How India Stack Built a Cashless, Paperless Digital Economy at Scale

Designed as a set of open digital platforms, the India Stack has transformed how citizens, businesses and governments interact and deliver services, according to www.theaustraliatoday.com.au report.

The India Stack is a collection of open application programming interfaces and digital public goods that together form the backbone of India's digital public infrastructure.

Its key components include Aadhaar for digital identity, UPI for payments, DigiLocker for document storage, e-Sign for digital signatures, e-KYC for verification, Direct Benefit Transfer for welfare delivery and digital health platforms under the Ayushman Bharat Digital Mission.

These systems allow people to access services without physical paperwork, cash or in-person verification.

Although the framework carries India's name, its design and vision go beyond national boundaries.

Conceptualised in the early 2000s and first implemented through the Aadhaar programme in 2009, the India Stack was built as a scalable and interoperable model that can be adopted by developed, developing and emerging economies alike.

It uses technology to deliver services securely and efficiently to large populations.

At its core, the India Stack functions through multiple digital layers that work together. The payments layer supports cashless transactions through platforms such as UPI and IMPS, which allow instant bank-to-bank transfers for individuals and businesses.

These systems saw massive adoption during the Covid-19 period and have continued to grow rapidly, lowering transaction costs and reducing risks, the report said.

The paperless layer enables digital storage and retrieval of documents through platforms such as DigiLocker, e-Sign and e-KYC, allowing citizens to share verified information in real time.

Complementing this is the presence-less layer, which uses Aadhaar-based biometric identity to verify individuals anytime and anywhere without the need for physical documents, reducing fraud and simplifying access to services.

Another key element is the consent-based data-sharing framework, which allows individuals to control how their personal data is used, as per the report.

Through regulated entities such as account aggregators, users can securely share information like bank statements with service providers for specific purposes and for a limited time, ensuring transparency and data protection.

The digital ecosystem also extends to commerce through the Open Network for Digital Commerce, which enables small businesses and neighbourhood stores to participate in online markets using open protocols.

By lowering entry barriers and promoting interoperability, the platform encourages competition and reduces the dominance of large players.

India's experience with the India Stack has led to widespread adoption across sectors such as finance, healthcare, education and public services.

Millions of citizens now receive government benefits directly into their bank accounts, access services digitally and complete transactions without paperwork or intermediaries.

This has not only improved convenience but also reduced leakages and corruption in welfare delivery, the report added.

The open nature of the Stack has also driven innovation and entrepreneurship, enabling startups to build new products and services on top of shared digital infrastructure.

As a result, financial inclusion has expanded rapidly, bringing previously unbanked populations into the formal system, the report added.

- IANS