Rebooting India: Realizing a Billion Aspirations (31 page)

The objective of law is to create a bal ance between the citizen and the state. It protects the minorities from the tyranny of the majority. At the same time, all citizens must be held equal before the law. A situation in which the poor and underprivileged are trapped in the serpentine coils of an opaque and glacially slow-moving judicial system violates every principle of due process and equality. If we are to redress this wrong, we must design new institutions to strengthen our judiciary and infuse it with new talent that can promote more efficient and transparent functioning. Only then can we fulfil the Aristotelian definition of a stable state—one in which ‘all men are equal before the law’.

The future is already here—it’s just not evenly distributed.

—William Gibson

THROUGH THE COURSE of this book, we have discussed twelve grand challenges—and the platforms to address them—that directly affect citizens, businesses and the government. In the new innovation economy, the government has to think in terms of building platforms and ecosystems, developing minimal and simple solutions that can scale up, and providing a reasonable regulatory regime.

The first two grand challenges that have been tackled are Aadhaar and PaHal (the LPG subsidy). Today, there are over 900 million Aadhaar holders, and 200 million of these numbers are directly linked to bank accounts. Almost 140 million LPG consumers receive their subsidy in the form of a direct transfer into their bank accounts, a system that substantially decreases diversion through fraud and lessens the government’s subsidy burden. To date, Rs 250 billion has been transferred as LPG subsidy to consumers. Both these platforms are now firmly established. It is easy to implement the same system
for a variety of other subsidy and social security programmes.

The next four grand challenges that we have described are those where the design is in place and early implementation is in progress, but scale has yet to be achieved. We have discussed the roadmap to a cashless economy with electronic payments. MicroATMs will bring banking services to every doorstep in the country. With e-KYC, we will begin the march towards a paperless society, where a range of services, from opening a bank account to availing of a government benefit, can be carried out electronically—no more waiting in line for hours clutching reams of paperwork. Eventually, going paperless and streamlining cumbersome processes will make our government and businesses more accessible, and our economy more inclusive.

Electronic tolls, the architecture for which is now being implemented, will give every vehicle a unique identity, its own Aadhaar. Trucks and people will now move effortlessly across our highways, cutting down on wait times at toll plazas. When implemented, the Goods and Services Tax will create a single common market in India, and through fraud prevention will increase government revenues over time. The data generated by the GST will contain important information about a merchant’s commercial activities, and can be used by lenders to assess creditworthiness and provide loans to millions of small merchants. In fact, the data generated by GSTN can be combined with data from various other e-commerce platforms, payment systems, and MCA21—a platform launched by the ministry of corporate affairs—to make a data-based credit assessment of a business. Data can also become the basis by which individuals are granted loans, thanks to new credit-scoring models that combine information from payment transactions, tax filings, social media activity, and so on. In the same way that a computer algorithm can end up giving us a self-driving car, so also algorithms can unlock credit for millions of people and small businesses.

Finally, in the last six grand challenges, we extrapolate our learnings and experiences from the previous six. The use of technology already ensures free and fair elections in India today. As the Election Commission undertakes its stated goal of linking voter
IDs to Aadhaar, the errors of inclusion and exclusion that plague our voter rolls and weaken our democracy can be fixed. We have also laid down a road map for technology-based interventions to rethink our educational system, switching focus to outcomes rather than inputs. In the healthcare space, we outline a plan for the nationwide implementation of electronic health records, designed to keep pace with new innovations in the area, such as the onset of wearable devices that can function as diagnostic tools. In the energy sector, we discuss how subsidies can be streamlined, as well as the need for a next-generation smart grid to cope with a world where millions of small producers start generating energy from their electric cars or rooftop solar panels. We identify the areas where technology can be used to overhaul our crumbling judicial system. Finally, we believe that the only answer to combating graft is a systemic one, where every rupee of government spending is tracked through an open system—the Expenditure Information Network.

Together, these twelve platforms will make it easy for our people to be well educated, healthy and productive, for our businesses to flourish, for our government to collect adequate revenues, and to operate social security programmes efficiently so that the less fortunate do not slip through the cracks. Robert F. Kennedy famously said:

The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.
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India is poised to become one of the three largest economies in the world over the next few decades, with the potential to become a global superpower.
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But this will not happen if we continue to tread well-worn paths and allow the benefits of growth to remain concentrated
among a privileged few. We need technology-fuelled structural reforms in our government, our businesses and our society at large.

While we speak of radically transforming government, let’s also take a step back to ask a fundamental question: What is government, and what is its purpose? This is a question that we ourselves have mulled over during our tenure in government. Depending on who you ask, there are a multitude of answers. Some describe government as a collection of institutions—the legislature, the executive and the judiciary, governed by checks and balances that regulate the separation of powers. Some describe government through the lens of the economy, labelling it socialist, capitalist, and so on. For some, government is described by its political inclinations, left wing or right wing. For the common man, the government is the local politician and the local bureaucrats with whom he regularly interacts. For the poor, the government is a provider of services, even if the quality of these services is sometimes below par. For the rich, the government is often an inefficient and corrupt obstacle blocking their way. For the shopkeeper, government is the tax collector demanding bribes; for the salaried employee, it is the authority that claims a large chunk of the monthly pay cheque while providing little to nothing in return.

These answers are all true, but they are also all false. That is because, much like the fable of the six blind men and the elephant, our view of government depends upon which part of it we interact with. Putting all the pieces together, we believe that the fundamental nature of government is a platform, where an entire nation comes together and designs laws and institutions meant to channel resources towards the greatest good of every citizen. In turn, every citizen has the right to question this system when it fails to deliver.

Over the years, our government’s focus has evolved from building the infrastructure of a new nation, to fighting famines with the Green Revolution, to the nationalization and subsequent liberalization of the economy. This shifting spectrum of priorities holds a mirror to the
needs of the people in each era, and government has had to evolve in order to meet each of these challenges effectively.

In the pre-technology era, the most common way for the government to achieve a particular outcome was through the creation of a public sector institution. Easy access to affordable fuel? Create public sector oil marketing companies. Food procurement and guaranteed minimum grain prices for farmers? Enter the Food Corporation of India. Bank accounts and credit for all? Nationalized banks are the answer. But is this the only model that works?

We believe it is time for government to adopt a new model—that of governing with data. How would this work in practice? Let’s take the case of LPG, where the government offers a subsidy to ensure easy access to affordable fuel. Today, the entire LPG subsidy scheme has been transformed thanks to a thin layer of technology. Customers pay market price for LPG, and the subsidy amount is transferred directly to their bank accounts. It becomes easy to trace which person is availing of the subsidy, and how many cylinders they are consuming.

This data can provide any number of useful insights to the government—the average waiting time to obtain a cylinder, local consumption patterns, seasonal trends, and so on. If an area is hit by a natural disaster, all the government has to do is push a button, and afflicted residents will receive a higher subsidy as needed. Similarly, citizens with a PAN card who pay a certain amount of income tax may be able to afford the market price for LPG, and once identified by the system, they might stop receiving a subsidy altogether. No longer does the government need to own public sector institutions to achieve this goal. It can do so simply through a platform, where any business can participate, and policies are made and implemented based on data.

A simple way to achieve nationwide banking coverage is for the government to declare that all benefit transfers will be made directly into bank accounts. It can mandate that banks must open accounts
for everyone, and it can ask for regular reports on the number of accounts opened, the total funds deposited and withdrawn, the average balance in an account, and so on. Based on this data, the government can give banks an incentive to operate in remote and rural areas by raising the transaction fees, while encouraging competition in more lucrative urban markets and driving the goal of universal access to financial services.

A critical requirement for governance by data is that these numbers need to be gathered in real time. Yearly statistics have no meaning in the new world. We need data flowing in from every corner of the country, updated every second. By correctly structuring incentives, leveraging the power of markets, and designing robust technology solutions generating real-time data, entire bureaucracies can be accommodated on a central dashboard. It’s easy to envision a Network Operations Centre (NOC) as the nerve centre of the government, tracking, monitoring and measuring administrative processes as they happen.

The platforms that have been created in the last few years will fundamentally change the interaction between citizens, markets and the state. While individually powerful, together they deliver value greater than the sum of their parts. As a digital identity, Aadhaar allows for electronic identity authentication. e-KYC obviates the need for submitting paper documents and photos. The e-Sign platform allows people to endorse any document with a digital signature, guaranteeing the safety and authenticity of electronic documents. The Digital Locker platform is a secure repository for all digitally signed documents, from degree certificates to property documents. The National Payments Corporation of India has launched the Unified Payment Interface, allowing for the processing of mobile-based payments for any service. Taken together, these developments will empower the citizen to manage his life and all his interactions with the government digitally. In effect, government will disappear from people’s everyday lives; instead of taking the physical form of offices and bureaucrats, government will now be evident only through the delivery of its services and their outcomes.