what we are most likely to achieve.

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Source: Financial Express