The Digital Age of Public Service Delivery Systems in India

July 19, 2022

Daniel Flynn & Gargee Basu

The Digital Age of Public Service Delivery Systems in India

India has been a leader in the digitization of public services since the launch of the Digital India initiative in July 2015, as the government fine-tuned its focus on the country’s future by improving ICT governance and policy making, expanding internet access, and emphasizing digital public service delivery to facilitate good governance that leads to inclusive growth and better access to services for all citizens. As COVID-19 hit the globe and lockdowns and social distancing became the norm, the importance of being able to implement public services and welfare schemes remotely became even more apparent. Within this context, this paper seeks to outline the development of India’s systems of digital public service delivery. This includes the measures the Government of India (GoI) has implemented to reach its citizens with necessary programs and benefits, as well as the challenges and issues that have arisen throughout the process. The final section examines potential ways forward through which the GoI may continue improving its efforts.

Thus far, the digitization of public service delivery has seen the achievement of numerous laudable milestones. The availability of high-speed internet as a core utility continues to increase in scale and reliability across the country. Rural, last-mile gaps in service area are being bridged through Common Service Centres, physical office facilities where citizens can use public computers and internet connections to engage digital services to which they otherwise might not have access. Mobile data plans and applications continue enabling citizen participation in digital and financial areas, and the GoI has also implemented systems to digitally link IDs (Aadhaar cards), tax returns, bank accounts, and mobile numbers, which has allowed for more streamlined uniformity and transparency in service delivery. Citizens can now easily go online to request government information, apply for national scholarship programs, access welfare schemes, and contact local officials; DigiLockers further promote digital empowerment by providing secure digital storage of key personal documents. Lastly, the digital actions taken by the GoI during the pandemic have shown that these advancements allow the government to respond to crises effectively in record time and help created a cross-functional culture between significant line departments as countrywide initiatives were implemented.

At the same time that these achievements were being made, however, there have also been instances of digital theft and fraud, mishandling of sensitive data, and security breaches. This has not only exposed the crucial personal data of millions of people to malicious actors, but it has eroded much of the overall public trust in the government’s digital initiative, setting digital progress back several steps in the process. There remain last-mile challenges around internet speed, smartphone affordability, and digital literacy as well.

India’s growth story has been and will continue to be intrinsically linked to its ongoing digital transformation. Connecting citizens to a bigger, better network that allows for remote access to public services, centralized digital recordkeeping, greater transparency, and ongoing accountability has been major achievement by the GoI should only improve going forward. Though all the initiatives are yet to be implemented equally in all parts of the country, there is hope that, in the near future, India will be on par with any other digitally advanced country. To keep this progress moving, the GoI should continue decentralizing the power of technology through the state and district levels; improving digital literacy for all who need it while using technology to raise awareness of social welfare schemes; building more secure, trustworthy data protection systems; and invest in additional new technologies such as e-PDS systems that help track and monitor service delivery processes from start to finish.

Advantages of Digitization& Key Initiatives and Milestones Achieved Thus Far

Digitization can directly improve the efficiency and effectiveness of service delivery by lowering the costs
associated with delivery as well as the time burdens placed on citizens who would otherwise have to visit
government offices in person, often more than once, to enroll in schemes and programs.

Digital record keeping and monitoring increase transparency and accountability and can reduce discretion and rent-seeking opportunities that can come up when individuals look to enroll in welfare schemes while improving the quality and coverage of services like tele medicine. Public service delivery can be indirectly improved by strengthening feedback flows from users to service providers through smartphone-based citizen feedback mechanisms, developing online databanks by auto-generated surveys, or by making open government data more accessible to the citizens. Such feedback can be used by providers to course-correct, resolve issues, and improve delivery. Lastly, digital technologies can help citizens connect 3 with each other, fostering voice and collective action, which in turn can incentivize governments to improve the quality or coverage of existing services or to deliver new services.

Tax Enforcement and Compliance

India is using digital technologies to improve governance in areas like tax enforcement and compliance,
including through the recent implementation of the Goods and Services Tax (GST) Network. With all
registrations required to be done electronically through the GST Network, this has become a web-based onestop shop which uses a uniform interface to help citizens and businesses comply with indirect tax
requirements. The GST Network is linked with users Aadhaar numbers, which are in turn linked to individuals’
bank accounts; unlinked accounts are to be frozen by banks. The mandatory electronic tax filing minimizes
taxpayers’ physical interaction with tax officials and has already broadened the tax base substantially. In just
six months, the Indian government added 3.4 million new indirect taxpayers to its system. The success of the
GST Network and Aadhaar systems has spurred interest in putting in place similar systems in other countries
in Asia.

Reducing Bribery and Corruption in Land Ownership. While specific numbers are difficult to verify, the issue of bribery and scams taking advantage of people going through the process of land or property registration is a serious one that can cost ordinary people significant sums of money. Fortunately, new technologies provide the potential for great improvements in this area. One ambitious example is the steps taken by the government of Andhra Pradesh state, which is working to implement a blockchain-based platform that would encrypt land ownership data records, making them more secure, incorruptible, and transparent.

Linking Digital IDs with Government Benefits and Service Delivery for Financial Inclusion Despite some public skepticism about the security and privacy of the digital aspects of Aadhaar, the government has provided digital identities to 1.23 billion citizens. The government’s ability to provide digital identification for 99% of the adult population has increased the effectiveness of Pradhan Mantri Jan-Dhan Yojana, India’s National Mission for Financial Inclusion, which seeks to ensure access to financial services, namely banking savings and deposit accounts, remittance, credit, insurance, and pension in an affordable manner. This has allowed for the combination of Jandhan bank accounts and mobile phone numbers with Aadhaar – creating what is commonly referred to as the JAM trinity short for Jan Dhan-Aadhaar-Mobile) – further helping the poor receive government benefits directly into their bank account. As a result, India has been a world leader in digital payment transactions since 2019. The use of this digital service has grown exponentially in recent years, increasing from 3.16 billion transactions in 2014-2015 to 74.22 billion transactions in FY 2021-2022.2 The government was able to use the JAM system too quickly disburse relief benefits directly to citizens during the COVID-19 pandemic as well.3 Policymakers hope to link the citizens financially with this one scheme.

The digital delivery of services has simplified the way citizens interact with the government to avail of its services in other ways as well. Over the last three years, the National Scholarship Portal allowed14 million students to register online, while the creation of the UMANG (Unified Mobile Application for New Age Governance) gave citizens digital access to 339 government services. By making these accessible through mobile phones, the government has significantly expanded the reach of critical public services.

Furthermore, Common Services Centres (CSCs) are bringing e-services to the doorsteps of people in rural areas in an affordable manner, allowing people without personal smartphones, computers, or internet plans to access digital public services. There are around 312,000 CSCs across the country that provide over 350 services across sectors like education, health, and agriculture. They have generated employment for 1.2 million people including 55,000 women and have become sources of digital empowerment that are actively involved in increasing the rate of digital literacy

Likewise, the government is implementing the world’s largest digital literacy scheme through the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA) programme. Under it, 19.6 million people in rural areas were educated on digital literacy, and a total of 60 million more will be trained. This has helped bridge the digital divide and enabled people to access digital benefits more easily

In summary, the streamlining of identification and documentation processes, improvements in financial inclusion measures, reduction of corruption and rent-seeking, increases in digital literacy, and easing of access to welfare schemes demonstrate the wide-ranging benefits of digital service delivery. The measures taken by the GoI and the schemes introduced for the citizens have made the public service delivery more efficient and allowed the benefits to reach more people more quickly. Despite the overall success and the milestones achieved thus far, the digitization process has not been entirely seamless, however

Challenges of Digital Public Service Delivery

The challenges that arise when moving to digitize public services often mirror those found elsewhere in the tech sector, particularly when it comes to cyber security, data protection, privacy, and ensuring that digital advancements are inclusive of all members of society.

Data protection and security are particularly critical steps to encouraging uptake and trust among individuals. One such example is related to Aadhaar, the unique digital identification number that enters every adult into the government database and eases access to government benefits, voting, opening bank accounts, or even ordering an Uber. However, because Aadhaar requires and stores sensitive personal information, concerns over privacy and data protection have made it difficult for the government to gain full public trust and buy-in for the system.

Many people have expressed concerns over linking Aadhaar with their bank accounts, and this hesitancy has challenged the government’s ability to streamline digital transaction processing related to public service programs. In early 2018, a data breach exposed the Aadhar numbers of central government workers in the Indian state of Jharkhand and an additional 1.6 million pensioners. Even worse, it was soon revealed that the system was left without a password dating back to 2014. That same year, around 200 official government websites mistakenly made Aadhaar data publicly accessible; Aadhaar card data was later found for sale through WhatsApp for Rs 500 per individual. Numerous instances of fraudulent “phishing” websites attempting to gather sensitive personal information from unsuspecting users have cropped up over the years as well.

Additional challenges have included the overall speed of internet connections, which has remained low especially in remote areas even as the scope of connectivity has expanded. Smartphones are still unaffordable for many people, and the lack of entry-level models prevents access to some of the digital service delivery systems meant to benefit those most in need. This feeds into the related challenges of education, digital literacy, and awareness of the technological tools available; when smartphones are still out of reach, it is difficult to encourage people to learn about the systems they would use them for. Fortunately, none of these challenges are insurmountable, and the GoI has proven its ability to learn, adapt, and improve; incorporating some of the additional approaches outlined in the next section should continue assuring success.

Potential Ways Forward for Digital Public Service Delivery

Successful digital public service delivery depends on several factors, foremost being the development of a robust ICT and network infrastructure that extends through rural and remote areas. To make use of this infrastructure, the GoI must promote digital literacy throughout society and raise awareness of the benefits of accessing services digitally. These education initiatives and resources should be made available in local languages to be as inclusive as possible. The government should also ensure that there are technical and policy frameworks that will protect sensitive data and user privacy, incentivize partnerships with private players and startups through the creation of a data-driven culture, and reinforce institutional capacities for effective, fair project management, monitoring, and review. Lastly, collaborative digital platforms should continue to be rolled out for participative governance and online submission and verification of citizen’s data for enrolling in available government schemes. If these pieces can continue to be effectively implemented, the Digital India initiative has the potential to impact the lives of citizens by enhancing the quality and speed of service delivery, providing access to administrative needs, and improving social and economic inclusion. As it is now, government projections have stated that the initiative can provide an incremental 30% increase in GDP by 2025.

The public service delivery ecosystem has many different layers and is not just a one-way process where the supreme authority will implement and deliver direct and indirect benefits for its citizens easily. There is still room for policy-level changes to modify and build upon the digital transformation underway in India. Potential improvements and ways forward include the following.

1. Strengthening and building the technological capacities of state and local governments is equally important as the digital efforts of the central government and is key to decentralizing the power of technology in all levels of government. The Digital India initiative seeks, in part, to have the central government set standards and guidelines while providing technical assistance and handholding to state and local governments as they identify and develop state-specific projects and digital governance. The e-Kranti initiative, which is part of Digital India, also seeks to expand rural ICT access and availability. These initiatives and others falling under the Digital India umbrella will be key to creating a truly successful digital-first society and promoting digital public service delivery.

2. Improving stakeholders’ awareness of entitlements and providing information on the quality of services can potentially be a cost-effective method of improving service delivery. Using digital technology to inform citizens of government schemes and public service benefits they may be eligible for should be a straightforward way to improve awareness and uptake of critical benefits. The JAM trinity and the information that linkage provides could be used to prompt automatic notifications sent to individuals to inform them of benefits they may be eligible for and link to information on enrollment. However, for this type of initiative, data protection is key for uptake and public trust.

3. Technological improvements can be used to monitor and improve accountability in service delivery. Recent advances in using biometric identification, electronic transfers of benefits to stakeholder’s accounts may have led to significant reduction in program leakages and provided a direct interface between the state and the potential beneficiary. MyGov is one example of a digital platform dedicated to improving accountability and encouraging citizens to provide feedback and ideas on policies and initiatives and engage with policymakers. Further initiatives dedicated to transparency and digital security surrounding public service delivery should continue to be explored.

4. Research by IGC (International Growth Center) in April 2017 suggests that teachers, public health officials, bureaucrats, and other key staff can be incentivized to perform by linking their efforts to measurable outputs. However, it is important to avoid false reports. To do this and to get the best practices at different levels, a Central Monitoring System (CMS) can be implemented.

In Bihar, one such initiative was taken in the development of an IT-based solution for Public Distribution System (PDS) called e-PDS. The e-PDS aims to ensure that food grains reach the intended beneficiaries and there is no diversion or black marketing of grains. The components of e-PDS include the following

● Integrated Weight Management System (IWMS): Vehicles carrying food grains are weighed and the weights are automatically transmitted to and stored on remote servers, without any manual intervention. If there is a difference in the weight of food grains on arrival vis-à-vis that of food grains dispatched, an SMS alert is sent to the concerned officials and a theft report is generated.

● Management Information System (MIS): MIS has been introduced to computerized record keeping under the PDS. It contains data on godowns, transporters and trucks, movement of grains, stocks, sale outlets etc. It provides reports relating to daily activity pertaining to the PDS such as orders, sales, financial transactions etc.

● Inventory management: The system informs warehouses regarding the quantities of grains that they need to keep in buffer to ensure an uninterrupted supply. Inventory reports can be accessed on a portal, with real-time updates.

● GPS-based fleet tracking: Trucks transporting grains are fitting with GPS. If a truck transporting grains from the Food Corporation of India (FCI) to the state food corporation godowns diverts from the pre planned route, SMS alerts are automatically sent to concerned officials. This has also been done in Munger district in Bihar.

● Sale to beneficiary: Sales to beneficiaries at outlets are recorded using Point-of-Sale (PoS) terminals. Coupons brought by the beneficiaries are scanned using a barcode scanner, and the information is directly uploaded to the main MIS server where sales reports can be generated.

● Citizen interface: Beneficiaries can register on the PDS portal for various SMS alerts. The system automatically generates an SMS to all members of the ward or panchayat level vigilance committee informing them about grain off-take by dealers within the ward

The e-PDS implemented in Bihar gives a strong example of how digital technology can impact chains of service delivery from top to bottom. Numerous other areas of digital governance could also benefit from the transparency, accountability, and efficiency that this type of streamlined, top-down management system can provide.

5. Lastly, involving local youth leaders and community-based organizations of women and men (SHGs and FPOs) would have a beneficial impact on digital public service delivery. Training such local leaders on basic accessible technological support and on peer training and capacity-building for digital tools should help ensure that available digital tools are used by as many people as possible