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The future of ‘civic’ technologies after COVID-19

In 1973, the British economist Ernst Schumacher wrote his manifesto “Small is Beautiful”, and changed the world. Schumacher’s prescription — to use technologies that were less resource-intensive, capable of generating employment, and “appropriate” to local circumstances — appealed to a Western audience that worried about feverish consumption by the ‘boomer’ generation. Silicon Valley soon seized the moment, presenting modern-day, personal computing as an alternative to the tyranny of IBM’s Big Machine. Meanwhile, in India too, the government asked citizens to embrace technologies suited to the country’s socio-economic life. Both had ulterior motives: the miniaturisation of computing was inevitable given revolutions in semiconductor technology during the sixties and seventies, and entrepreneurs in Silicon Valley expertly harvested the anti-IBM mood to offer themselves as messiahs. The government in New Delhi too was struggling to mass-produce machines, and starved of funds, so asking Indians to “make do” with appropriate technology was as much a political message as it was a nod to environmentalism.

And thus, India turned its attention to mechanising bullock carts, producing fuel from bio-waste, trapping solar energy for micro-applications, and encouraging the use of hand pumps. These were, in many respects, India’s first “civic”, or socially relevant technologies.

The “appropriate technology” movement in India had two unfortunate consequences. The first has been a celebration of jugaad, or frugal innovation. Over decades, Indian universities, businesses and inventors have pursued low-cost technologies that are clearly not scaleable but valued culturally by peers and social networks. (Sample the press coverage every year of IIT students who build ‘sustainable’ but limited-use technologies, that generate fuel from plastic or trap solar energy for irrigation pumps.) Second, the “small is beautiful” philosophy also coloured our view of “civic technologies” as those that only mobilise the citizenry, out into farms or factory floors. Whether they took the form of a hand pump, solar stove or bullock cart, these technologies did little to augment the productivity of an individual. However, they preserved the larger status quo and did not disrupt social or industrial relations as technological revolutions have historically done. 

Nevertheless, there has always been a latent demand in India for technologies that don’t just mobilise individuals but also act as “playgrounds”, creating and connecting livelihoods. When management guru Peter Drucker visited post-Emergency India in 1979, Prime Minister Morarji Desai sold him hard on “appropriate technology”. India, Drucker wrote, had switched overnight from championing big steel plants to small bullock carts. Steel created no new jobs outside the factory, and small technologies did not improve livelihoods. Instead, he argued, India ought to look at the automotive industry as an “efficient multiplier” of livelihoods: beyond the manufacturing plant, automobiles would create new sectors altogether in road building and maintenance, traffic control, dealerships, service stations and repair. Drucker also pointed to the transistor as another such technology. Above all, transistors and automobiles connected Indians to one another through information and travel. Drucker noted during his visit that the motor scooter and radio transistor were in great demand in even far-flung corners, a claim that is borne by statistics. These, then were the civic technologies that mattered, ones that created playgrounds in which many could forge their livelihoods. 

The lionisation of jugaad is an attitudinal problem, and may not change immediately. But the task of creating a new generation of civic technologies that act as playgrounds can be addressed more readily.  In fact, it is precisely during crises such as the ongoing COVID-19 pandemic that India acutely requires such platforms.


Consider the post-lockdown task of economic reconstruction in India, which requires targeted policy interventions. Currently, the Indian government is blinkered to address only two categories of actors who need economic assistance: large corporations with their bottom lines at risk, and at the micro-level, individuals whose stand to lose livelihoods. India’s banks will bail out Big Business, while government agencies will train their digital public goods — Aadhaar, UPI, eKYC etc — to offer financial assistance to individuals. This formulaic approach misses out the vast category of SMEs who employ millions, account for nearly 40% of India’s exports, pull in informal businesses into the supply chain and provide critical products to the big industries.

To be sure, the data to identify SMEs (Income Tax Returns/ GSTN/ PAN) exists, as do the digital infrastructure to effect payments and micro-loans. The funds would come not only from government coffers but also through philanthropic efforts that have gained steam in the wake of the pandemic. However, the “playground” needs to be created — a single digital platform that can provide loans, grants or subsidies to SMEs based on specific needs, whether for salaries, utilities or other loan payments. A front-end application would provide any government official information about schemes applied for, and funds disbursed to a given SME.

Civic technologies in India have long been understood to mean small-scale technologies. This is a legacy of history and politics, which policymakers have to reckon with. The civic value of technology does not lie in the extent to which it is localised, but its ability to reach the most vulnerable sections of a stratified society like India’s. The Indian government, no matter how expansive its administrative machinery is, cannot do this on its own. It has to create “playgrounds” — involving banks, cooperative societies, regulators, software developers, startups, data fiduciaries and underwriting modellers — if it intends to make digital technologies meaningful and socially relevant.  

Please Note: A version of this was first published on Business Standard on 17 April 2020

About the author: Arun Mohan Sukumar is a PhD candidate at the Fletcher School, Tufts University, and a volunteer with the non-profit think-tank, iSPIRT. He is currently based in San Francisco. His book, Midnight’s Machines: A Political History of Technology in India, was published by Penguin Random House in 2019

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The history of technology is about to change radically. India must seize the moment

There are no atheists in foxholes, and there appear to be no capitalists in a global pandemic either. The head of Honeywell’s billion-dollar GoDirect Trade platform, which uses a permission-based blockchain to buy and sell aviation parts, declared on March 20 that American corporations had a “walled-garden” approach to data. “They need to start sharing data, a huge paradigm shift”, said Lisa Butters. Only a couple of weeks ago, Honeywell had been defending the virtues of a permission-based system, saying enterprises “needed some constraints to operate in”. 

What a difference a few days can make. 

Historically, the aviation industry has been one of the most secretive among ‘Big Tech’ sectors, with its evolution tied intimately to the Second World War, and the US-Soviet Cold War rivalry that followed soon after. Concerns around China’s theft of aerospace IP was among the foremost drivers behind the Obama administration’s negotiation of the 2015 agreement with China to prohibit “economic espionage”. It is the ultimate “winner-takes-all” market — but Boeing, its lynchpin, has now approached the US government for an existential bailout. Honeywell’s call for a “paradigm shift” is proof that the sector is not thinking just in hand-to-mouth terms. The aviation sector may get a lifeline for now, but as an industry forged by a global war, it knows more than most that a transformational moment for technology is upon it, which needs to be seized. 

As the economist Branko Milanović has highlighted, the correct metaphor for the Covid-19 pandemic and ensuing crisis is not the Great Recession of 2008, but the Second World War. To win WWII, and retain its military superiority, the United States pioneered technology complexes that placed innovation at the trifecta of a university lab, government, and market. (The blueprint for this model was drawn up in 1945 by Vannevar Bush, founder of Raytheon and director of the Office for Scientific Research and Development, and presented to the US government. The document was titled, “Science: The Endless Frontier”.) This was by no means a Western endeavour alone. Several countries, including India, followed suit, trying to perfect a model of “organised science”. In India, the Council for Scientific and Industrial Research was the totem for this effort and created a centralised network of national labs. The primary difference between Western models and ones in developing countries like India was the role of the state. In the US, the state retained regulatory agency over the process of technological innovation, but gradually ceded into the background as the Boeings, Westinghouses, GEs, Lockheed Martins, and IBMs took over. In India, the state became both the regulator and purveyor of technology. 

India’s attempts to create “national champions” in frontier technologies (think Hindustan Antibiotics Ltd, Electronics Corporation of India Ltd, Defence Research and Development Organisation, etc) failed because the state could not nimbly manufacture them at scale. Even as India pursued “moonshots”, those businesses in the United States that were incubated or came of age during the Second World War began to occupy pole positions in their respective technology markets. Once those markets matured, it made little sense for America to continue creating “organized” technology complexes, although research collaborations between universities and the federal government continued through the National Science Foundation. The banyan-ization of the internet and Silicon Valley — both seeded by generous assistance from the US Department of Defence — into a market dominated by the FAANG companies affirms this shift.

In the wake of the Covid-19 pandemic, however, the tables are turning. The United States is not only shifting away from “moonshots” but also pivoting towards “playgrounds”, settling on a model that India has perfected in the last decade or so.

The United States has often sought to repurpose private technologies as public utilities at key moments in its history. Communications technology was built and moulded into a public good by the American state. It was US law that enabled patent pooling by Bell Labs in the 19th century, leading to the creation of a “great new corporate power” in telephony. A few decades into the 20th century, American laws decreed telephone companies would be “common carriers”, to prevent price and service discrimination by AT&T. Meanwhile, both railroads and telecommunications providers were recognised as “interstate” services, subject to federal regulation. This classification allowed the US government to shape the terms under which these technologies grew. IT is precisely this template that Trump has now applied to telehealth technology in the US. Tele-medicine services could not previously be offered across state lines in the US, but the US government used its emergency powers last week to dissolve those boundaries. And on March 18, President Trump invoked the Defence Production Act, legislation adopted during the Korean War and occasionally invoked by American presidents, that would help him commandeer private production of nearly everything, from essential commodities to cutting-edge technologies. 

Invoking the law is one thing, executing it is another. Rather than strong-arming businesses, the Trump administration is now trying to bring together private actors to create multiple “playgrounds” with an underlying public interest. The Coronavirus Task Force was the first of its kind. The Task Force brought together Walmart, Google, CVS, Target, Walgreens, LabCorp and Roche, among others to perform singular responsibilities aimed at tackling the coronavirus pandemic. Walmart would open its parking lots for testing, Google would create a self-testing platform online, Roche would develop kits, LabCorp would perform high-throughput testing, and so on. The COVID-19 High-Performance Computing Consortium, created on March 23, is another such playground. It includes traditional, 20th-century actors such as the national laboratories but is doubtless front-ended by Microsoft, IBM, Amazon and Google Cloud. The Consortium aims to use its high computational capacity to create rapid breakthroughs in vaccine development. Proposals have been given an outer limit of three months to deliver. 

In some respects, the United States is turning to an approach that India has advanced. To be sure, we may not currently be in a position to develop such a playground for vaccine R&D and testing at scale. But India is well-positioned to create the “digital playgrounds” that can help manage the devastating economic consequences of the Covid-19 epidemic. There is a universal acknowledgement that India’s social safety nets need to be strengthened to mitigate the fallout. One analyst recommends “a direct cash transfer of ₹3,000 a month, for six months, to the 12 crores, bottom half of all Indian households. This will cost nearly ₹2.2-lakh crore and reach 60 crore beneficiaries, covering agricultural labourers, farmers, daily wage earners, informal sector workers and others.” The same estimate suggests “a budget of ₹1.5- lakh crore for testing and treating at least 20 crore Indians through the private sector.” 

The digital public goods India has created — Aadhaar, UPI and eKYC — offer the public infrastructure upon which these targeted transfers can be made. However, cash transfers alone will not be enough: lending has to be amplified in the months to come to kickstart small and medium businesses that would have been ravaged after weeks of lockdown. India’s enervated banking sector will have meagre resources, and neither enthusiasm or infrastructure to offer unsecured loans at scale. “Playgrounds” offers private actors the opportunity to re-align their businesses towards a public goal, and for other, new businesses to come up. Take the example of Target, which is an unusual addition to the Coronavirus Task Force, but one whose infrastructure and network makes it a valuable societal player. Or Amazon Web Services in the High-Performance Computing Consortium, which has been roped in for a task that is seemingly unrelated to the overall goal of vaccine development. 

If digital playgrounds are so obvious a solution, why has India not embraced it sooner? None of this is to discount the deficit of trust between startup founders and the public sector in India. Founders are reluctant to use public infrastructure. It is the proverbial Damocles’ sword: a platform or business’ association with the public sector brings it instant legitimacy before consumers who still place a great deal of trust in the state. On the other hand, reliance on, or utilisation of public infrastructure brings with it added responsibilities that are unpredictable and politically volatile. To illustrate, one need only look at the eleventh-hour crisis of migrating UPI handles from YES Bank in the light of a moratorium imposed on the latter earlier this month. On the other hand, the government retains a strong belief that the private sector is simply incapable of providing scalable solutions. In most markets where the India government is both player and regulator, this may seem a chicken-and-egg problem, but c’est la vie.

Nevertheless, there are milestones in history where seemingly insurmountable differences dissolve to reveal a convergence of goals. India is at one such milestone. A leading American scientist and university administrator have called the pandemic a “Dunkirk moment” for his country, requiring civic action to “step up and help”. By sheer chance and fortitude, India’s digital platforms are poised to play exactly the role that small British fishing boats played in rescuing stranded countrymen on the frontline of a great war: they must re-imagine their roles as digital platforms, and align themselves to strengthen the Indian economy in the weeks to come. 

Arun Mohan Sukumar is a PhD candidate at the Fletcher School, Tufts University, and a volunteer with the non-profit think-tank, iSPIRT. His book, Midnight’s Machines: A Political History of Technology in India, was recently published by Penguin RandomHouse.

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When one door closes…

An inspiring effort in response to COVID-19

Last Tuesday, for the first time in recorded history, India pulled the emergency brakes on all of the complex interactions that make up the economy and society of 1.3 Billion Indians.

We’re going to see a lot more cascading effects of bringing almost all economic activity to a sudden and near-complete stop. Some of those effects are already visible and others will reveal themselves over time. One thing that’s easy to predict is that this disaster, like most others, will affect Bharat more than it does India.

However, at iSPIRT, we remain impatient optimists for Bharat. It does not suffice for our volunteers to simply predict the future; we want to help create it. When the lockdown hit, we could immediately see that the country’s messy supply chains would be hard-pressed to disentangle essential services from non-essential ones. On the very first day of the lockdown itself, you may have seen videos or news about the police using their lathis on innocent essential service providers like doctors.

This is undeniably tragic, but at its heart is an information and social trust issue inherent in India. When you distil the problem, it comes down to how does the administration identify those travelling for essential-services vs those who are not. Consider this, Swiggy and Zomato alone – who only work on the last mile of one category of food – claim to have a fleet of close to 500,000. For the entire supply chain, even restricted to essential items only, will require authorisations for millions of people and another few million vehicles.

So today, we’re announcing the release of an open-source tool called, ePass. ePass is a tool to help the administration issue digital lockdown passes. These e-Passes are secure and can be verified when needed. iSPIRT got this solution going from zero to launch in less than 4 days. In the following interview, Tanuj Bhojwani speaks with Sudhanshu Shekhar, who led the effort to build the tool and Kamya Chandra, who helped liaison with the Karnataka administration.

Tanuj Bhojwani: Hey Sudhanshu, let’s start with what e-Pass is?

Sudhanshu Shekar: Sure, so the objective is to make sure that those who are on the road providing essential services or regular citizens seeking them can face minimal friction from the authorities.

We imagine a simple 4-step flow

  1. Individuals, such as you or me, or businesses providing essential services, can apply for a pass.
  2. The administration sees these requests digitally, and can authorise them from the backend, either manually or via automated rules.
  3. People can download their digitally signed passes on their devices
  4. The on-ground personnel, such as the police, can verify the curfew pass is valid by scanning it.

We’ve built tools for each part of that flow.

When we started working with the administration, they gave another great suggestion. If the beat officers could provide pre-authenticated “tokens” – like a gift-code, we could make this process even more convenient for some essential service providers. For example, they could distribute tokens to all the informal businesses in a mandi in one go, helping bring the supply-chain back online that much faster.

Tanuj Bhojwani: And you’ve made this open-source. How can a local administration use this?

Kamya Chandra: Everything is a configuration. The administration will have to decide who the approving authorities are. An admin dashboard allows bulk uploads, approvals, tracking statistics of issued passes, etc. It also allows them to configure timings, the validity of the pass, which identity fields are required, etc.

And finally, they have to instruct their beat officers to download the verification app and use it.

Tanuj Bhojwani: so the local government hosts this themselves?

Sudhanshu Shekar: Yes, the governments need to host this themselves, either directly or through a service provider. As iSPIRT, we have only provided the code and will not be providing any managed services. Even the code is open-sourced for others to use and remix as they see fit.

Tanuj Bhojwani: iSPIRT doesn’t work with the Karnataka administration normally, so how did this all happen? How did the team come together?

Sudhanshu Shekar: Sharad called me at 8 pm Tuesday or Wednesday? Maybe it was 8 in the morning. I’m no longer sure. What’s a day anyway? *laughs*

Kamya Chandra: I want to interrupt here and say I am super impressed by Sudhanshu and the rest of the team. No matter how little sleep they got, they didn’t let it affect their judgement or mood. Their decisions were always geared towards what’s the best that’s needed.

Sudhanshu Shekar: Thank you. We’re all just doing what we can.

But basically, on Monday, as Karnataka started enforcing curfew, we realised that people are going to need curfew passes. We started kicking around the idea on Monday, but there was no team. The next night the PM announced a nation-wide lockdown. We knew this was going to be a problem everywhere.

On Wednesday, the Karnataka administration also got in touch with Sharad asking for a similar solution, and they made it clear they need the solution in two days.

Sharad called and said, “I’m going to ask you about something, and you’re going to want to do it, but be really sure and think about it. This is a hard project and has very tight timelines. Everybody will understand if you say no”.

Sharad was right, I did want to do it, so I said yes and immediately got to work. I reached out to several friends and iSPIRT volunteers for help and a few – namely Mayank, Manish, Vibhav, Mohit and Ashok – agreed to help. It was easy to convince everybody, given the importance of fighting COVID. Manish has a few friends in China and was very aware about the seriousness of this situation. We quickly agreed on the basic product outline and started working. Wednesday was a flurry of activity and we got frequent reviews done with the Administration.

We realised we needed an admin console for the police to manage pass issuance. None of us was really an expert in building front-end applications and therefore, I started making calls trying to find an expert. Through referrals, I managed to reach Vishwajeet at 12 pm. I spoke to him about the project, its importance and the strict timelines. I told him we’d fail without him!

Tanuj Bhojwani: So you called a guy you’ve never met and asked him to deliver a complex task, on a ridiculous deadline for no pay nor any certificate or recognition. How did he respond?

Sudhanshu Shekar: He called his office to take a holiday. Vishwajeet sat down, worked for 15 hours straight, and delivered before time!

Kamya Chandra: *laughs* I want to add that this team, which did not know each other, did sleep shifts – including Vishwajeet, who became a volunteer that afternoon. I remember Sudhanshu taking turns with the devs to sleep at night in 2-hour batches just to keep the engine going. I’d run demos with the administration for feedback in the morning, while they all got a little shut-eye. From afternoon, they’d repeat another day and night of development.

Tanuj Bhojwani: Wow, that’s a lot of effort, and what sounds like very little sleep! What was happening on the police end, Kamya? 

Kamya Chandra: Honestly, I went in with a negative impression of the police and administration – because all you see are videos of people being beaten. However, I was very impressed with the few people I was working with. They were very knowledgeable about the challenges they were going to face operationally. Also, it was obvious they were doing their best. The first call I got from them was at 11.45pm!

They made time for our demos, gave excellent, considered feedback on all of it that has definitely helped the product. For example, we added a quick and easy way to verify the ID alongside the QR, so that it can work even if the beat policeman verifying does not have a smartphone.

All of this was happening by a remote team in lockdown. I was in Delhi talking to officers in Karnataka. Other than Sudhanshu, I’ve never met any of the other volunteers! In every other organisation, this kind of a crisis response doesn’t happen as smoothly even if the team knows each other. Anywhere else, it would have been near impossible if the team didn’t know each other.

Tanuj Bhojwani: Oh! I assumed they were all from Bangalore?

Sudhanshu Shekar: No.

 Mayank is in Bundi, a small town in Rajasthan. Kamya is in Delhi. I’m in Indiranagar, Bangalore. Ashok, our design guy, is in Koramangala and Mohit – I have no idea where he stays – I have never met him *everyone laughs*

Kamya Chandra: Knowing everyone’s location is harder, we still don’t know full names! One of the volunteers who helped us test the security of the product was Sasi Ganesan. I spelt his first and last name wrong in the first email I sent to him! He still helped though. On the 4th day of working together, I needed everyone’s last names, I still only knew Sudhanshu’s and Sasi’s!

Compared to the places I’ve worked before, I was surprised to see Pramod send an email with such savage truths. That’s a great example of how radical candour works, why it is in direct opposition to corporate culture.

Tanuj Bhojwani: *laughs* What were the “savage truths” in this email?

Kamya Chandra: To be fair to Pramod, it was more surprising than savage. Pramod said DO NOT GO LIVE (in bold and underline) until security and related aspects weren’t complete. The contents weren’t particularly shocking, but that he sent it to all of us – including people he barely knew. There was no secrecy or pretending to be bigger than we are. All our failures were also publicly available to a team we’ve never worked with before or met. It’s quite a unique experience.

Sudhanshu Shekar: Yeah, we were planning on going live on Friday, and we knew we needed to do security testing before we went live. Pramod’s email was a good one, and all fair asks about security, usability and data retention. He connected us to another iSPIRT volunteer, Sasi Ganesan for help. Ten hours before the scheduled launch, Sasi wrote back with a list of tasks we must do BEFORE we go live. This Thursday night email doubled our todo list. Thankfully, we were able to pull in Bharat, Sireesha and a few others from Thoughtworks to help close these tasks But at the time it felt brutal, we realised this was going to be a very hard few hours.

Kamya Chandra: Yeah, I think this is around the time Rohit started helping us enhance our UX. To me, this email was a clear indication of the high bar every iSPIRT volunteer must meet. Tight timelines or urgent needs are not enough to excuse sloppiness. I am glad we have senior volunteers such as Pramod to keep the bar high.

Tanuj Bhojwani: But I believe this story has a twist?

Kamya Chandra: Well, we did the demos in time, and everyone seemed very impressed. Unfortunately, the Karnataka administration decided to go with someone else. Their decision to go with someone else was disappointing for us.

However, they are policymakers making scale decisions. They probably had to keep many balls in the air and have redundancy. It’s good they have backup plans for backup plans.

They handled it with grace and were very kind about it. They sent a thank you and a commendation letter to each of our volunteers. One of the senior lady officers asked me – do you only take techies? I do not have a computer science degree, but I want to volunteer!

I told her I was an economist too and that she should definitely volunteer.

Sudhanshu Shekar: For me, the toughest part was when I heard the news that our work won’t be going live on Friday like I had promised all these guys. I was really sad. For about an hour, I tried to fight the decision, but then I realised that I would have to do the difficult thing and break the bad news to a bunch of volunteers who’ve slept less than 6 hours total in the last 72 hours.

What happened next is what surprised me the most about this whole thing.

All of them – every single one – took it so well! They all said something to the effect of working on a solution with other volunteers felt better than not working on one and worrying about the lockdown.

I thought this is the end of the line, but it was they who cheered me up and suggested we should open-source it. I was hoping to tell the volunteers to get some rest. Instead, these guys were so passionate that they worked for a couple more days to complete the documentation, which is why we were able to launch ePass today!

Tanuj Bhojwani: Wow. That’s quite a lot of team-spirit for a team that has never even met! So what happens now that this is open-source? How do you expect it will get traction?

Kamya Chandra: The decision to open-source paid off! Even though Karnataka didn’t take ePass, the officers messaged their batchmates and told them about what the volunteers did.

Sudhanshu Shekar: Now, we have demos scheduled with several other state governments as well as a few national ministries. We think this could be live in at least a couple of places soon.

Tanuj Bhojwani: That sounds like a fairy tale ending. Do you have any advice for anyone who is reading this and wants to volunteer?

Kamya Chandra: I used to work at the World Bank in DC, and we were trying to implement national-level digital systems in many countries. When we had technical challenges there, I was often told to get on a video call with iSPIRT volunteers for guidance and inputs. The more I interacted with them, the more I realised there is magic here to learn from. So I gave up my diplomatic passport and got on a plane to Bangalore!

So my advice is that you should try volunteering even if you’re many, many oceans away!

Sudhanshu Shekar: *laughs* I have a more straightforward test than Kamya’s for those who want to volunteer. These are also the three reasons I volunteer.

First, Societal Impact. You feel useful because you get to work on something that genuinely helps people.

Second, exposure to a wide variety of topics – such a different set of problems – you don’t exactly stick to your lane. Hence, you also meet people with very diverse backgrounds and work experiences. Because my peers are not age-bracketed with me, I feel like there are many lessons that I usually would’ve learned in ten years of my career, I’ve learned already at iSPIRT. 

Third, you draw energy from others’ passion. It’s just amazing to go to work with people like this every day. I’ve realised iSPIRT is a self-selecting group – it’s only the people who seek to find it, find it. It is not easy to be a volunteer, because the environment is open and the volunteers are self-driven, people will clearly be able to see if you can walk the talk. When you have people respected in a system not for who they are, but what they do, it is magical for everyone.

Tanuj Bhojwani: That is very true. Thank you for the chat!

Like Sudhanshu says, Volunteering at iSPIRT is hard and definitely not for everyone. However, if one or more of these reasons resonate with you, you should read the volunteers handbook to learn more about balloon volunteering.

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Union Budget 2020: A Good Start That Needs Swift and Decisive Action


 “Words can inspire but only action creates real change.” 

Presenting the second Union Budget, the Finance Minister asserted that entrepreneurship has always been the strength of India and proposed a number of measures and policy changes to help boost the Indian startups. The Budget was a step in the right direction, but these are just baby steps for an economy that needs giant leaps to become an innovation hub. 

We are also hopeful that the investment clearance and advisory cell will go a long way in strengthening the startup environment and improve the ease of doing business within our community. The proposed 5-year deferment of tax payments on ESOPs by startup employees in the Union Budget, we believe, is a step in the right direction. However, it does not satisfactorily address the complete concerns and other pain points that have been plaguing the startup ecosystem. 

Firstly, the ESOP taxation change, in its current form, applies only to around 200 startups recognised by the IMB (Inter-Ministerial Board), thereby, severely restricting its scope. It is only fair that all DPIIT-registered startups enjoy the benefits of the proposed changes equally. Secondly, we strongly believe that ESOP taxation must be revised as per global norms, else, it would become an ineffective tool of talent acquisition and retention. 

We also require cohesive measures towards improving the ease of doing business and strengthening the overall ecosystem. To ease the working capital crunch faced by startups, a lowering of TDS rates on payments to DPIIT registered startups and MSMEs is necessary. To enable greater rupee capital participation, allowing universities and public trusts to invest in Alternative Investment Funds (AIF) will make a considerable impact. Achieving tax parity between listed and unlisted securities, which at present vary significantly, will enable startups to attract greater investments. The provision of R&D benefits for companies will help spur innovation and startup activity in India, enabling a structural shift in the economy towards building high-value capabilities. 

We believe that more cross-cutting measures across industries are necessary and so is the reduction of frictions between the businesses and government players. This will help us to cover more ground in fulfilling the mission of making India a high-value, innovation economy. 

Overall, Union Budget 2020 does reflect the Government’s keenness in improving the ease of doing business but considering that the lofty goals we have set out to achieve, good intentions and keenness do not suffice. These must be augmented with robust policy changes, as well as, swift and decisive action to strengthen and accelerate the startup ecosystem. 

India is at a crossroads and must decide how she is going to traverse the next decade and champion the change the world needs. It reminds one of Robert Frost, “Somewhere ages and ages hence:

Two roads diverged in a wood, and I—I took the one less travelled by,

And that has made all the difference”

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Union Budget 2020 – iSPIRT Recommendations

India is among the top startup ecosystems in the world with home to 50,000+ startups and 3,500+ funded startups growing at a rapid pace at 30 per cent. While the future outlook of the Indian startup ecosystem is definitely promising, further accelerated growth can happen only if the government introduces more startup-friendly policies, other than the existing support under ‘Startup India’.

With Budget 2020 less than two months away, the startup ecosystem is hoping to get a major boost with respect to the following measures:

  • Improve ease of doing business for startups.
  • Attract domestic and foreign investors.
  • Increase working capital flow for startups.

iSPIRT has made a 13-point recommendation list for Budget 2020 with respect to the above-mentioned measures:

1. Remove the TDS payment for DPIT registered Startups

Currently, payments to DPIT registered startups are subject to Tax Deduction at Source (TDS) of 10% under section 194J. It takes at least 1-2 years for startups to get refunds after filing of their returns, which blocks their working capital for that time period. 

2. Harmonise the Tax Rate and Holding Period between Listed and Unlisted Securities of Startups 

The higher holding period and higher tax rate disincentivise investments into startups from Indian sources. Globally, no such differentiation exists.

This recommendation seeks:

  • Reduction of the holding period for unlisted securities to 12 months from the current 24 months.
  • Levy of a lower tax rate of 10% on the sale of unlisted securities.
  • Removal of the “superrich” surcharge of 25%/37% on the sale of unlisted securities.

3. Change in the taxation of ESOPs for Startups:

The existing definition of Rule 3(8)(iii) of the Income Tax Rules, 1962 does not take into consideration the discrepancies in the determination of ‘Fair Market Value’.

The new recommendation seeks amendment to this rule as as per Rule 11UA(1)(c)(b), provided such fair market value shall not be less than the exercise price.”

4. Clarification on the February 19th, 2019 DPIIT circular on “Angel Tax” with regard to Form 2

This circular states that the exemption lapses in the case the startup has or will invest or conduct any of the activities below for a period of 7 years after investment, inter alia:

  • Make capital contributions to other entities, 
  • Make investments in shares and securities, 
  • Give loans and advances (except in the case of lending startups

The recommendation seeks an amendment to this notification

  • Extend the “business model” test applicable to all the other investments mentioned in Form 2 to all points mentioned therein
  • Allow Startups to make Loans and Advances in the ordinary course of business provided that the PAN of the recipient is reported
  • Allow startups to invest into shares and securities and make capital contributions provided that such downstream investments do not make further investments into any of the other points listed in Form 2

5. Allow for AIF expenses to be capitalised/passed-through

Expenses of an AIF can add up to up to 25%-30% of its corpus during the lifetime of a scheme, making a large chunk of the fund is a “dead-loss”.

The new recommendation seeks AIF expenses to be capitalised as the Cost of Acquisition or allowed to be set off against the income.

6. Classification of securities held by AIFs as Capital Assets by amending section 2(14) of the Income Tax Act, 1961.

There is still friction between the startups, investors and income tax department with respect to taxation of short-term gain from the sale of securities under AIF.

The new recommendation seeks an amendment to Section 2(14) as “any securities held by a Foreign Institutional Investor or AIF which has invested in such securities in accordance with the regulations made under the SEBI. 

7. Pass-Through Status for CAT III AIFs

Unlike CAT I and CAT II AIFs, CAT III AIFs do not have pass-through tax status, rendering their income to be taxed at the maximum marginal rate for their income earned, regardless of the tax status of the underlying investor.

The new recommendation seeks an amendment to Section 115UB and Section 10(23FBA) by including CAT III AIFs.

8. Allow Universities and Public Trusts to invest in AIFs

Currently, investments are allowed in SEBI registered Mutual Funds or notified Mutual Funds set up by a public sector bank or a public sector financial institution.

The new recommendation seeks an amendment to this section to include ‘Units of an Alternative Investment Fund registered with the Securities and Exchange Board of India”

9. Notify all SEBI registered AIFs as “long-term specified assets” under section 54EE

Section 54EE was introduced on April 1, 2016, to give capital gains exemption of Rs 50 lakhs for any gains invested into “long-term specified assets”, defined as “a unit or units, issued before the 1st day of April 2019, of such fund as may be notified by the Central Government in this behalf”

So far, the Central Government hasn’t notified any such funds, so no tax-payer has been able to avail of this benefit.

The new recommendation seeks issuance of a Central Government notification to notify all SEBI registered AIFs as “long-term specified assets” under section 54EE and announce measures to extend this to April 1, 2025.

10. Time-bound response from the Inter-Ministerial Board (IMB) and allowing all startups to reapply

The IMB has not been effective yet in timely responses to startups.

The new recommendation proposes DPIIT to issue a notification stating that:

  • IMB will respond in 60 days from the date of submission by the Startup.
  • Startups who were denied IMB recognition prior to February 19th, 2019 can re-apply for IMB recognition once again under the new criteria.

11. Exempt Software product Companies from Softex

Software product exporters are required to file SOftex form to report the inward remittance on export invoices in convertible foreign currency. However, Software products have a publicly listed MRP/List price and hence do not require any valuation.

The new recommendation seeks RBI to exempt software product companies from filing Softex and create a separate category of Purpose code for disposal of inward remittances by authorised dealers.

12. Creation of aHSN code for Software Product Startups

Under the GST regime, all IT Software has been treated as “Service”.  Yet, there exists HSN codes and SAC codes both. 

It is recommended that an HS code classification for specific categories can be issued using the last 2 digits (first 6 Digits being defined under international system). 

13. R&D Credits for Software Product Companies 

As startups and young software product companies don’t have taxable profits, they are unable to take advantage of current R&D tax benefits that involve setting off R&D expenses against taxable profits. To overcome this limitation, they should be allowed a deferred tax credit for up to 7 years after the R&D investment.

You can read about Budget Representation 2020 in detail here.

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#8 Call for Volunteers: Designing Digital Infrastructure for Healthcare at National Scale

Why Healthcare?

Interacting even briefly with the healthcare system reveals the issues that plague the sector in India: a severe shortage of high-quality doctors, nurses, or medical supplies (and a lack of information on where the best are); misdiagnoses or late diagnoses; overcrowding and long waits in public hospitals; overpriced and over-prescribed procedures and in private hospitals; a complicated insurance claim system; and significant gaps in health insurance coverage. Those who have worked on trying to improve the healthcare system know the systemic challenges: misaligned incentives in care delivery, a lack of health data to coordinate care, low state capacity, and the political battles between states and the Centre. Yet not one of us is spared bouts of illness or other health incidents over our lifetime. We have no choice but to work with this system. And when it doesn’t function effectively, the largest effects are felt by the poorest: productivity losses and income shocks caused by health issues have a way of spiralling individuals on the cusp of economic well being back into poverty. 

Designing for high quality, affordable, and accessible healthcare in India is a challenging societal problem worth solving, with huge potential spillover benefits.

iSPIRT in Healthcare

At iSPIRT, we have started to develop an approach to dealing with complex societal problems at national scale. Our work on India Stack and financial inclusion taught us that public digital infrastructure can create a radical transformation in social outcomes when designed with a regulated and shared back-end that enables a number of (sometimes new!) private players to innovate on the front end to deliver better services. After all, innovative companies like Uber or Amazon are built on digital infrastructure: the TCP/IP Internet protocol and GPS systems that were both funded by public research. iSPIRT targets societal challenges by setting an ambitious target that forces us to think from first principles and innovate on the right digital public goods – which then catalyses a private ecosystem to help reach the last mile and solve the challenge at scale.

Over the last three years, members of our Health Stack team have been thinking deeply about how to design for a radical transformation in healthcare outcomes. We have developed a trusted working relationship with the National Health Authority and the Ministry of Health to better understand their operations and the issues at play. Our approach to addressing the challenge is evolving every day, but we’ve now developed a hypothesis around a set of building blocks that we believe will catalyse the health system. These blocks of digital infrastructure will, we hope, improve capacity at the edges of the system and realign institutional incentives to solve for long term holistic healthcare for all. 

Health Stack Digital Building Blocks Overview (Work in Progress!)

Some further teasers to our approach are included in the attached writeup which provides an overview of some of the more mature building blocks we hope to implement in the coming year. 

We’re striving for an end state of healthcare that looks something like this (cut by population type on the left):

These ideas were presented by the team recently to Bill Gates in a closed-door meet last month (who said he was excited to see what we could accomplish!)

We need your help!

To help shape our ideas and make them a reality, we need more volunteers — particularly those with the following expertise:

  1. Technical Experts (e.g. microeconomists or engineers): We have a few building blocks with broad design principles that need fleshing out – for instance, a Matching Engine to between individuals and doctors/hospitals. If you are a microeconomist (especially if you have thought about bidding/auction design for a matching engine, and more generally want to solve for misaligned incentives in market structure) or you’re a techie interested in contributing to solve a problem at a national scale, please reach out! Prior expertise in healthcare is not a prerequisite. Also, if you’ve looked through the document and find a block where you think your technical expertise could help us build, certainly let us know. 
  2. Current and Future HealthTech Entrepreneurs: Often, a successful health tech startup requires some public infrastructure to be successful. For instance, a powerful rating and recommendation app need a trusted electronic registry of doctors and hospitals providing core master data. Many of our Health Stack modules are designed to catalyse private sector participation and market potential for better products and services, which in turn produce better outcomes for individuals. If you are interested in helping design public infrastructure that your company could use or are a potential health tech entrepreneur interested in learning more about the ecosystem by building for it, please let us know!
  3. Healthcare Policy/Program Implementation Expertise: Field experience in healthcare delivery is invaluable – it gives us a true sense of the real challenges on the ground. If you’ve worked in delivering healthcare programs before with government, a non-profit, the private sector, an international organisation, or philanthropy and have ideas on what’s needed for an improvement in the sector at national scale, we’d love to hear from you. 
  4. Market making/ Health Stack Evangelisation: Any technology is only as good as its adoption! As some building blocks of the health stack get implemented, we are looking for volunteers who can help evangelise and drive its adoption.

India’s potential in the health sector is tremendous – partly because we have an opportunity to redesign not just the technology foundation (which is a near-greenfield) but also the market structure. With the right team, we hope to orchestrate an orbit shift in the quality and affordability of healthcare across the country.  

To volunteer, please reach out to anukriti@ispirt.in and kamya@ispirt.in 

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Announcement: iSPIRT Foundation & Japan’s IPA to work together on Digital Public Platforms

Information-technology Promotion Agency, Japan (IPA), Japan External Trade Organization (JETRO), and the Indian Software Product Industry Roundtable (iSPIRT) have shared common views that (i) our society will be transformed into a new digital society where due to the rapid and continued development of new digital technologies and digital infrastructure including digital public platforms, real-time and other data would be utilized for the benefit of people’s lives and industrial activities, (ii) there are growing necessities that digital infrastructure, together with social system and industrial platforms should be designed, developed and utilized appropriately for ensuring trust in society and industry along with a variety of engaged stakeholders and (iii) such well-designed digital infrastructure, social system and industrial platforms could have a great potential to play significant roles to improve efficiencies of societal services, facilitate businesses, realize economic development and solve social issues in many countries. 

Today, we affirm our commitment to launching our cooperation and collaboration through the bringing together of different expertise from each institution in the area of digital infrastructure, including mutual information sharing of development of digital infrastructure, in particular, periodic communication and exchange of views to enhance the capability of architecture design and establishment of digital infrastructure. We further affirm that as a first step of our cooperation, we will facilitate a joint study on digital infrastructure, such as (i) the situation of how such digital infrastructures have been established and utilized in India, Japan and/or other countries in Africa or other Asian regions (the Third Countries) as agreed among the parties, (ii) how the architecture was or can be designed for digital infrastructure as a basis for delivering societal services in the Third Countries and (iii) what kind of business collaboration could be realized, to review and analyze the possibility of developing digital infrastructure in the Third Countries through Japan-India cooperation. We may consider arranging a workshop or business matching as a part of the joint study to figure out realistic use cases.

Our cooperation is consistent with the “Japan-India Digital Partnership” launched between the Ministry of Economy Trade and Industry, Government of Japan and the Ministry of Electronics and Information Technology, Government of India in October 2018. We will work closely together and may consider working with other parties to promote and accelerate our cooperation if necessary.

For any clarification, please reach out to sanjay.anandaram@ispirt.in

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A Great Leap Forward to Transform Fintech: Data Empowerment

India is one of the first nations in the world to kick off Open APIs for consented financial data sharing. And nobody’s heard about it! 

Dear Kickass Financial Product Managers and (current & future) Fintech Entrepreneurs,

Amidst the usual flurry of sensational headlines, you may have missed a quiet announcement a few weeks ago that marked a monumental shift: RBI became the first central bank globally to publish a common technology framework – including detailed APIs – for consent driven data sharing across the entire financial sector (banking, insurance, securities, and investment).

This is a gamechanger for the industry.

Out of context, yet another circular with a good deal of jargon is an easy thing to gloss over. But it turns out this effort is actually a global first: although the UK, EU, Bank of International Settlements (BIS), Canada, and others have begun thoughtful public conversations around Open Banking (e.g. through that famous BIS report making the case, initiatives like PSD2, conferences, and various committees), India is one of the first nations in the world to actually make it a market reality by publishing detailed technical API standards — standards that are quickly being adopted by major banks and others across the financial sector in the country without a mandatory requirement from RBI. It’s not just the supposedly cutting edge banks of Switzerland, the UK, or the US driving fintech innovation: the top leadership of our very own SBI, ICICI, IDFC First, Bajaj Finserv, Kotak, Axis, and other household names have recognised that this is the way forward for the industry, and are breaking through new global frontiers by actually operationalising the powerful interoperable technology framework. Not only are they adopting the APIs, some are also starting to think through the new lending and advisory use cases and products made possible by the infrastructure. We think many new fintech startups should also be considering doing the same.

Why do the APIs Matter?

The world is focusing heavily on data protection and privacy – and rightly so. Securing data with appropriate access controls and preventing unauthorised third-party sharing is critical to protecting individual privacy. But to a typical MSME, portability and control of their data is just as critical as data security to empower them with access to a stream of new and tailored financial products and services. For instance, if an MSME owner could share trusted proof of their business’ regular historic GST payments or receivables invoices digitally with ease, a bank could now offer regular small ticket working capital loans based on demonstrated ability to repay (known as Flow-based lending) rather than just loans backed on collateral. Data sharing can become a tool for individual empowerment and prosperity by enabling many such innovative new solutions.

Operationalising a seamless and secure means to share data across different types of financial institutions – banks, NBFCs, mutual funds, insurance companies, or brokers – requires a common technology framework for data sharing. The published APIs create interoperable public infrastructure (a standard ‘rails’) to be used for consented data sharing across all types of financial institutions. This means that once a bank plugs into the network as an information provider, entities with new use cases can plug in as users of that data without individually integrating with each bank. Naturally, the system is designed such that data sharing occurs only with the data owner’s consent — to ensure that data is used primarily to empower the individual or small business. The MeiTY Consent Framework provides a machine-readable standard for obtaining consent to share data. This consent standard is based on an open standard, revocable, granular (referring to a specific set of data), auditable, and secure. Programmable consent of this form is the natural next innovation of the long terms and conditions legalese that apps typically rely on. RBI has also announced a new type of NBFC – the Account Aggregator – to serve as a consent dashboard for users, and seven new AAs already have in principle licenses. 

The Data Empowerment and Protection Architecture (DEPA) – in one image

In many other nations, market players have either not been able to come together to agree on a common technical standard for APIs, or have not been able to kick off its adoption across multiple competing banks at scale and speed. In countries like the US, data sharing was enabled only through proprietary rails – private companies took the initiative to design their own infrastructure for data sharing which end up restricting players like yourselves from innovating to design new products and services which could benefit people on top of the infra. 

What other kinds of innovative products and services could you build? 

Think of the impact that access to the Google Maps APIs allowed: without them, we would never have seen startups like Uber or Airbnb come to life. Building these consented data sharing APIs as a public good allows an explosion of fintech innovation, in areas such as:

  • New types of tailored flow-based lending products that provide regular, sachet sized loans to different target groups based on GST or other invoices (as described above). 
  • New personal financial management apps which could help consumers make decisions on different financial institutions and products (savings, credit, insurance, etc.) based on historic data and future projections. This could also branch out into improved wealth management or Robo advisory. 
  • Applications that allow individuals to share evidence of financial status (for instance, for a credit card or visa application) without sharing a complete detailed bank statement history of every transaction

…and many others, such as that germ of an idea that’s possibly started taking shape in your mind as you were reading.

In summary

This ecosystem is where UPI was in mid-2016: with firm, interdepartmental, and long term regulatory backing, and at the cusp of operationally taking off. UPI taught us that those who make a bet on the future, build and test early (PhonePe and Google were both at the first ever UPI hackathon!), and are agile enough to thrive in an evolving landscape end up reaping significant rewards. And just as with UPI, our financial sector regulators are to be lauded for thinking proactively and years ahead by building the right public infrastructure for data sharing. RBI’s planning for this began back in 2015! They have now passed the innovation baton onto you — and we, for one, have ambitious expectations.

With warmest regards,

iSPIRT Foundation

I’m Pinging A Few Whatsapp Groups Now, What Else Should I Send Them To Read? 

For any further questions or queries, please reach out to kamya@ispirt.in and sid@ispirt.in

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Bharat Calling In Bay Area

In the first week of October, around Dussehra, a bunch of Indians gathered in the Bay Area. The setting had nothing to do with Dussehra, it had more to do with whether they would be spending their next Dussehra while settled in India or in the Bay Area.

iSPIRT conducted two sessions around opportunities emerging in India, spurred by new digital public goods that are going to create a Cambrian explosion of new software products.

The startup activity in India over the past few years has been noted by Silicon Valley and the attendees had a keen interest to discuss what has been happening on the ground.

There were two primary tracks to the discussion:

  • how India has changed in the past decade or so and 
  • what factors have contributed to that radical change

The largely held view of the ecosystem among those gathered was of the 2008 – 2014 period, when the majority of them were last in India, studying or working.

The concerns raised about starting up were around ease of doing business and culture at the workplace but the consensus was that things are improving in these regards.

The keywords that came up to describe the factors causing the change in India were Jio, Modi and so on. However, the fascinating point to learn for all was about the rise of digital public goods and how they are fundamentally changing the market playground in India.

Many had heard of UPI (Unified Payment Interface) and rightfully so, credited Government for it but what awed everybody was how it came about with the effort of a bunch of volunteers believing in the idea of open-source public good and making India a ‘Product Nation’.

Everyone agreed that a new growth journey lies ahead for India, created by factors such as the rise of internet users, internet penetration with Jio, high data consumption and user education that comes along with it. However, it will get catalysed further when coupled with digital public goods.

UPI has been a success story and it crossed more than a billion transactions last month and had overtaken global volume of American Express months back! A number of successful companies like JusPay and PhonePe capitalised on UPI and similar opportunities now lie ahead with :

We dived into specifics of all these to discuss myriad product opportunities that will emerge, enabling new success stories.

This will further be enabled by :

  • Talent that is more agile and honed to operate in an ambiguous startup environment. This has turned around in the past few years, while a lot of talent was tuned to work in a corporate environment earlier.
  • More access to seed capital as more startup operatives have gained wealth and experience in the past few years
  • And parents are more supportive of the idea to join a startup or start one!

Capitalising on all these would need a new entrepreneur archetype that operates from first principles thinking to dig deep in the market and create viable products and business models taking advantage of unique local factors.

Volunteering with iSPIRT can act as a good channel to understand the market better, to get involved with understanding and building digital public goods that are shaping the times ahead in the country.

It’s the forum to engage with peers that help you learn more about yourself, discover your flow that brings joy and contribute towards a public good.

One attendee summed up the takeaway beautifully –

“In the US, I have created a professional career and learnt lessons by building on top of platforms in the West. Now, there are similar opportunities to build on top of platforms and participate in Indian playground. If I get to become an iSPIRT volunteer, I can not only build on top but also help build the very platforms that are driving India forward.

In my own backyard, I have the local know-how to build for India and should act on it, instead of watching Chinese and Western apps put their stake from Kashmir to Kanyakumari.”

To know more about emerging public goods, iSPIRT Foundation and know our volunteering model, check out www.ispirt.in and write to ankit.singh@ispirt.in

We would like to thank Jaspreet from Druva, Anand Subbarayan from Lyft for hosting us, Hemant Mohapatra from Lightspeed Partners for helping with the setup and our local volunteer Pranav Deshpande.

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Indian Software Product Registry – All That Product Companies Need to Know

Earlier this year, National Policy on Software Products was rolled out to create a robust, participatory framework to bring together industry, government and academia on a common platform to make India as a global hub for software products development. This is a much-needed initiative to provide holistic and end-to-end support to the Indian software product ecosystem. The registry is the first step among many towards solving the real problems of the industry and nurturing the software product companies. If done right, this initiative will have immense potential and far-reaching impact to benefit the industry.

Under this policy, one of the key initiatives is the set-up of the Indian Software Product Registry (ISPR) through industry ownership. It is a collaborative platform which will act as national coordination, facilitation and inter-connected centre for all activities related to the Indian software product ecosystem.

The main purpose of this policy is to focus towards the promotion of Indian software products which are defined as under for implementation:

  • Indian Company: As per sub-section 26 of section 2 of the Income Tax Act, 1961, “Indian company” means a company formed and registered under the Companies Act, 1956 or Companies Act, 2013,  provided that the registered office or, as the case may be, principal office of the company, corporation, institution, association or body in all cases is in India.
  • Indian Software Product Company (ISPC):  An ISPC is defined as an Indian company in which 51% or more shareholding is with Indian citizen or person of Indian origin and is engaged in the development, commercialisation, licensing and sale /service of software products and has IP rights over the software product(s).

ISPR aims to create a platform to enable discovery of Indian Software Product Companies and their products while simultaneously giving automatic access to the Government e-Marketplace (GeM) platform. This will enable the government to identify Indian companies as part of their buying process. However, more work on specific allocation of government buying and redeveloping of RFP’s in government for products will also be initiated so that the government can finally buy Indian products.

Secondly, by listing on exchange on ISPR will enable MEITY to get a better understanding of the industry so that specific product-related interventions like recurring payments for SaaS companies, credits for R&D to enable Indian companies to invest in research and development, and facilitation of Indian software product industry for providing fiscal incentives, if any, at a later stage among others will also be achieved.

Thirdly, ISPR will also enable Indian Software Product Companies to list their products here and connect to buyers across the world. Since this is a government-backed platform, it provides a high level of trust and authenticity in the global market. 

Indian Software Product Companies can register here.  For any more queries, please feel to reach out on policyhacks@ispirt.in.

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The Global Stack: A Manifesto

In 1941, soon after he had secured an unprecedented third term as President of the United States, Franklin D. Roosevelt mobilised the US Congress to pass the Lend-Lease Act. Its context and history are storied. British Prime Minister Winston Churchill famously wrote to FDR requesting material assistance from the United States to fight Nazi Germany — “the moment approaches when we shall no longer be able to pay [to fight the war]”. FDR knew he would not get the American public’s approval to send troops to the War (Pearl Harbor was still a few months away). But the importance of securing the world’s shipping lanes, chokepoints, manufacturing hubs and urban megalopolises was not lost on the US President. Thus, the Lend-Lease Act took form, resulting in the supply of “every conceivable” material from the US to Britain and eventually, the Allied Powers: “military hardware, aircraft, ships, tanks, small arms, machine tools, equipment for building roads and airstrips, industrial chemicals, and communications equipment.” US Secretary of War Henry Stimson defended the Act eloquently in Congress. “We are buying…not lending. We are buying our own security while we prepare,” Stimson declared.

The analogy is not perfect, but FDR’s Lend-Lease Act offers important lessons for 21st century India’s digital economy. Our networks are open; our public, electronic platforms are free and accessible to global corporations and start-ups; our digital infrastructure is largely imported; and — pending policy shifts — we believe in the free flow of information across territorial borders. India has made no attempt, and is unlikely in the future, to wall off its internet from the rest of the world, or to develop technical protocols that splinter its cyberspace away from the Domain Names System (DNS). While we have benefited immensely from the open, global internet, what is India doing to secure and nourish far-flung networks and digital platforms? The Land-Lease Act was not just about guns and tanks; a quarter of all American aid under the programme comprised agricultural products and foodstuff, including vitamin supplements for children. The United States knew it needed to help struggling markets in order to build a global supply chain that would serve its own economic and strategic interests. Indeed, this was the very essence of the Marshall Plan that followed a few years later.

In fact, India’s digital success story itself is a creation of global demand. When the Y2K crisis hit American and European shores, Indian companies stepped up to the plate and offered COBOL-correction ‘fixes’ at competitive rates. In the process, Western businesses saved billions of dollars — and Y2K made computing ubiquitous in India, which in turn, added great value to the country’s GDP. 

Therefore, there are both security-related concerns and economic consequences that should prompt India to develop “digital public goods” for economies across Asia, Europe and Africa. Can India help develop an identity stack for Nigeria — a major source of global cyberattacks — that helps Abuja mitigate threats directed at India’s own networks? Can we develop platforms for the financial inclusion of millions of undocumented refugees across South and Southeast Asia, that in turn reduces economic and political stress on India and her neighbours when confronted with major humanitarian crises? Can we build “consent architecture” into technology platforms developed for markets abroad that currently have no data protection laws? Can we nurture the creation of an open, interoperable and multilateral banking platform that replaces the restrictive, post-9/11, capital controls system of today with a more liberal regime — thus spurring financial support for startups across India and Asia? Can India — like Estonia — offer digital citizenship at scale, luring investors and entrepreneurs who want to build for the next billion, but do not have access to Indian infrastructure, markets and data? These are the questions that should animate policy planners and digital evangelists in India. 

The Indian establishment is not unmindful of the possibilities: in 2018, Singapore and India signed a high-level agreement to “internationalise” the India Stack. The agreement has been followed up with the creation of an India-Singapore Joint Working Group on fintech, with a view towards developing API-based platforms for the ASEAN region. As is now widely known, a number of countries spanning regions and continents have also approached India with requests to help build their own digital identity architecture. 

But the time has come to elevate piecemeal or isolated efforts at digital cooperation to a more coordinated, all-of-government approach promoting India’s platform advancements abroad. The final form of such coordination may look like an inter-ministerial working group on digital public goods, or a division in the Ministry of External Affairs devoted exclusively to this mission. Whatever the agency, structure or coalition looks like within government, its working should be underpinned by a political philosophy that appreciates the strategic and economic value accrued to India from setting up a “Global Stack”. In 1951, India was able to successfully tweak the goals of the Colombo Plan — which was floated as a British idea to retain its political supremacy within the Commonwealth — to meet its economic needs. Working together with our South Asian partners and like-minded Western states like Canada, we were able to harvest technology and foreign expertise for a number of sectors including animal husbandry, transportation and health services. India was also able, on account of skilful diplomacy, to work around Cold War-era restrictions on the export of sensitive technologies to gain access to them.

That diplomacy is now the need of the hour. The world today increasingly resembles FDR’s United States, with very little appetite to forge multilateral bonds, liberal institutions, or rules to create effective instruments of global governance. It took tact and a great deal of internal politicking from Roosevelt to pry open the US’ closed fist and extend it to European allies through the Lend-Lease Act. India, similarly, will need to convince its neighbours in South Asia of the need to create platforms at scale that can address socio-economic problems common to the entire region. This cannot be done by a solitary bureaucrat working away from some corner of South Block. New Delhi needs to bring to bear the full weight of its political and diplomatic capital behind a “Global Stack”. It must endeavour to create centripetal digital highways, placing India at the centre not only of wealth creation but also global governance in the 21st century.

The blog post is authored by Arun Mohan Sukumar, PhD Candidate at The Fletcher School at Tufts University, and currently associated with Observer Research Foundation. An edited version of this post appeared as an op-ed in the Hindustan Times on October 21, 2019.

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Some reflections on the fireside chat with Vinod Khosla and Nandan Nilekani

On a cloudy Bangalore evening on August 2nd, the otherwise quiet campus of a medical college in the ‘startup saturated hub of Koramangala’ was bustling with energy. That night the campus was hosting a fireside chat with Vinod Khosla (renowned Venture Capitalist and Co-Founder of Sun Microsystems) and Nandan Nilekani (Co-Founder of Infosys), with Sharad Sharma (Co-founder of iSPIRT) acting as moderator.

Sitting in the midst of many young entrepreneurs, Sharad remarked how energetic Vinod and Nandan are at their respective ages.

Vinod responded “I have this fear that you can grow old when you retire, not retire when you grow old. So, I hope I never retire. As long as you have interesting problems to work on, there’s nothing more exciting to do than work on that.”

Sharad commented that even after all of his accomplishments, it seems that Vinod sees himself as the David in a ‘David vs Goliath’-styled battle and wondered whether that was a fair assumption.

Vinod replied “You want to be the underdog. You want problems to be hard. If they were easy to solve, somebody would have solved them. The problems are very large when you look at them initially. If you apply exponential learning to that, you can catch up with any problem very quickly. If you get on the right path to exponential solutions, they’re not as hard as they seem. Just starting to solve the whole problem in one step is like trying to climb Mount Everest in one step and go straight to the top without going to base camp 1, base camp 2 along the way.”

Turning to Nandan, Sharad asked “I think India does not have a David vs Goliath mindset. Does it?”

Nandan replied “India didn’t get Independence without thinking big. India’s first elections is another example of thinking big. I think it’s all there. Now, we are applying it in new ways. We shouldn’t be daunted by the size of the problem. Whether you’re solving a small problem or a large problem, it requires the same amount of thinking. So, you might as well solve the large problem. There’s much more value for your time and money. Today, you’ve, on one side, an extraordinary array of things that need to be fixed. And, you have an extraordinary array of tools & technology that can fix those problems. You’ve access to enormous amounts of capital & great talent. There’s no better time than this”

Sharad brought the conversation back to Vinod, asking what it takes for entrepreneurs to step up to big problems, to unlearn, to position themselves to be breakthrough entrepreneurs.

Vinod expressed that, in his view, “most people, most of the time, are limited by what they think they can do, not what they can actually do. Most people limit themselves. It’s a surprising thing to say, but I almost always find it to be true.”

He elaborated that entrepreneurs must have the courage to take one little step at a time on this exponential climb. They do not have to figure out the whole journey in order to start the journey. They will determine the right paths to follow along the way. They just have to be creative in figuring them out.

He mentioned that he doesn’t mind failing and that his “willingness to fail gives [him] the ability to succeed. Most people fail to try, instead of trying and failing.”

He went on to share an observation with the audience. He said “I look back 40 years and I can’t find one major innovation that came from a large company. Not one. General Motors and Volkswagen couldn’t design an electric car. Boeing & Airbus couldn’t do space as SpaceX could. None of the media companies did media as Twitter and Facebook did. None of the Pharma companies did Biotechnology as Genentech did.”

It’s important to note that he mentions ‘large innovation’ and not ‘incremental innovation’. Also, he refers to innovations that turned out to be large in their impact on markets that they were meant for.

While there are many examples to support this claim, let’s take examples from the period of the early days of Sun Microsystems, about four decades ago.

Xerox’s PARC lab had a treasure trove of innovation that would have never seen the light of day, had it not been for Apple.

IBM at their research lab in mid-1970s, pulled together some of the smartest people in the field to create a functioning relational database system based on Ted Codd’s theory (Codd was an English computer scientist who, while working for IBM, invented the relational model for database management, which served as the theoretical basis for relational database management systems).

They succeeded and developed a functional language called SEQUEL (Structured English Query Language), later changed to SQL. In any sense imaginable, it was a breakthrough, but it wouldn’t have revolutionized the software industry had it not been for Larry Ellison’s Oracle.

Vinod mentioned that “when the path is not clear and you are inventing something new, almost certainly it would be a startup, despite how hard it may sound!”

He mentioned that when people in the energy sector looked to GE and Siemens to innovate, they didn’t.

In the current market dynamics with large tech monopolies, we see, at times, that an incumbent does well at copying what a startup does, but they rarely outdo the hunger and agility of a fast-growing startup. Google had trouble with the social network, and there are numerous examples to this effect. However, given the large distribution that few of the monopolies have with nearly zero marginal cost to acquire new customers, even if the product is not the best to be found in the market, some other inherent advantages can make a me-too product of a large incumbent thrive. For example, Microsoft, despite Slack’s rise and successful IPO, is doing well with Teams because it is leveraging its corporate-ubiquitous Office 365 suite. (Ending Q2 2019, Teams had 13 million DAUs as compared to Slack’s 10 million DAUs.)

These occurrences should in no way deter the entrepreneur, but he or she does need to immerse him or herself in systems thinking and order effects of multiple degrees when looking at how dynamics in the market that he or she is trying to disrupt, will evolve.

Following up on this point, Sharad pointed out that usually there is something working in the background enabling the entrepreneurs to carry out the change. The wind in their sails such as a technological shift, market change, and public goods.

He cited examples of GPS, India Stack and Solaris, (a UNIX operating system developed by Sun Microsystems) which came about as a result of AT&T and Bell Labs opening up UNIX standard to the world.

Nandan agreed and said “So far entrepreneurs’ successes have been built on huge investments in public infrastructure by governments like the Internet, GPS etc. We need to invest in long term digital infrastructure. Only governments can afford it or have that vision. Then open it for private innovation.”

He further mentioned that “It’s a philosophy that we have adopted in India. Just as the US invested in the internet, GPS etc, we will invest in identity, payment infra, etc. and API-fy them, thus allowing innovation to happen on top of that.”

Vinod chimed in saying that “almost all entrepreneurs build on things that are already there. In fact, how much you orient that infra towards entrepreneurial ventures makes a huge difference. There are lots of startups in the US-based on government funding in science and technology in US universities.”

Nandan added that the advantage that we have now, is that the technology has been democratized. “We have all kinds of open source stuff. We have a cloud. It’s all there and it’s all free. And it’s for entrepreneurs to take that and mix & match. That’s where we can do a lot of work.”

Sharad summarized this exchange aptly by saying that “solving hard societal problems needs ‘jugalbandi’ between public infrastructure and private innovation on top of it.”

Taking an another IBM example of how this ‘jugalbandi’ manifests, while IBM was working on SEQUEL, a group of professors at the University of California, Berkeley, were also working on a relational database as part of a project called ‘Project Ingres’, funded by the US Government. Oracle used both as a foundation to spear through the market.

It was ultimately the speed of execution that saw Oracle making headway, utilizing the nudge given to it (IBM introduced a commercial product in February 1982, despite having a relational database up and running in 1977. They also were invested in hierarchical database system called IMS and were not fast enough to cannibalize their product)

In India, if the BHIM app was a B2C reference implementation of UPI, PhonePe utilized the opportunity to build a massive business on top of the same UPI stack.

Shifting gears, Sharad recalled his interaction with Jeff Bezos where he said Jeff takes just 10 minutes to determine whether a new hire is a good fit or not and one of the key things he looks for while assessing, is resilience. Entrepreneurs need loads of it as a ‘David’

Sharad asks Vinod about what he looks for in an entrepreneur when he is deciding whether to fund a start-up.

Khosla said “There’s no one formula. As a tech investor, you’re looking for a unique solution where one can create an advantage over time. It’s as simple as that. The biggest ingredient is the quality of the team you assemble. If it’s a great team, we will fund it, whether it has an interesting business plan or not. Team matters the most. And then how clever you are, how differentiated your technology is, how far ahead are you of others in thinking through how you want to build it.

“An important characteristic when evaluating somebody who has failed is what’s their rate of learning. That’s probably the most important way you evaluate an entrepreneur. When they move from job to job, do their teams follow? What books do they read? Do they spend their time learning new things? There are half a dozen things like that, that I personally use in evaluating people. But it’s still the hardest thing you do.”

He further added that he also has a strong belief that people with expertise in the area apply old rules and old biases while noting that experience is one of the largest biases there is!

Taking his Fintech investments as examples, he explains how the founders of Square, Stripe and Affirm never had worked in Fintech. Not knowing the space proved to be a massive advantage, and the entrepreneurs tried to solve problems with great empathy towards the customer, iterating while operating with first principles thinking.

He added by giving the example of Elon Musk’s never having worked in the auto industry prior to founding Tesla. Automakers laughed at the Silicon Valley startup with no experience in auto-making. He made lots of mistakes but fixed them quickly while figuring out a better way to proceed than those decided through conventional wisdom.

For those looking to innovate in their existing field of expertise, Sharad echoed that unlearning is more important than learning.

Sharad posed a nuanced question for Vinod by asking whether a healthcare start-up hiring a VP of Sales should hire one from the healthcare sector or not. Sticking to his view, Vinod remarked that he would rather hire an athlete who would be innovative and learn quickly instead of someone with bias from experience!

Talking about the quantum of funding and the excess in Silicon Valley, Vinod said, “nobody can say what’s the right level of money. It feels like a lot of money is floating around in Silicon Valley. But that’s because there’s been a lot of really good ideas. When new platforms emerge, new applications become possible. Then great entrepreneurs build them.”

He continued, “if you look at your mobile phone, and the touch interface, there really hasn’t been a huge startup in the US in the last five years. If you look at Uber, Lyft, Airbnb, Pinterest, they are all done. We have to see where are new platforms coming along.”

When prodded on what these new platforms can be, he elaborated “I do think AI is a new platform and offers lots and lots of opportunity. Fortunately, other than ads, it offers opportunity in lots of societal impactful areas. Medicine is my favourite. 3D printing is another new platform that people aren’t using enough. One of my favourite startups right now is trying to 3D print whole houses. What’s the advantage of that? Much, much lower cost, 24 hours to print a house, but more importantly, it’s environmental footprint is much better.”

He also wanted to highlight for entrepreneurs that large problems to be solved are not confined to the domain of software, but are present in many other fields as well, such as food, construction, healthcare, transportation, etc., which are all open to radical innovation.

He said that when one merges biotechnology solutions, such as CRISPR, with AI, all kinds of disease solutions are possible. He also believes that startups will dominate drug discovery using AI, far more than the big pharmaceutical companies will.

He brought up the example of Impossible Foods and recalls everyone asking him why he was investing in a hamburger company.

Giving the rationale behind the investment, he said that “about 30% to 40% of the planet’s land surface area is used for animal husbandry of one sort or another. I think about 90% of it could be freed up if the same meat was produced using the techniques like Impossible Burger. Plant proteins are the best way to save the planet. It’s healthier than meat proteins for humans because they come with cholesterol and other negative things. So it’s a beautiful solution.”

Talking more about the funding and its quantum, he argued that “the more money you raise initially, the less likely you are to succeed. There’s some beauty & elegance in very small amounts of money because it forces you to think about your problem much harder…you’re much more creative with your solution.”

While speaking about the need for creativity, Sharad mentioned that when entrepreneurs hit an obstacle during the process, they need to re-imagine and rejig, however, there are certain components that ought not to be rejigged, such as the core set of company values.

He gave examples of Infosys and Wipro being built on that value-based culture while noting that Bangalore’s vibrant ecosystem today is definitely a beneficiary of that culture.

Nandan agreed and said “values are very important if we want to build companies to last. If we want to build companies that sustain themselves over decades and really have an impact on society and the world, they have to be anchored in a core set of values.”

Vinod concurred, reflecting that “if you don’t have values, the first time you run into a problem, people scatter. If you have values & you have a mission, people stick together & double their efforts as a team. Values play a big role during bad times”

Following this topic, the chat naturally steered towards how entrepreneurs evaluate risk and what can be the right framework for evaluation and mitigation.

Vinod said that there is no one set of rules and that everyone has their own way of looking at it.

He added, “most investors reduce risk to the point where the probability of success is high, but its consequences of success are inconsequential. It’s a good way to get a predictable rate of return. I personally find it much more exciting, where the probability of success is low, but consequences of success are consequential.”

He gives the example of Larry and Sergey, founders of Google, saying that they had no interest in making a billion dollars when Yahoo offered to acquire them. They wanted to be consequential and change the world.

While this statement is accurate, it is important for us to study the different risk scenarios that entrepreneurs face, as well as how they frame and mitigate them. The reason is that while the Google founders rejected a billion-dollar offer, they also badly wanted to sell ‘PageRank’ to AltaVista and Yahoo for 1 Million Dollars to go back and resume their studies at Stanford (from The Google Story by David A.Vise).

So then, the question that arises is that how do the founders have different outlook towards acquisition at different points in time? What changes in-between, what transitions entrepreneurs go through, and what indicators should they rely on? One can dive into ‘Prospect theory’ and other frameworks for decision analysis under risk, but we also need to consider the passion and hunger of entrepreneurs, the unquenchable fire that powers them through the risk. That will have to be another iSPIRT blog altogether!

Speaking about the risk entrepreneurs face, Nandan added “You need a social fabric which delinks failure from the person; which recognizes that failure is a tremendous experience which is likely to increase the probability of success the next time around. Here failure, person & institutions are entwined.”

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Talking about AI, Vinod said “There will be enough jobs for humans after ‘Artificial General Intelligence. We don’t have enough humans for all the elder care we need and all the childcare. We could deploy ten times as many people and raise better children and look after elders much better. Those are just two examples. I think relationships are the inherent human tendency that will not go away and meaning will come from relationships.”

Nandan added that “the assumption that AI will automate everything and there will be no jobs left and therefore we need UBI and a way to keep them occupied is wrong. The way I think about it, AI amplifies human capability. The combination of human and AI is going to be very strong.”

As the chat drew to a close, it became more apparent than ever that for the Indian ecosystem to thrive and for us to build massive companies, we need a new entrepreneur archetype – the kind that can zoom out and look at macro-trends, applies ‘systems and first principles’ thinking, platform over product thinking, have big audacious goals while being extremely empathetic to their customers.

There used to be a long gestation period from the founding of a company until it faced foreign competition on Indian soil. From early days of MakeMyTrip, Naukri to Ola, Quikr a few years back, it has reduced drastically such that companies like PhonePe have to ward off heavyweights like Facebook, Google and Amazon within a year of starting up! Indian entrepreneurs will need to buckle up as the platform wars on Indian Playground with digital public goods will only intensify, unleashing massive opportunities and growth for the country.

Please write into ankit.singh@ispirt.in for a deep dive and information on upcoming iSPIRT events where we will discuss this new entrepreneur archetype as part of what we call ‘Athletic Gavaskar Project’, and to learn more about our volunteer model.

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Fireside Chat: Vinod Khosla and Nandan Nilekani in Conversation with Sharad Sharma

Join us for a conversation with Vinod Khosla and Nandan Nilekani. Together with Sharad Sharma, our fireside chat host, they will talk about what it means to be an entrepreneur in India today and how these entrepreneurs can solve the hardest problems of India.

Vinod Khosla and Nandan Nilekani are arguably two of the most influential thinkers and innovators of our time when it comes to transformation, entrepreneurship, and large scale impact. Born within 6 months of each other, both graduated for IITs, created iconic companies, become billionaires in the in aprocess and continue to innovate and transform the world.

What better opportunity than to hear these icons of industry at a fireside chat discussing the most intriguing aspects of startups, entrepreneurship, digital transformation and India’s growth towards a multi trillion dollar economy.

About Mr. Vinod Khosla

Vinod Khosla is the founder of Khosla Ventures, a premier Silicon Valley venture capital firm, and a member of the 2018 Midas List. His firm, Khosla Ventures, invests in a wide variety of startups ranging from Healthcare, Sustainable Energy, Food/Agriculture to Space, AI and Robotics. He co-founded Sun Microsystems in 1982 after which he spent 18 years at venture capital firm Kleiner Perkins Caufield & Byers before launching his own fund.

About Mr. Nandan Nilekani

Nandan Nilekani is the co-founder of tech giant Infosys and currently back as a non-executive chairman affecting a remarkable turnaround. In 2009, he was made a Cabinet Minister and Chairman of UIDAI – India’s mammoth National ID project – Aadhaar.  After Aadhaar, Nandan has actively supported India’s digital transformation through the IndiaStack initiatives in payments, digital locker, eSignature and other services. Nandan has also backed startups in the India ecosystem.

About Mr. Sharad Sharma

Sharad Sharma is the co-founder of iSPIRT and has worn many hats as CEO of Yahoo India R&D, Chair of NASSCOM Product Forum and as intrapreneur at AT&T. He is a passionate evangelist and an active investor in the software product ecosystem in India.

When?

2nd of August, 2019 from 18:00 – 19:30 hrs.
Venue to be disclosed. 

How to participate?

You can be a part of this Fireside Chat by registering here. Confirmed participants will be intimated by the 28th of July via email. 

Please note, due to limited seating at the venue we will not be able to accommodate everyone who applies.

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Data Empowerment and Protection Architecture Explained – Video

More commonly known as the ‘Consent Layer of the India Stack’, Data Empowerment and Protection Architecture (DEPA) is a new approach, a paradigm shift in personal data management and processing that transforms the currently prevalent organization-centric system to a human-centric system. By giving people the power to decide how their data can be used, DEPA enables the collection and use of personal data in ways that empower people to access better financial, healthcare, and other socio-economically important services in a safe, secure, and privacy-preserving manner.

It gives every Indian control over their data, democratizes access and enables the portability of trusted data between service providers. This architecture will help Indians in accessing better financial services, healthcare services, and other socio-economically important services.The rollout of DEPA for financial data and telecom data is already taking place through Account Aggregators that are licensed by RBI. It covers all asset data, liabilities data, and telecom data.

We, at iSPIRT, organised a learning session on the 18th of May, to give relevant and interested stakeholders a detailed primer on DEPA. We had 60-odd very animated and engaging people in the audience. The purpose of the session was to understand the technological, institutional, market and regulatory architecture of DEPA, it impacts on existing data consuming businesses and how people could contribute to this new data sharing infrastructure that’s being built in India.

The session was anchored by Siddarth Shetty, Data Empowerment And Protection Architecture Lead & Fellow, iSPIRT Foundation (Email – sid@ispirt.in). Please feel free to reach out to him for any queries regarding DEPA.

For other queries, please write to community@ispirt.in.

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#6 Healthstack session at LetsIgnite

We had the chance to conduct a discussion on the National Health Stack during the LetsIgnite event organized by the LetsVenture team on 15th June at the Leela Palace. The audience comprised of early stage healthcare startups along with angel investors and venture capitalists having keen interest in healthcare investments. Some notable attendees included Dr. Ramesh (senior cardiologist, MD Endiya Partners) and Mr. Mohan Kumar (Partners, Norwest Venture Partners).

Sharad Sharma (co-founder, iSPIRT), Dr. Santanu Chatterjee (Founder, Nationwide Primary Care), Dr. Ajay Bakshi (Founder Buddhimed Technologies, ex-India CEO Parkway Pantai) and Arun Prabhu (Partner, Cyril Amarchand Mangaldas) had been invited to lead the session, which was moderated by Anukriti Chaudhari and Priya Karnik, both core volunteers at iSPIRT championing the health stack initiative.

The context was set by an interactive talk by Sharad who began by giving a glimpse of the underlying philosophy of the iSPIRT Foundation – the idea of building public goods as digital technology stacks which can be leveraged by private players to serve Bharat. . Sharad described societal change in India being a Jugalbandi between digital public infrastructure, market participants and policy makers to achieve the same. He mentioned how the India Stack was changing the face of fintech in India and that the Health Stack could do the same for healthcare. The audience was more than startled to hear that a day prior to the session, the number of UPI transaction in India were already one-sixth of what MasterCard had done worldwide. ( UPI has only been around for 33 months! ). Sharad then went on to explain the different layers of the Health Stack comprising National Registries, standardised health information flows, an insurance claims management software built upon a standard Policy Markup Language and a gamifier policy engine. He didn’t miss reminding the audience that the Health Stack was being built to solve for the healthcare needs of ‘Bharat’and not the privileged 30 million Indian families already being well-served by the healthcare conglomerates in urban areas.

With the context in place, Anukriti took over to give a background of the healthcare landscape in India. India struggles with a 1:1600 doctor to patient ratio with more than 60% of doctors and hospitals concentrated in urban regions. To add to that, the public expenditure for healthcare is just 3.9% of our annual GDP (compared to 18% in the US) and it’s not surprising that most deaths in public healthcare facilities happen because of poor quality of care. Health insurance penetration barely touches 20% with OOP expenditure dominating the healthcare spending in India. With a huge underserved population, the need of the hour is to leap-frog to scalable solutions that can reach the masses instead of incremental linear growth solutions to address the Indian healthcare challenges. The different layers of Health Stack make it much easier for innovators (both public and private) to develop radical solutions.. While funding in healthcare startups has increased over the last 5 years, it still significantly lags behind areas like fintech, e-commerce, ed-tech, etc. Moreover, the bulk of healthtech investments have been focused on the consumer tech sector. Anukriti ended her views with a futuristic optimism regarding the innovations that Health Stack could open, to make healthcare truly affordable, accessible and high quality.

We were fortunate to have Dr. Santanu and Dr. Bakshi give insights about the Health Stack with their on-ground experiences in healthcare spanning over decades. Dr. Santanu mentioned that for primary care, the national registry of care providers was very fundamental to ascertain ‘which stakeholder provides what’ given that almost every provider is somewhere involved in primary care. On top of that, he stressed about the need for Artificial Intelligence backed clinical support systems that seamlessly integrate with the doctor’s workflow. This is of particular relevance for rural healthcare settings wherein, despite various efforts, there aren’t enough doctors to setup shops in villages . A standardized health information layer, along with data transfer mechanisms, could be the driving force for this. He was, however, wary of how well standard insurance schemes would work for primary care as the insurance business model falls apart given that almost everyone needs access to primary care at some point or the other. Priya resonated with his views and further suggested that for ‘Bharat’, micro insurance policies could be the key mechanism to drive insurance adoption at the consumer level. Such a system could potentially be facilitated by a claims engine platform build upon a standard policy markup language to ‘almost-automate’ (auto-adjudicate) the claims addressal process.

Dr. Bakshi contended that for a stable society, healthcare and education are a must, as the former secures our ‘today’ while the latter secures our ‘tomorrow’. Having worked as the CEO of three major hospital chains in India, he accepted (without an iota of political correctness) that as a nation, we have failed miserably in providing either. Healthcare is a social good and nowhere in the world has it been solved by private players alone (given the way private incentives are aligned). The public sector in India hasn’t stepped up which is the reason that private players dominate the quality healthcare delivery which could lead us (or is perhaps already leading) to following the footsteps of the US. This is an alarming trend because in the short and medium term, India cannot afford to outsource the entire healthcare delivery to private players. Dr. Bakshi remarked that to set things on the correct track, the Health Stack is a very important initiative and congratulated the iSPIRT team for working ardently to make it happen. He however suggested all stakeholders to be privy of the fact that while fintech transactions are linear (involving the payer and the recipient), a healthcare ‘transaction’ involves multiple aspects like the doctor’s opinion, investigation, drugs, nurses, ward boys and many other layers. This underlying multidimensionality would make it difficult to replicate an India Stack kind of model for the healthcare setting. At the core of the healthcare transaction lies the ‘doctor-patient’ interaction and it is imperative to come but with some common accepted standards to translate the healthcare lingo into ‘ones and zeroes’. He lauded the health information flows  of the Health Stack for being a step in the right direction and mentioned that in his individual capacity, he is also trying to solve for the same via his newly launched startup Buddhimed Technologies.

With two stalwarts of healthcare sitting beside her, Anukriti grabbed the opportunity to put forth the controversial concept of ‘doctors being averse to technology’ which could possibly be a hindrance for Health Stack to take off. Dr. Santanu and Dr. Bakshi were quick to correct her with the simple example of doctors using highly technical machines in providing treatments. They coherently stated that doctors hated Information Technology as it was forced upon them and suggested that IT professionals could do a better job by understanding the workflows and practical issues of doctors and then develop technologies accordingly. This is an important takeaway – as various technologies are conceptualized and built, doctors should be made active participants in the co-creation process.

The idea of a common public infrastructure for healthcare definitely caught the attention of both investors and startup founders. But amidst the euphoria emerged expected murmurs over privacy issues. That was when Arun Prabhu, the lawyer-in-chief for the session, took the lead. He reiterated Dr. Bakshi’s point of the doctor-patient relationship being at the core of the healthcare transactions. Such a relationship is built upon an element of trust, with personal health data being a very sensitive information for an individual. Thus, whatever framework is built for collating and sharing health information, it needs to be breach proof. Arun cited the Justice Srikrishna report to invoke the idea of consent and fiduciaries – a system wherein individuals exercise their right to autonomy with respect to their personal data not by means of ownership (which in itself is an ambiguous term), nor by regimes of negligence or liability but by the concept of a coherent consent mechanism spread across different stakeholders of the healthcare value chain. Moreover, the consent system should be straight-forward and not expressed via lengthy fifty page documents which would make it meaningless, especially for the India 2 and India 3 population. Lastly, he mentioned that just like physical and tangible assets have certain boundaries, even data privacy can have certain realistic limitations. If an information point cannot be specifically identified or associated with a particular individual but can have various societal benefits, it should be made accessible to relevant and responsible stakeholders. Thus, while it is imperative to protect individual health data privacy, there should be a mechanism to access aggregated anonymized health data. There is tremendous value in aggregating large volumes of such data which can be used for purposes like regional analysis of disease outbreaks, development of artificial intelligence based algorithms or for clinical research. Priya added that such a system was inherent in the Health Stack via the Population Health Analytics Engine and the framework for democratisation of aggregate data.

Overall, the session amalgamated various schools of thought by bringing together practitioners, CEOs, CIOs, lawyers, startups and investors on one common discussion platform. This was perhaps an example of the much-needed Jugalbandi that Sharad had mentioned about. A public good is conceptually ‘by the stakeholders, for the stakeholders and of the stakeholders’. This necessitates its active co-creation instead of isolated development. Needless to say, multi-way dialogue is the DNA of such a process. Staying true to that philosophy, we look forward to conducting many such interactive sessions in the future.

Ravish Ratnam is part of the LetsVenture Team – a platform for angel investing and startup fundraising.

He can be reached on ravishratnam14@gmail.com