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Current Affairs 2023

India Stack - UPSC Current Affairs

India Stack is an ambitious project aimed at providing a unified software platform to bring India's population into the digital age. It comprises a set of APIs that enable presence-less, paperless, and cashless service delivery by governments, businesses, startups, and developers. It includes four distinct technology layers - the Presence less Layer, Paperless Layer, Cashless Layer, and Consent Layer.

Apr 07, 2023

3 min read

In recent years, India has taken significant strides towards becoming a digital-first economy. One of the major catalysts of this transformation has been the India Stack, an ambitious project aimed at creating a unified software platform that brings India's population into the digital age.

At its core, India Stack is a set of APIs that enable governments, businesses, startups, and developers to utilize a unique digital infrastructure to solve India's hard problems towards presence-less, paperless, and cashless service delivery. It comprises four distinct technology layers: Presenceless, Paperless, Cashless, and Consent.

The Presenceless Layer has been the most controversial aspect of the India Stack since it involves storing biometric data such as fingerprints for every citizen. Despite the concerns raised around the fraudulent use of biometrics, the other layers have been hailed for their ability to enable paperless and rapid verification of identity, personal records, and legally valid electronic signatures.

The adoption of the Aadhaar "Universal ID" numbers was the first step towards implementing India Stack, and subsequent stages have included eKYC, e-Sign, UPI, and DigitalLocker. The recent demonetization of 500 and 1000 Rupee notes further propelled the adoption of India Stack, paving the way for a cashless economy.

To test all four layers of India Stack, the India Stack team partnered with Capital Float, the largest FinTech alternative credit company in India, in 2016. The pilot aimed to provide loans to customers in minutes and from the comfort of their homes. The user consented for Capital Float to access their data through the digital platform, and Aadhaar infrastructure authenticated the user's identity. The credit-worthiness of the customer was estimated using banking activity and mobile scraping techniques, and the loan was approved with e-signature and disbursed directly into the bank account of the customer.

While India Stack has been praised for its potential to fast-track the move to digital payment systems, concerns have been raised about privacy and surveillance. India's Supreme Court ruled in favor of a petition declaring privacy a fundamental right, and other court matters followed.

In conclusion, India Stack represents a significant step towards empowering India's digital revolution. Its potential to enable paperless, cashless, and presence-less service delivery could transform the country's economy, creating opportunities for under-served populations and fueling growth for the FinTech industry. However, it's important to address the privacy and surveillance concerns to ensure that the benefits of India Stack are accessible to all.