Rebooting India: Realizing a Billion Aspirations

Dedication

Introduction

Chapter 01
Aadhaar:
From Zero to a Billion in Five Years

Chapter 02
Aadhaar:
Behind the Scenes

Chapter 03
Banking on Government Payments

Chapter 04
Mending our Social Safety Nets

Chapter 05
Going Completely Paperless with e-KYC

Chapter 06
Integrating our Economy with The Goods and Services Tax

Chapter 07
Frictionless Highways for Economic Growth

Chapter 08
Streamlining Government Spending

Chapter 09
Strengthening Democracy with Technology

Chapter 10
A New Era in Politics―The Party as a Platform

Chapter 11
The Role of Government in an Innovation Economy

Chapter 12
Towards a Healthy India

Chapter 13
Teaching the Next Generation

Chapter 14
Switching on Our Power Sector

Chapter 15
Justice Delayed is Justice Denied

Chapter 16
Rebooting India:
Realizing a Billion Aspirations

Illustrations

Notes

Follow Penguin

Copyright

This book is dedicated to everyone who has worked on Aadhaar.

We especially wish to acknowledge the contribution of the thousands of Aadhaar operators who work tirelessly to make the vision of Aadhaar a reality.

We owe our gratitude to Samar Halarnkar for his invaluable feedback that has made this book significantly more readable and interesting.

It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.

—
Niccolò Machiavelli,
The Prince
(1532)

SEVENTY-YEAR-OLD BASUDEB PAHAN lives in a densely forested, remote area of Jharkhand. In order to receive his old-age pension from the Government of India, Pahan had to journey fifteen kilometres through hills and jungles to reach Ramgarh, the nearest settlement with a bank branch. And this was only half the story. To collect the 400 rupees a month owed to him, Pahan had to spend hours standing in line. Sometimes he needed to come back the next day. Factoring in the cost of travel and food, Pahan was spending over 12 per cent of his pension before he even received it. To add to his woes, he often had to wait two or three months for his payment to be processed. Pahan, the local government, and indeed the entire pension disbursement system were stuck in a time warp.

Then, in 2011, Pahan found himself transported from a dusty backwater of history into the forefront of India’s technological revolution. He achieved this feat by walking a short distance to the local panchayat office in his village and using a device called a microATM, under the supervision of the local business correspondent appointed by a bank. The microATM, a handheld wireless device, required only
an active mobile data connection in order to function. The business correspondent entered Pahan’s twelve-digit Aadhaar number into the device. Pahan pressed his fingers on an attached fingerprint reader and, seconds later, the business correspondent was handing Pahan his money, just as a bank teller might.
¹

A smooth and seamless customer experience like Pahan’s is usually typical of India’s private sector, not its government, and serves as an illustration of a new, ‘citizen first’ way of thinking that must become the norm in our administration.

Pahan’s fundamental problem—lack of access to banking facilities—might have been solved if a bank decided to build a branch in his village, an uncertain prospect. Instead of incremental change—building a banking network branch by branch and village by village—technology made it possible to deliver a bold solution overnight for Pahan, bringing banking right to his doorstep. We believe that technology holds the potential to completely redefine the relationship between the citizens and the state. What if a million banking correspondents equipped with smartphones and biometric readers could deliver banking services to 1.2 billion Indians? What if every citizen could use mobile banking and make cashless payments? Moving beyond the financial sector, can we use technology to solve some of India’s most pressing problems—to improve standards in healthcare and education, to cut wastage in government spending and increase revenue, to make tax collection citizen-friendly, to streamline our courts, and to eliminate corruption?

These and other questions form the focus of our book, and in every chapter we propose some ‘big ideas’ that can radically redesign existing systems, and in the process save the government an estimated Rs 1 trillion annually. Conservative back-of-the envelope calculations find those savings to be equivalent to 1 per cent of our GDP—enough for two Golden Quadrilateral road systems across the country every year,
²
or to send 200 Mangalyaan missions to Mars annually.
³
One year’s savings are also sufficient to provide minimal health insurance for every family in the country for three years.
⁴

In 2011, Marc Andreessen, the co-founder of Netscape, famously proclaimed, ‘Software is eating the world. More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defence. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures.’
⁵
For the most part, these businesses and services have come into existence only in the last decade, but have transformed our social landscape to the point that we now wonder how we ever got by without them. Until the 1990s, having a telephone connection was a prized rarity that took years to obtain; today, India’s mobile telecommunication network is the second largest in the world, with over 900 million users. Call rates used to be 16 rupees a minute;
⁶

at the current rate of one paisa per second, our call rates are among the lowest in the world. India now boasts of the world’s third largest internet user base, with over 190 million users, many of whom are using smartphones to get online and buy things; as much as 40 per cent of all e-commerce transactions in India are now conducted via mobile phones, bypassing computers altogether.
⁷

Whether it’s to watch a movie, a cricket match or a play, many of us don’t throng box office windows any more, but buy our tickets from websites like BookMyShow. We book train tickets through the website of IRCTC (Indian Railway Catering and Tourism Corporation), look up flights on MakeMyTrip or Yatra, and use RedBus if we’re to travel by bus. We book our cabs online through services like Ola or Uber, tracking their location through GPS and paying the fare electronically without having to hunt through our pockets for change.

You can now order groceries from your local kirana store on WhatsApp and have them delivered to your home, a business model that many small entrepreneurs are following. BigBasket and Grofers work on the same principle, but on a much larger scale. If you can buy fruits and vegetables over the internet, why can’t a farmer order fertilizers and seeds online, and have them delivered to his door? Why
can’t a poor family order cooking fuel using a smartphone? Why can’t crop insurance funds be automatically transferred to a farmer’s bank account as soon as a drought is declared?

You can now take personalized courses on a variety of subjects through Skype, and students across India now have access to classes from some of the world’s best universities through online platforms like Coursera, Udacity and edX. Is it possible to achieve the same outcome for every student in every government school in India? You can now find a doctor through your smartphone thanks to businesses such as Practo, which allow users to rate medical practitioners based on their quality of service. How can government primary healthcare centres and hospitals deploy technology in a similar way?

Rayappa Pitkekar is a forty-eight-year-old leatherwork contractor in Mumbai’s Dharavi locality; its status as one of the world’s largest slums belies the fact that its flourishing informal economy boasts a turnover of over Rs 30 billion annually,
⁸
thanks to the enterprising spirit of Pitkekar and his ilk. The son of a garbage picker who earned Rs 1.25 a day digging through trash to salvage plastic for reuse by the local plastic industry, Pitkekar studied by day and then worked two jobs, earning Rs 5 for every 100 newspapers he sold in local trains in the evening and then working in a hotel at night. His leather goods business now has an annual turnover that runs into lakhs of rupees; his daughter Priyanka’s dream is to ‘become what Kalpana Chawla was [an astronaut]’, while his son Kunal wants to be a doctor.
⁹
Within three generations, Pitkekar’s family, rooted in the hardscrabble life of a Mumbai slum, is now literally aspiring for the moon.

For the first few decades of our country’s existence as an independent nation, we turned our gaze inwards, preoccupied with building the dams, steel plants, universities and cities that became the first temples of modern India. As our country’s infrastructure began to take shape, we tackled such concerns as poverty reduction, while ushering in the Green Revolution and economic liberalization, the last
of which closed the book on the isolationist and protectionist policies of an earlier era, and recognized the need for our country to take its rightful place on the global economic stage. The winds of liberalization brought in a new mindset for India’s people; no longer content to plough the same furrow that their forefathers had before them, their ambitions began to grow. They wanted a system that would support their efforts to climb out of poverty and ensure a brighter future for themselves and their children.

India is sitting on a demographic dividend and is expected to become the world’s youngest country by 2020, with 64 per cent of its population, roughly 800 million people, of working age.
¹⁰
That is 800 million knocks on the ceiling with a list of demands that include education, employment, good health, better infrastructure, efficient governance and a corruption-free society. The economy that is supposed to sustain the weight of these demands has been growing in single digits, around 9 per cent a year in the best of times—a flimsy scaffold on which to construct dreams of a better life. How do we build a foundation strong enough to nurture these dreams and bring them to fruition?

The idea of government as an enabler of people’s aspirations necessarily implies a radical rethink of the relationship between our government and its people, one that still seems stuck in a bygone era in its reluctance to embrace technology’s transformative power. Despite all the advances in technology—the ‘dotcom revolution’ that India embraced so enthusiastically, the new business models that are springing up every day, the way India’s online footprint keeps growing—until recently, Basudeb Pahan and millions of others like him across India still had to line up at a government office or a bank branch, wait for hours, return multiple times, and pay for transportation and opportunity costs to receive a payment that only arrived on an errant schedule. Whether it was getting a pension, a government subsidy or affordable food from a ration shop, the process remained hopelessly complex and time-consuming, mired in bureaucracy and local interests, and imposing a heavy financial toll on the poor.

Even for an urban, middle-class Indian, dealing with the government
is cumbersome. Getting a driving licence, a passport, a birth or death certificate is a long-drawn-out affair, necessitating multiple trips to the relevant government office. Citizen service centres like Bangalore One and the recent initiative by the Government of Karnataka to create the nation’s first mobile governance platform are laudable attempts to make these interactions less fraught, but are so far restricted to small segments of the population.

Ask any small business owner in India what his or her biggest complaint is, and chances are that ‘compliance with local laws’ will rank high on the list. Merely starting a new business in India takes weeks; most of this time is spent in completing the required paperwork and legal formalities. Whether it’s paying taxes or negotiating complex labour-law requirements, we haven’t yet built a truly entrepreneur-friendly environment, where anyone with a bright idea and some capital can easily start a business. Consider the fact that out of 189 economies surveyed by the World Bank to compile the ‘Ease of Doing Business’ index, India ranks at a deplorable 142nd, significantly lower than all its BRICS (Brazil, Russia, India, China, South Africa) counterparts.
¹¹
All in all, the discomfort of these interactions has been pithily summed up by the authors John Micklethwait and Adrian Wooldridge as governments attempting to ‘govern the world of Google and Facebook with a quill pen and an abacus’.
¹²
How can government use technology to deliver a customer-service experience comparable to that on offer in the private sector today?

Since Independence, we have built many great institutions which have withstood the test of time—our Constitution, universal suffrage, the parliamentary system, our courts, the civil services, the federal structure and the separation of powers, among many others. For the world’s largest and most diverse democracy, born in abject poverty, scrambling for every possible resource, this is no mean feat. The checks and balances governing our democracy have largely worked. However, we as a nation seem to have fulfilled Babasaheb Ambedkar’s oddly prophetic prediction: ‘In political life we will have equality and in social and economic life we will have inequality.’
¹³
The fruits of the nation’s development have not been equitably distributed across
our population. The stark divides between the haves and the have-nots continue to exist, and are getting sharper than ever. Our formal sector—the section of society that holds government-issued IDs (in a pre-Aadhaar era), pays its taxes, takes out loans—is a thin layer on top of a vast, self-organized informal sector, which remains largely outside the purview of the government, struggling to claw its way up the ladder of economic prosperity.

We expect our elected politicians to provide a springboard for our aspirations. We expect them to create an environment where children go to school for high-quality education, where good healthcare is easily accessible to everyone, where entrepreneurs thrive and create enough well-paying jobs for every able person. We expect our government to be the provider of the last resort—to build social safety nets for those unfortunate enough to have fallen through the cracks of society. We no longer want to be supplicants to a ‘
mai
–
baap sarkar
’, uncomplainingly accepting the poor quality services it doles out; we want a government that leverages the strength of our institutions, the power of our markets and the industriousness of our people to build high-quality solutions at speed and scale. The politics of India is the politics of the past—marked by caste inequalities, religious conflicts and reservations. The politics of the future is the politics of meeting a billion aspirations, the weight of which will crush anyone who fails to deliver.

Whenever Sanjay Sahni, a school dropout working as an electrician in New Delhi returned to his home village of Ratnauli in Bihar’s Muzaffarpur district, he would be besieged by complaints from villagers that they weren’t getting their dues under the government’s MGNREGA (Mahatma Gandhi National Rural Employment Generation Act) scheme, meant to provide guaranteed employment and wages to rural residents. Sahni used to store his tools in a New Delhi cybercafe; knowing nothing about computers, one day he impulsively typed ‘NREGA Bihar’ into Google, and found the official list of villagers who were supposedly beneficiaries. As it turned out,
many of those listed hadn’t been given any work, and those who had didn’t get paid in full. The money was being diverted to contractors, village headmen and government officials instead. Armed with this knowledge, Sahni successfully fought for his fellow villagers’ right to employment and a fair wage.
¹⁴
The government didn’t have to mount a sophisticated anti-corruption scheme; all they did was to digitize information and make it easily accessible, and the public did the rest. This isn’t just the archetypal story of the common man triumphing against the system; it marks a far more profound shift in the balance of power between the government and the people, one that is only possible because of technology.