Digital Transformation and Public Administration: The Impacts of India’s Digital Public Infrastructure

ABSTRACT

Over the past decades, digital technologies have become ubiquitous, impacting and changing the ways society operates. Immense public and economic value is being created by improving access to information and resources. Hence, many public administration units around the globe continue to focus on digital transformation. Although mostly associated with digitizing services and workflow via software platforms, India’s efforts have taken a “Lego building block approach” toward technology which can be repurposed and recombined to deliver solutions at the social level. These digital public infrastructure (DPI) blocks have had significant impact on socio-economic development. In this special issue, we explore the role of DPI in digitally transforming public service delivery and in creating public value. The issue aims to make an important contribution to public administration and digital government literature, by examining India’s DPI and its positive externalities, in particular its role in financial and health inclusion. These papers include vital knowledge that can support policy processes on digital transformation and public value creation for India and other developing countries of the global South.

KEYWORDS:

• Digital governance
• digital public infrastructure
• public administration
• public value

Introduction

Digital technologies have become ubiquitous in the 21^st Century, impacting and changing the ways in which society operates (Panigrahi et al., 2022; Sharma et al., 2023). In response, government programs are also focusing on digital transformation, reorienting their processes from bureaucracy-based to citizen-centered public services (Xu, 2012). Digital transformation refers to “a socioeconomic change across individuals, organizations, ecosystems, and societies that are shaped by the adoption and utilization of digital technologies” (Dąbrowska et al., 2022, p. 932). It is the culmination of several iterations of digital innovations such as digitization and digitalization that have contributed to gradually transforming the functioning of organizations and processes. This phenomenon in the public sector began with e-government and evolved into various paradigms such as digital government, mobile government, ubiquitous government, and smart government (Manoharan & Ingrams, 2018). Digital transformation is the immediate focus for public administrators, with its potential for public and economic value by improving access to information and resources (Manoharan et al., 2023; Vij & Gil-Garcia, 2017). It also enhances administrative efficiency and improves transparency to ensure socially inclusive societies (Dunleavy et al., 2006; West, 2019). Several countries have implemented digital transformation, but India’s model is often cited at various multilateral forums because of its alternative and innovative approach (Alonso et al., 2023; Eaves et al., 2024; Sharma et al., 2023).

Conventionally, digital transformation has been associated with digitizing services and workflow using various software platforms (Eaves et al., 2024). The challenges arising from the reusability, interoperability, and extendibility of these platforms has raised concerns about incurring significantly higher costs (Alonso et al., 2023; Sharma et al., 2023). India, however, undertook a “Lego building block approach” (Eaves et al., 2024). Instead of a multiplicity of software, it relies on technology blocks that can be repurposed and recombined to deliver a variety of public benefits (Eaves et al., 2024). These technology blocks, which primarily consist of digital identity and payment blocks, and digital data exchange systems, have been collectively termed “digital public infrastructure” (DPI) (Alonso et al., 2023; Eaves et al., 2024; Sharma et al., 2023).

Existing literature has documented the significant impact of the digitization of public value (Bannister & Connolly, 2014; Bonina & Cordella, 2009; Cordella & Bonina, 2012; Mazzucato et al., 2020). However, that research on the public sector (Scupola & Mergel, 2022) has been more focused on technology-mediated efficiency gains (Eaves et al., 2024; Meijer & Bekkers, 2015; Mergel et al., 2019). Although the practice-oriented literature on DPI is significant, scholarship lags behind (Eaves et al., 2024). Additionally, research on India from a public administration perspective is scarce (Roberts, 2018). India’s DPI experience is of vital importance because the scale of its societal impact is particularly relevant for developing countries (Alonso et al., 2023; Sharma et al., 2023). In this special issue, we explore the role of DPI in digitally transforming public service delivery. By examining India’s DPI and its positive externalities, in particular its role in financial and health inclusion, it is possible to track how public value is created through technological change. The scholarship presented here is meant to support discussions on policy processes in digital transformation and public value creation for India and the other developing countries of the global South.

DPI: a conceptual framework

Public utilities embed the necessary infrastructure in our daily lives, but citizens often take it for granted (Janssen et al., 2009). The term “infrastructure” was coined in the late 19th century and can be attributed to the French lexicon wherein “infra-” means “below.” Infrastructure then refers to what operates underneath the structure. Frischmann (2012) defined it as a “shared means to many ends” for several reasons. It is more than just the physical infrastructure of roads or bridges. The word “share” implies community or public use and therefore a mode of consumption that is non-rivalrous. And the word “means” in economic parlance suggests resources. Finally, the phrase “to many ends” refers to the numerous possibilities of infrastructure across private, public, and social goods. Like physical infrastructure, DPI are systems and tools that enable citizens to function in the digital realm (Zuckerman, 2020). DPIs are digital building blocks—platforms or networks, enabled by interoperable open standards; they provide secured access to underlying data and/or business logic, which can then be repurposed for multiple use cases across diverse sectors (Zuckerman, 2020). The Application Programable Interfaces (API) of DPI enable innovation not only for delivery of public services but also for goods flowing out of the private sector. Economic and social dynamics are shaped by three interconnected flows—people, money (goods and services), and information (Sharma et al., 2023). By facilitating these flows, DPI creates public value and fosters economic activities, social and community relationships, supports capacity building, and improves the overall quality of citizens’ lives (Sharma et al., 2023; Zuckerman, 2020).

India and DPI

Public administration in India faces innumerable execution challenges: the country’s 1.4 billion people (larger than that of continental Europe), its federate administrative structure, the complexities of its many languages, social stratifications, geography, infrastructure, and its vast range of collaborative actors (Sharma et al., 2023). Public administrators are required to devise and implement policy solutions under political and socioeconomic uncertainties and “ … navigate unstable situations, identify patterns for problem solving, and use sophisticated representations to develop and communicate their ideas” (Manoharan et al., 2020).

Over the past decade, the Government of India (GoI) has taken a host of innovative steps to digitally empower society by ensuring digital access and bridging the digital divide (Desai et al., 2023). Using a DPI approach, India has been empowering citizens and businesses, and facilitating collaborative governance to enable consistent GDP growth. DPI has been a pivot to fostering well-being and inclusion among citizens and to augment private value creation through entrepreneurship (Sharma et al., 2023). India’s DPI approach demonstrates transformative power by balancing technology design, governance (including collaborative governance), regulation frameworks, and co-creation with the private sector to engender a population-level impact (Sharma et al., 2023). India started its implementation of DPI in 2009 by rolling out the Aadhaar “Universal ID” number for all citizens, and then launching various building blocks or modules, which are collectively termed the “India Stack.” Creation of the India Stack as a DPI was one of the major steps in overhauling India’s digital infrastructure (Carrière-Swallow et al., 2021; Saroy et al., 2020). The India Stack is a collection of disparate technology products, frameworks, and API. It is an aggregate of four public goods:

1. Aadhaar or biometric citizen identification through a unique identification number;

2. Aadhaar-based e-KYC or Know Your Customer through electronic verification of customer credentials, using Aadhaar;

3. Unified Payment Interface (UPI) or peer-to-peer and person-to-merchant instant payment system; and

4. individual consent framework to share personal data or account aggregator framework (Desai et al., 2023).

These individual components can interlink different entities, both private and public, across various sectors, thereby, creating a “stack” (Desai et al., 2023). Similarly, Open Network for Digital Commerce (ONDC) has been rolled out as a digital public good aimed at unbundling buyer aggregation and seller aggregation (De et al., 2024). Built on the principles of interoperability and unbundling, ONDC is an initiative backed by the GOI and is aimed at providing choices for buyers and markets for sellers.

While ONDC is relatively new, the India Stack has already enabled basic financial inclusion (Alonso et al., 2023; Sharma et al., 2023) as well as credit markets for micro-businesses and payment democratization. As displayed during the COVID-19 crises, the India Stack facilitated agile execution of the social safety net, thereby mitigating the impact of exogenous shocks on households. It has also enabled efficient and effective delivery of welfare schemes through direct benefit transfer (DBT), with estimated savings of 1.14% of GDP as of March 2021 (Alonso et al., 2023). From a development perspective, in addition to financial inclusion, the India Stack has the potential to become a positive externality for other sectors such as education and health care (Alonso et al., 2023). This special issue contains three papers related to the needs and utility of DPIs to achieve wellbeing.

Overview

Papers in the special issue cover the health and financial services sectors. They reflect on the need as well as the impact of DPI on the distribution of welfare schemes and on the health and financial well-being of citizens.

The paper titled, “Is Targeted Healthcare Subsidy for Non-Communicable Diseases Adequate in India? Evidence from a Tertiary Hospital” highlights the need for targeted health subsidies for patients to mitigate health shocks. During an idiosyncratic shock, a catastrophic health-related expenditure for non-medical goods and services may pose a heavy burden on vulnerable, low-income households. An efficient public health policy can minimize such catastrophic health expenditures by targeting low-income households for subsidy. DPI can be potentially leveraged to execute efficient and effective public health programs. Findings from the paper demonstrate the need for cross-sectoral collaboration (health and finances) to create citizen wellbeing. Public welfare demands from policymakers indicate a shift in their focus from preventive health care to targeted health subsidies.

The paper titled “Confluence of Health and Financial Policies for Development: A Study of Collaborative Governance in Maternal Health Delivery” highlights the inter-relatedness of health and financial-sector policies, signifying the need to address citizen-centric development beyond the silos of schemes. Using data from the latest National Family Health Survey—a sample of 15,968 poor women, the paper shows how financial inclusion via the Pradhan Mantri Jan Dhan Yojana (PMJDY) program was associated with greater uptake in the Janani Suraksha Yojana (JSY), a public health program in India. JSY involves multiple stakeholders across sectors with the common goal of reducing mother and infant mortality by boosting institutional deliveries. Using a link between the two policies across different sectors, the paper showcases a novel example of collaborative governance that includes elements of intergovernmental collaboration as well as public-private partnership. It also shows the results of empirical tests of Emerson et al. (2012)’s integrative framework for collaborative governance. Finally, the paper demonstrates the importance of external drivers and collaboration (shared motivation and capacity) in creating impacts.

India’s rapid digital transformation over the past decade has been accompanied by an increasing focus on financial inclusion, which has multiple benefits for the population, including alleviation of social and economic inequalities. Using a case study of India’s Digital Stack, the paper “Public Value Creation through Combined Consumption of Multiple Public Services: The Case of India Stack” explains how a discrete set of technology services when consumed by citizens can create public value. The paper focuses on a single cross-sectional case study employing a deductive approach and is combined with the Granger causality test to empirically test the efficacy of DPI on financial inclusion. These learnings and the discussion in this article can support the policy-making processes on digital governance and public value creation not only for India but also for the other developing countries of the global South.

Conclusion

The learnings and discussion this issue presents make important scholarly contributions to public administration and digital government literature. By examining the impact of DPI in India on citizen wellbeing, the papers on this issue highlight the intersection of DPI and financial and healthcare inclusion. They present vital knowledge that supports the policy development processes underlying digital governance and public value creation for India and other developing countries of the global South. This scholarly research can be extended to other sectors, and cross-country comparisons can enhance learning of best practices. Papers on this special issue also demonstrate how DPI can facilitate cross-sectoral collaborative governance, making it easier for the government to create public value through its policies and provision of public services that uphold equity, inclusion, and accountability.

Disclosure statement

No potential conflict of interest was reported by the author(s).