Independent Research and Policy Advocacy

Our Response to the White Paper on Strategy for National Open Digital Ecosystems

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We are concerned that creating National Open Digital Ecosystems (NODEs) as envisioned in the White Paper could entrench existing problems with service delivery and hamper the growth of a free and fair digital economy. Our response is organised into two sections. Section I presents five overarching concerns with the White Paper that are summarised below:

  1. The need and objectives driving the creation of NODEs are unclear, as are the basis for the fifteen Guiding Principles guiding the design of NODEs delivery platforms. Digital infrastructure like NODEs should be built with clearly articulated objectives and motivations for building the architecture. A lack of clarity on objectives and motivations can adversely affect the design, implementation and governance of public digital infrastructure. Further, the White Paper sets out fifteen Guiding Principles that will guide the design and governance of NODEs delivery platforms. A lack of clarity in the objectives that underpin these Guiding Principles risks creating a contradiction or potential for ambiguity since it is not clear which objectives the design principles are supposed to be fulfilling or maximising.
  2. Purpose-agnostic NODEs without clear legislative backing would defy constitutional requirements that public digital systems must have specific and legitimate purposes to exist. NODEs should only be built with a clear legislative framework and without identifying a specified, limited, pre-determined purpose to fulfil this test. The Supreme Court of India, in Justice K.S. Puttaswamy (retd.) v Union of India & Ors (2017), set out a three-part test that must be fulfilled before accessing users’ personal data for public service delivery. Further, future legislation that could allow the creation of NODEs cannot legitimise the blanket interlinkage of subsequent databases. Each interlinking of data registries, data exchanges and stacks in NODEs should satisfy the three-part test to be valid and respectful of the users’ fundamental right to privacy.
  3. The operational model for NODEs in the White Paper can create challenges for Transparency, Governance and Accountability. The White Paper proposes an approach where private entities can build and govern delivery platforms. This creates three major concerns if they are not publicly accountable or structured to avoid incentive misalignment. First, governance issues can arise from misaligned incentives between government and co-opted private entities. These can lead to unfavourable outcomes such as lower private sector participation, creation of poor-quality infrastructure or creating perverse incentives like overcharging end-users when delivering them services via NODEs. Second, private entities involved in NODEs may not be subject to the same level of scrutiny and accountability as public entities. This can adversely affect institutional neutrality and the enforcement of accountability in NODEs. Third, using proprietary software to build delivery platforms raises concerns of reduced transparency, accountability and openness on NODEs.
  4. Digital-by-default governance strategies and poorly designed public infrastructures can create risks of exclusion and distress for low-income, marginalised communities. Any strategy for NODEs must learn from India’s past experience. Experiences from large-scale digital infrastructures and digital ecosystems adopted in India as well as other countries like the United Kingdom, USA, Australia and Estonia caution about grave failures of digital ecosystems. Some key concerns should be kept in mind while creating NODEs for service delivery.
    • A push for digital-by-default policies can lead to a system of exclusion-by-design. Digital-by-default approaches can have adverse implications for the poor and more vulnerable users in India who do not have proper access to digital interfaces.
    • Digitising services without considering the local political economy can make users more vulnerable and at the same time create room for corruption in government. Digitisation in the presence of inequalities and power structure can increase opacity, poor accessibility and poor data quality that can impose high costs on vulnerable users.
    • Interconnected databases can lead to technology failures at scale. Linking different databases in India through NODEs without being conscious of extant data quality issues can create major issues for the users and the government.
    • Lapses in cybersecurity can render users more vulnerable to economic harms, misuse of personal data and violation of the fundamental right to privacy.
    • The design of NODEs must consider a range of authentication mechanisms in addition to Aadhaar services.
  5. NODEs can pose risks to competition and systemic stability. The design of largescale digital infrastructure must be carefully undertaken to avoid eroding existing functional market structures or impeding competition in the market. Further, inadequate cyber security safeguards can have far-reaching consequences for systemic stability in large digital infrastructures like NODEs. These concerns can adversely affect service delivery on NODEs if they are not addressed properly.

Section II of the document presents specific responses to key questions for consultation presented in Chapter 7 of the White Paper. Our full response submitted to MeitY is available here, and the PDF is available here.


*Contributions to this consultation response were made by the members of the Future of Finance Initiative (FFI) and the Social Protection Initiative (SPI) at Dvara Research. The members contributing to this response include Srikara Prasad (Policy Analyst, FFI), Beni Chugh (Research Associate, FFI), Malavika Raghavan (Head, FFI), Nishanth K (Head, SPI), Aarushi Gupta (Research Associate, SPI), Anupama Kumar (Research Associate, SPI), Hasna Ashraf (Research Associate, SPI), Sarah Stanley (Consultant, FFI), Anubhutie Singh (Policy Analyst, FFI), Lakshay Narang (Intern, FFI), Anognya P (intern, SPI) and Janani AP (Intern, SPI).

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