Why Delaying Tech Reforms Hurts Everyone

India has been at the forefront of building digital public infrastructure for governance reforms.

- R S SHARMA

Foundational systems like Aadhaar and Unified Payments Interface (UPI) are horizontal in nature, enabling multiple applications. Aadhaar, for instance, not only offers a unique identity to every resident but also supports online authentication across services. Over time, services like e-KYC, e-Sign, and DigiLocker have been built on Aadhaar, simplifying tasks such as opening bank accounts, obtaining SIM cards, filing tax returns, and storing digital documents.

Yet, despite these advancements, India has often been slow to adopt these innovations. The delays have cost us efficiency, opportunity, and citizen convenience. Here are a few telling examples.

Aadhaar as KYC for banking: One of Aadhaar's earliest envisioned uses was for know your customer (KYC) requirement for opening bank accounts. While discussions with the finance ministry and the Reserve Bank of India (RBI) began in 2010-11, it wasn't until August 2013 that the RBI formally allowed Aadhaar-based KYC for banks.

The impact was transformative. Aadhaar e-KYC drastically reduced customer onboarding costs, making financial services viable for low-income individuals. As a result, financial inclusion surged, with 82 per cent of Indian adults now holding bank accounts. Had this reform come earlier, millions could have accessed financial services sooner.

Aadhaar for mobile SIMs: A similar delay occurred in telecom. Efforts to get the Department of Telecommunications (DoT) to accept Aadhaar for SIM issuance began in 2011-12. But vague "security concerns" held it back for over five years. Eventually, in 2016, Aadhaar was accepted for SIM verification.