MicroSave Consulting (MSC) Associate Partners Anant Jayant Natu and Kunjbihari Daga talk about the Government’s social impact through technology with all its capacity constraints, the success of India Stack and what more needs to be done.
The success of India Stack
Anant: What has really accelerated India’s pace of financial inclusion, apart from policy support and impetus from government, is that there has been a coming together of a lot of different strands, technology being the most important one. There was the revolution we had around digital identity, which Aadhaar had brought about. Similarly, we had the innovation led by NPCI (National Payments Corporation of India), around the payment systems architecture.
These are part of India Stack. They provide what is called a digital public good. What has enabled India to accelerate financial inclusion is that most of the things we have achieved over the last decade or so have been built on these critical substrates: Digital identity and a very robust payment architecture.
Looking at DBT or Direct Benefit Transfer, we all know the pace at which the government wire the benefits directly to the account of the beneficiaries. All of that could happen in such a jiffy precisely because of the work that happened over the last few years.
Kunjbihari: The UIDAI and NPCI teams did not follow the conventional approach of adopting standard applications. They went on to understand the unique problems that India had and identify a unique solution for that problem. The approach of building it as a platform has played a big role.
But it’s not just about finance…
Anant: All said and done, finance is just a superstructure. Unless the sectors of the economy are doing well, finance is really not going to do much to change that. That’s when we deliberately shifted our focus to working on some of the areas that related to sustainable development goals. Things like health, nutrition, education and infrastructure were some of the issues that got us really interested. Our point of entry in most of these sectors was to look at it through the finance angle.
What we realised is that there is this whole thing around upstream issues that also needs a lot of consideration. When I say upstream, what I really mean is that if you were to look at why is it that the state of delivery in public hospitals or in public schools or in some of the other public good sector, why it is so pathetic, I shouldn’t say pathetic, there has been a lot of improvement over the last several decades. But there is still a lot to be expected.
The way we have approached this problem is to see how it is the funds flow. What are the things that constraints the state from delivering these services in the best possible manner? That’s the next frontier for us, to see that when the concerns for us are the most vulnerable sections of the society who are most dependent on government and public services. How can we improve their experience? We have to dissect those problems and use specific solutions for them. We approach it from a technology perspective.
Kunjbihari: There is a lot of work which has got into the Jan Dhan Aadhaar Mobile stack. Now the challenge is with the other kind of services. There hasn’t been enough focus on maybe healthcare related services. There was the Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) which included many people by offering cards and free healthcare treatment.
But still there were challenges for the hospitals like unpaid dues by the government. In terms of MNREGA there are delays in payments in certain places and certain setups. These are daily wage earners. They cannot afford to go without pay for so many days. We believe that technology can be adopted in these areas to now address those problems.
When it comes to HealthTech, we have worked on a smart payment solution and a Just-in-Time funding solution to help in real-time claim adjudication. We want to use system-based approaches and rule-based processing. A lot of those manual discretionary decisions have to be moved in terms of logic into the system.
The three capacity constraints
Anant: The Indian state has got certain capacity constraints. Broadly speaking, you could divide it into three parts. First, finance-related constraints, the way the money moves from the consolidated fund to the final end beneficiaries, both citizens and vendors. In fact I was reading a report the other day that there are currently outstanding dues of roughly 5 to 6 lakh crores which is due on the government agencies and public sector units.
Then there are process related problems like poor contract management. There could be errors in the way the beneficiaries of a certain programme get targeted. Or there could be issues with inter-departmental coordination, inefficient workflows, poor data management etc.
Third are the people related issues. Some government employees could be demotivated and they don’t properly respond to citizen queries. A lot of that is related to a lack of proper incentive alignment. It could be a lack of performance management and understaffing. A lot of the work we have done in the last 2-3 years is focused on identifying what is the problem and then looking for a corresponding tech solve.
The all-important issue of AgriTech
Kunjbihari: In AgriTech if you see in India, in all the states there are a lot of small-scale producers. There are very few large ones where they own a piece of land which is greater than 2 hectares. These small-scale producers have unique challenges. They are not digitally enabled. They are not qualified enough. They are not aware of the government schemes which are launched. There is a media disconnect with them.
In order to bridge that gap, there are unique programmes being run across different states in order for these small-scale producers to understand things. It is more in terms of market linkages and better-quality input. There are various ways and means which are being figured out to deliver this information to them.
There could be phygital interfaces or anganwadi centres. Then, building the ecosystem using the technology for them to connect to a larger world. There is the IDEA (India Digital Ecosystem of Agriculture) framework which is being developed by the Ministry of Agriculture.
Anant: If you look at all the stages of AgriTech: A company like Cropin is at the planning stage. At the land preparation stage you have several AgTechs which focus on those technologies like GIS and telemetry. Similarly for sourcing inputs, companies like AgroStar, EM3 (Agri Services) and Gramophone are focusing on sourcing inputs. Then we have Ninjacart for marketing of output. That’s been one very promising trend in AgriTech. Rather than being limited to just one part of the value chain, the AgriTech firms have been widely spread across these different stages of play.
On the use of emerging tech by the government
Kunjbihari: The government is going ahead with the issue of fortified rice. The government wants to distribute a hundred percent of the fortification through the PDS system and fair price shops. The entire value chain is a heavy touch manually driven process. Why can’t this be modernised using IoT? The quality across the value chain can be ensured using sophisticated IoTs plugged into the manufacturing ecosystem.
Anant: What we are really talking about is going for a platform-based approach. Or making sure that different departments work on a single source of data. Different systems are able to share their APIs. We talk of microservices, modular design, digital data layers, and common data standards. More important is getting the data architecture and IT architecture correct.
Kunjbihari: There has to be some kind of capacity building that the government has to do for bureaucrats to understand how technology can enable progress which will accelerate the pace of innovations coming on the ground.
(Catch the complete video interview on the Dataquest India YouTube channel)
MicroSave Consulting (MSC) Associate
Anant Jayant Natu
MicroSave Consulting (MSC) Associate