Digital public infrastructure 2.0 and the role of AI in india’s next governance leap

Traditionally known for providing IT services to the world, India is now increasingly also finding itself in the position of creating for the world. One such example is that of building advanced digital public infrastructure (DPI), the foundational digital systems that allow governments, businesses, and citizens to interact efficiently and securely at scale. It provides the core digital building blocks to deliver public services and enable digital transactions easily for everyone.

The journey began with Aadhaar in 2009, India's first major DPI. It offered a verifiable 12-digit unique digital identity linked to biometrics for every resident. Before Aadhaar, a significant portion of the Indian population, especially the poor and marginalized, lacked robust and universally accepted identity documents. This made it difficult for them to access essential services, open bank accounts, or prove their existence to avail government schemes.

Aadhaar addressed this by linking the unique number to an individual's demographic and biometric information. This gave millions, for the first time, the dignity of official recognition and unlocking access to welfare, banking, and digital participation. Today, this foundational DPI platform has reached over 97% of India's population.

From Foundations to Frontiers: The Evolution of DPI

Following Aadhaar, the Unified Payments Interface (UPI), launched in 2016, revolutionized digital transactions. This instant real-time payment system simplified inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) payments, making them fast and interoperable across numerous banks and apps. For small shopkeepers and everyday citizens, UPI turned smartphones into wallets, enabling even a street vendor to receive payments instantly. UPI's success has transcended borders, now operational in countries like the UAE, Singapore, France, and Sri Lanka.

These first-generation DPIs laid a transformative base, enabling seamless service delivery and fostering digital finance. They were the initial building blocks towards showcasing India's capability to deploy digital technologies at a population scale for societal change.

DPI 2.0 and the Path to Equitable Innovation

As citizens’ expectations evolve and digital ecosystems become more complex, India’s DPI needs to shift from basic service delivery to intelligent, personalised, and inclusive solutions. There are also new challenges with current DPIs, which include a lack of real-time data, contextual and refined language expansions for users to access it in preferred languages, and future readiness for emerging needs.

To address these challenges, India is leading the transition to DPI 2.0, where Artificial Intelligence (AI) will redefine how services are delivered, policies are designed, and citizens are empowered. AI and machine learning are now at the forefront to navigate these complexities, and reimagine how DPIs can improve personalization, streamline services and expand their reach for every citizen. The next frontier is ensuring these services feel local, responsive, and available to every citizen, no matter their language, literacy, or location.

This evolution is crucial. While current DPIs have achieved significant economic impact, a NASSCOM report estimated that DPIs could add 2.9–4.2% to India's GDP by 2030, driven by enhanced impact of existing and new DPIs like ONDC (Open Network for Digital Commerce).

Artificial Intelligence – The Engine of Governance Transformation

Artificial intelligence is the basis of DPI 2.0, offering unprecedented opportunities to enhance efficiency and impact in governance. The fusion of AI and DPI opens many new opportunities for the industry ecosystem. Businesses can innovate using this infrastructure, policymakers can use AI-based real-time data analytics to craft better policies, identify bottlenecks, and the benefits of integrating AI go far beyond. Here is what we can look at when thinking about the DPI’s intelligent tech trajectory:

• Predictive Insights for Policymaking: AI can analyze massive datasets generated by platforms like Aadhaar and UPI to identify trends and predict outcomes. This enables evidence-based policymaking that addresses societal challenges proactively

• Personalized Citizen Services: AI-powered platforms can tailor services to individual needs. For instance, healthcare initiatives like the Ayushman Bharat Digital Mission can leverage AI for personalized diagnostics and treatment plans

• Automation for Efficiency: Routine administrative tasks can be automated using AI, reducing human errors and freeing resources for strategic priorities

• Prevents Cyberthreats: AI can enhance cybersecurity by detecting and mitigating threats in real time, protecting DPIs from cyberattacks, and ensuring the integrity of digital services

Addressing Complexities: Language and Inclusion

India’s linguistic diversity presents a unique challenge for digital governance. AI, particularly Natural Language Processing (NLP), is crucial for overcoming language barriers and ensuring that DPI is accessible to all citizens, regardless of their native language. A landmark initiative under DPI 2.0 is the Government of India’s collaboration with Sarvam AI and AI4Bharat (IIT Madras) to develop a sovereign Large Language Model (LLM) for Indian languages. This project, part of the IndiaAI Mission, aims to:

• Develop LLMs optimized for Indian linguistic diversity, supporting advanced reasoning and voice-centric applications

• Ensure that AI solutions are built, deployed, and optimized entirely in India, using domestic infrastructure and talent

• Empower government and enterprises to deliver GenAI-powered services in local languages, bridging digital divides and fostering inclusion

This initiative will make AI-driven services accessible to every Indian, regardless of language or literacy, and set a global precedent for multilingual AI infrastructure.

A New Era of AI-Driven Governance

DPI 2.0, powered by AI, marks a transformative leap in Indian governance, making public services more targeted, inclusive, and efficient than ever before. Initiatives like the Sarvam collaboration and the IndiaAI Mission are not only enhancing domestic capabilities but also positioning India as a global leader in digital and AI-driven governance. By harnessing the full potential of AI, India is poised to bridge digital divides, foster economic growth, and create a governance model that is truly citizen-centric, transparent, and future-ready.

By Goutham Parcha, vice president, application development, Pegasystems India