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iSPIRT Open House Discussion on National Health Stack [Virtual]

The National Health Stack is a set of foundational building blocks that will be built as shared digital infrastructure, usable by both public sector and private sector players. 

Healthcare delivery in India faces multiple challenges today. The doctor-patient ratio in the country is extremely poor, a problem that is exacerbated by the uneven distribution of doctors in certain states and districts. Insurance penetration in India remains low, leading to out-of-pocket expenses of over 80% (something that is being addressed by the Ayushman Bharat program). Additionally, the current view on healthcare amongst citizens as well as policymakers is largely around curative care.

Preventive care, which is equally important for the health of individuals, is generally overlooked. The leapfrog we envision is that of public, precision healthcare. This means that not only would every citizen have access to affordable healthcare, but the care delivered would be holistic (as opposed to symptomatic) and preventive (and not just curative) in nature. This will require a complete redesign of operations, regulations, and incentives – a transformation that, we believe, can be enabled by the Health Stack.

iSPIRT Foundation in partnership with Swasth Alliance is hosting an Open House Discussion on the following building blocks of the Health Stack

  • Doctor Registry
    • The ability for doctors to digitally authenticate themselves and share their electronic credentials with a third-party application such as a telehealth provider
  • Personal Health Record (PHR) System
    • The ability for every Indian to be empowered with control over their health data such that they can share it with trustworthy clinical providers to access a digital service
  • Open Health Services Network 
    • A unified health services network that comprises of a common set of protocols and APIs to allow health services to be delivered seamlessly across any set of health applications, doctors, and providers. 

The virtual session will be from 11:30 AM to 1:00 PM on Saturday 23rd May.

To confirm your participation and receive the virtual link, please click here.

Recommended Reading 

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iSPIRT’s responses to The Ken’s questions over the last few days.

In the interest of transparency, here is our entire exchange with The Ken.

Our first email response to The Ken

Dear Sanjay and Siddharth, 

Hope you are safe and doing well. 

I’m a reporter with The Ken and I’m working on a story looking at the now pulled-back launch of Sahay on May 21 by PM Modi and the involvement of iSpirt in this project. I had some questions about the iSpirt’s roles and responsibilities with respect to Sahay and the account aggregator framework. And also examine the potential conflicts of interest it opens up. Could you help with responses by Thursday end of the day please, as this is a newsbreak.  

  1. When did iSpirt feel the need to roll out an app like Sahay, was it always part of the account-aggregator roadmap? What have been the roles and responsibilities of iSpirt to get this off the ground?
  2. Who is responsible for owning and operating Sahay when it was scheduled for launch?
  3. We understand iSpirt is conceptualizing and designing the APIs and SDKs for this. Can you confirm?
  4. Why was Juspay given the mandate to make the proof of concept this time around too given that the AA framework is something that has been in the works for over 3 years. Why not let the market players come up with such an app?
  5. With Sahay, IDFC Bank, Axis Bank, Bajaj Finserv are among the first banks to take part, but these banks are also a financial donor to iSpirt. This raises questions on what basis banks can become part of the network. Could you explain the connection here?
  6. We learnt that Setu, which is run by former iSpirt volunteers has applied for an account aggregator license. Given iSpirt’s active involvement in this project, it opens up possibilities for conflicts of interest in terms of preferential treatment when it comes to choosing an iSpirt backed AA when you evangelise the concept. Please comment on that?
  7. Setu is funded by Sanjay Jain-founded Bharat Innovation Fund (BIF). By virtue of being an iSpirt member, Jain’s visibility and roadmap of iSpirt’s projects allow funds like the BIF to back the right horses. This again brings up questions of conflict of interest. Can you comment on this, please? 


Thanks in advance. 

Dear Arundhati,

Thank you for reaching out to us. 

To help you understand iSpirt’s roles and responsibilities with respect to Sahay and the account aggregator framework and to equip you to examine potential conflicts of interest you think it opens up, let me first explain the iSPIRT model as described here: iSPIRT Playgrounds coda. This document sets context for our answers, and many of your questions can be answered by referencing this code. It lays out in detail iSPIRT’s design for working on hard societal problems of India and how we engage with the market and the government actors in that journey.

Now to answer your questions:

1.     When did iSpirt feel the need to roll out an app like Sahay, was it always part of the account-aggregator roadmap? What have been the roles and responsibilities of iSpirt to get this off the ground?.

The idea behind Project Sahay is nearly as old as iSPIRT itself. This is one of our earliest depictions of the idea of a credit marketplace from 2015 on the left. Over time this idea was more popularly encapsulated in the “Rajni” use case depicted on the right.  Despite our evangelism, in the 6 years since this slide was made, no market player has built something like Sahay (Referring to your Q4 here).

When the economic slowdown hit in August of last year, our conviction was that the need for cash flow lending was urgent. Since a credit marketplace needs many moving parts to work well, it would require many market and government participants to accelerate their plans as well. The UK Sinha Committee on MSMEs had done the important groundwork of laying out the basic architecture of what needed to be done. 

Technical documents like API specs do not capture people’s imaginations. In our experience, the simplest and quickest way to unlock the imaginations of market participants and current and potential future entrepreneurs is to build an operational implementation and highlight its capabilities.

We have encouraged building of operational implementations in the past as well. Sometimes we build it with our partners (e.g. Credit Marketplaces), sometimes market participants do (as showcased on 25th July 2019 for Account Aggregators by Sahamati), sometimes government partners do (as NPCI did with UPI).

To this end we chose the temporary working title for an ongoing initiative “Sahay” and gave it a realistic but ambitious deadline of May 21st. The outcome of Project Sahay, was not one app, as you have assumed, but to catalyse several credit marketplaces to come up to help MSMEs access formal credit. We do not see this reflecting in any of your questions. 

Many players who did not opt in to be market partners with iSPIRT (reference 4.b “On market partners”) would opt in once they see the Wave 1 markeplace implementations in operation. We call this Wave 2, and have a model to support them as well.

2. Who is responsible for owning and operating Sahay when it was scheduled for launch?

At iSPIRT, we try to imagine a future and work backwards from there. Project Sahay helped develop early adopters of an ecosystem to come together in a coordinated way.

For cash flow lending, we needed many marketplace implementations. Each marketplace needs multiple lenders to encourage competition and not give any one player a significant head start. Unlike, say BHIM (the reference app for UPI) this marketplace needs much more groundwork and plumbing to come together in time. We used Project Sahay as a forcing function towards this aim.

Project Sahay was about many marketplace implementations. One of them would have been adopted by government partners like NPCI or PSB59. However, the marketplace implementations are still under development. So this question is premature.

Post COVID19, our view is that Cash Flow based lending as an idea itself may get pushed out by a quarter or two in the market, so our efforts on Project Sahay, will also get pushed out. We recently posted a blog (COVID19 strikes cash flow lending for small businesses in the country) about this.

3.     We understand iSpirt is conceptualizing and designing the APIs and SDKs for this. Can you confirm?

In regards to the Account Aggregator component of Project Sahay, the specifications for Financial Information Providers, Financial Information Users, and Accounts Aggregators have been designed & published by ReBIT and are publicly available here: https://api.rebit.org.in/ It was notified by RBI on November 8th 2019: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11729&Mode=0

In regards to the design of the APIs & SDKs for the credit marketplace component of Project Sahay, please refer to our iSPIRT Playgrounds Code (Reference 4b. “Market Partners”). 

4.     Why was Juspay given the mandate to make the proof of concept this time around too given that the AA framework is something that has been in the works for over 3 years. Why not let the market players come up with such an app?

Refer Q1, no market player had built this in 6 years.

JusPay is an active market participant in this ecosystem. They volunteered to build an open-source implementation so that many marketplaces can come up quickly. We saw no conflict, in fact we appreciate this gesture on their part to open-source.

We see the framing here includes “this time around too”. If by this you mean BHIM for UPI, that was entirely a NPCI decision. We do not advise on procurement. (reference 4.c “On government partners”)

The AA framework and thinking has been around for 3 years. Sahamati (https://sahamati.org.in/) is a collective for the AA ecosystem. All  the required resources to guide new AAs to develop are available at Sahamati website.

5.     With Sahay, IDFC Bank, Axis Bank, Bajaj Finserv are among the first banks to take part, but these banks are also a financial donor to iSpirt. This raises questions on what basis banks can become part of the network. Could you explain the connection here?

We want to answer your question at two levels. First, your question implies pay-for-play. We want to categorically deny this. Please understand our donor model first. (reference 5. “How does iSPIRT make money”)

Any allegation of pay-for-play is baseless. We engage with many more market partners who are NOT donors than donors who are market players. Their donor relationship and “market partner” relationship with us are independent.

Second, in case your question here is procedural on “how can banks become part of this network”, as defined in RBI’s Master Directive of Account Aggregator: 

  • Clause 3 (1) xi – any bank, banking company, non-banking financial company, asset management company, depository, depository participant, insurance company, insurance repository, pension fund and such other entity as may be identified by the RBI for the purposes of these directions may become a Financial Information Provider (FIP). 
  • Clause 3 (1) xii – Any entity that’s registered with and regulated by any financial sector regulator can become a Financial Information User.
    • Clause 3 (1) x – “Financial Sector regulator” refers to the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and Pension Fund Regulatory and Development Authority

Here’s a link to the FAQ on Sahamati website for you https://sahamati.org.in/faq/ that explains this deeper.

On July 25th last year,  Sahamati was launched with 5 early adopter banks who had conducted proof of concept of the Account Aggregator network. Please see here for media coverage.

6.     We learnt that Setu, which is run by former iSpirt volunteers has applied for an account aggregator license. Given iSpirt’s active involvement in this project, it opens up possibilities for conflicts of interest in terms of preferential treatment when it comes to choosing an iSpirt backed AA when you evangelise the concept. Please comment on that?

We object to use of the term “iSPIRT backed” in relation to Setu. We ‘back’ every startup that seeks to build for India. iSPIRT has no financial interests in any of these companies. Setu does not enjoy any special status.

A note on your reporting: I recommend revisiting your phrasing here and ensure you substantiate the claims you make. Our volunteers are employees of many startups and large institutions in the country. We knew this reality and designed governance structures accordingly

Please refer to our model and feel free to report on when we have departed from our stated model. Please avoid sensationalising our regular course of work, by cherry-picking two volunteers and attempting only a tenuous link.

iSPIRT enjoys the confidence of many of its market partners and government partners only because we take a ‘non interested party’ stance to all our work. We are committed to staying this way. It is an existential threat if we do not live up to this principle. So we take these allegations extremely seriously.

Therefore, if you’re going to imply we gave any preferential treatment, I hope you and your editors realise you carry the burden of proof on this allegation. We also believe that sunlight is the best disinfectant. Hence, we do not want to stop you from doing your job, we welcome the criticism. However, in exchange, we request you meet the highest standards and have credible evidence on any allegations or even insinuations you make about us.

7.     Setu is funded by Sanjay Jain-founded Bharat Innovation Fund (BIF). By virtue of being an iSpirt member, Jain’s visibility and roadmap of iSpirt’s projects allow funds like the BIF to back the right horses. This again brings up questions of conflict of interest. Can you comment on this, please? 

We have described our conflict of interest model in the iSPIRT playgrounds code (Reference 6. “How does iSPIRT protect against conflict of interest”?)

To back the right horses, VCs are meant to be on top of trends. Sanjay Jain is not on top of trends because he was a volunteer at iSPIRT Foundation. iSPIRT is on top of trends because Sanjay Jain is a volunteer. We would ask you to look at his history of work, his thoughtful and original comments on many forums (which often diverge from the iSPIRT view, specially in the last 3 years since he has transitioned into becoming a full-time VC)

Think Tanks like us put out bold visions for the country, and Sanjay Jain is not the only VC who keeps an eye on our activity. We often even invite VCs for sessions and encourage them to back all players without recommending any specific one. Most often the locus of this engagement is the public sessions we hold. Some examples:

  • 2015: Whatsapp moment of India. Nandan Nilekani presentation on the future of finance and many articles written about it
  • Startup India Launch – Jan 2016 13th. India Stack unveiled as part of official program of Digital India (Public event)
  • Cash Flow Lending – DEPA launch 2017 August – Nandan Nilekani and Siddharth Shetty Presentation at Carnegie India event
  • Public Presentations by Pramod Varma, Sharad Sharma, Nikhil Kumar on India Stack
  • Siddharth Shetty explaining AA at an event at @WeWork Bangalore
  • 2019 Sahamati Launch with a presentation by Nandan Nilekani and representatives from MeiTY, SEBI, multiple Bank CEOs, and AA entrepreneurs.
  • Sahamati conducts multiple public workshops on the AA ecosystem as published on its website and twitter accounts. 

All the Setu founders who were iSPIRT volunteers and Sanjay Jain have been subject to the prescribed process for managing conflict of interest. We stand by this and ask you once again to demonstrate greater proof than simply Sanjay Jain was once a volunteer, and is now a VC.

We want to add some more perspective on the people & organisations you’ve named:

Sanjay Jain is a beloved volunteer at iSPIRT who we think is one of the best design thinkers in the country. When he moved to BIF, iSPIRT’s Volunteer Fellows Council designed him and his activity within iSPIRT to be conflict-free. He therefore does not participate in any of the Sahay related work. 


JusPay is a supremely talented engineering company with a strong “build for India” bias. They have been market players who embrace some of our big ideas and have demonstrated willingness to pay-it-forward. We are ready to work with any such actors who share our commitment and mission towards solving for Rajni.

Setu and many other startups like them all have a grand vision for India and these are the very private innovators we help co-create public infrastructure for. The more of these there are, and the better they and their competitors innovate, India and Rajni ultimately gain. 

We trust this response gives you ample context to review and assess your allegations of conflicts of interest. You have not reached out once to clarify our plans or ambitions, except this questionnaire 30 hours before your deadline. We have answered these questions even in this aggressive timeline. A more frank and open discussion could have been easily arranged if you had reached out to us earlier, rather than at the end. Given the framing of your questions, and the tight response time you offered us, we can no longer brush this aside as simple oversight.

Your questions frame all iSPIRT engagements with the govt. and market players as potential conflicts of interest. It takes the very essence of what we do – help co-create public infrastructure for private innovation – and attempts to cast a doubtful light on it. To protect ourselves from being misquoted, we intend to publish this email exchange on our blog so people may see the whole exchange in context and decide for themselves.

Our second email response to the The Ken.

Sources allege that when iSpirt was involved in designing the APIs and SDKs for Sahay, there were no inputs taken from the market participants.  

Please refer to Q3 of your previous email. iSPIRT’s code of coordination with market participants is available here: Reference 4b. “Market Partners”)

Please understand that we first announce our vision in public. Then we co-create with partners who express conviction at an early stage. We call them early adopters or Wave 1. We work with them and iterate till we surface an MVP for wider review. At this point, the path to go live is clear, as is the ‘ownership'(reference your question #2), and it invariably involves a public review phase. After Wave 1, we work with Wave 2 participants as well for scaling adoption.

The mental model you should have for iSPIRT Vision/Wave 1/ Wave 2 is those of Alpha/closed Beta/Public beta in the technology world. This is not an uncommon practice.

I can tell you that I have personally been in multiple feedback sessions on the APIs with Wave 1 market participants. It constitutes a large part of my work. Therefore, I can categorically deny these allegations. I can understand the confusion if your sources are not from Wave 1. They are open to participate in Wave 2. Before you allege that our process is not collaborative, please clarify with your source if they are confused about Wave 1/Wave 2.

Also once iSPIRT hands over the tech platform to the operating units, who guarantees end-use limitation of data, and who is accountable for breaches? Who answers to the Data Protection Authority when it eventually comes up? Also, who will end up owning Sahay?

There will be many marketplace implementations each using common APIs and building blocks. Some of these standards will be de-jure standards (like Account Aggregators). Others, like between Banks and marketplaces will be de-facto standards. Page 125 of the UK Sinha MSME Committee Report provides details of this. Please consult this and feel free to ask further questions.

Please reach out to me at [email protected] for any questions.

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iSPIRT Playgrounds Coda

As you may have heard from us or read about in our publications, iSPIRT takes the long view on problems. We call ourselves 30 year architects for India’s hard problems. The critical insight to a 30-year journey of success is that it requires one to be able to work with and grow the ecosystem, rather than grow itself. An iSPIRT with more than 150 volunteers would collapse under its own weight. Instead we work tirelessly to build capacity in our partners and help them on their journeys. We remain committed to being in the background, taking pride in the success of our partners who are solving for India’s hard problems.

However, many people think we’re trying to square a circle here. Why would anybody, that too, folks in Tech jobs who get paid tremendously well, volunteer their time for the success of others? 

The motivation for volunteering is hard to explain to those who have not experienced the joy volunteering brings. Our story is not unique. Most famously, when the Open source movement was taking root, Microsoft’s then CEO, Steve Ballmer, called Open Source “cancer”.

We have published all of our thinking on our model as and when it crystallised. However, we realised a compendium was needed to put our answers to the most commonly expressed doubts about iSPIRT in one place. This is that compendium for our volunteers, partners, donors and beyond.

1. What is iSPIRT?

a) iSPIRT is a not-for-profit think tank, staffed mostly by volunteers from the tech world, who dedicate their time, energy and expertise towards India’s hard problems.

b) iSPIRT believes that India’s hard problems are larger than the efforts of any one market player or any one public institution or even any one think-tank like ourselves. These societal problems require a whole-of-society effort. We do our part to find market players and government entities with the conviction in this approach and help everyone work together.

c) In practical terms, this means that the government builds the digital public infrastructure, and the market participants build businesses on top of it. We support both of them with our expertise. We have iterated this model and continue to improve and refine this model.

d) To play this role we use our mission to align with the Government partners, Market partners and our own volunteers. We believe those who have seen us work up close place their trust in us to work towards our mission. Our long-term survival depends on this trust. All our actions and processes are designed to maintain this trust, and so far if we have any success at all, it can only be seen as a validation of this trust.

2. What is our volunteering model?

a) Anyone can apply to be a balloon volunteer, and we work with them to see if there is a fit.

b) The ideal qualities of a volunteer are publicly available in our Volunteering Handbook, the latest one was published in December 2017.

c) We require every volunteer to declare their conflicts, and ask them to select a pledge level. This pledge level determines their access to policy teams and information that can lead to potential conflict of interest. For every confirmed volunteer, we make available this pledge level publicly on our website.

d) We are often asked what’s in it for our volunteers. We let all our volunteers know this is “No Greed, No Glory” work. Wikipedia is maintained by thousands of volunteers, none of them get individual author credits. What volunteers get is the joy of working on challenging problems a sense of pride in building something useful for society a community of like-minded individuals who are willing to work towards things larger than themselves

e) There are not too many people who would do this for no money, but it does not take a lot of people to do what we do. All of this is given in much greater detail in our Volunteer Handbook.

3. How does iSPIRT decide the initiatives it works on?

a) We have seen success due to the quality of our work and the commitment to our mission. We only take on challenges related to societal problems where technology can make a difference.

b) Even within those problems, our expertise and focus is in solving the subclass of problems where the hard task of coordination between State and Market, between public infra and private innovation is crucial to the task at hand.

4. How does it work with State and Market partners

a) On the hard problems we select in #3 above we assemble a team of volunteers. These volunteers outline a vision for the future. We begin by sharing this vision in multiple forums and creating excitement around them. Examples of these forums are: 

  1. 2015: Whatsapp moment of India. Nandan Nilekani presentation on the future of finance and many articles written about it
  2. 2016: Startup India Launch – Jan 2016 13th. India Stack unveiled as part of official program of Digital India (Public event)
  3. 2017: Cash Flow Lending – DEPA launch 2017 August – Carnegie India Nandan Nilekani and Siddharth Shetty Presentation
  4. Many different public appearances by Pramod Varma, Sharad Sharma, Sanjay Jain, Nikhil Kumar
  5. 2019: Siddharth Shetty explaining AA at an event at @WeWork Bangalore
  6. 2019 Sahamati Launch with a presentation by Nandan Nilekani and representatives from MeiTY, SEBI, multiple Bank CEOs, and AA entrepreneurs.

b) On market partners

i. We work with any market partner who shows conviction towards the idea, and are willing to commit their own resources to take the vision forward. Previous and current partners include banks, startups, tech product and service companies. These early adopter partners form part of our Wave 1 cohort. 

ii. We dive deeper with this wave 1 cohort and iterate together to build on the “private innovation” side of the original vision with their feedback. This is developed with the mutual commitment to sharing our work in the public domain, for public use, once we have matured the idea. We work with them and iterate till we surface a MVP for wider review.

iii. At iSPIRT, we don’t like mission capture. There are no commercial arrangements between iSPIRT and any individual market participants. 

iv. We never recommend specific vendors to any of our partners.

v. New infrastructure/ new frameworks often require the creation of a new type of entity. We engage with these through domain specific organizations such as Sahamati for Account aggregators, as an example.

vi. After Wave 1 partners co-create an MVP, we open up for wider public review and participation. We make public all of our learnings to help the creation of Wave 2 of market participants.

vii. The mental model you should have for iSPIRT Vision/Wave 1/ Wave 2 is those of Alpha/closed Beta/public Beta in the tech world.

c) On government partners

i. We work together with any government partners who show conviction towards the idea, and are willing to commit their own resources to take the vision forward. Previous partners have been RBI, NPCI, MeiTY, TRAI, etc.

ii. We dive deeper with these partners and iterate together to build on the “public infrastructure” side of the original vision with their feedback. As part of the government process, many authorities have their own process to finalize documents, etc. Many of these involve publishing drafts, APIs etc. for feedback, and potential improvement from market participants. We publish the work we do together and invite public comments. Examples: UPI Payment Protocol; MeITY Electronic Consent Artefact; ReBIT Account Aggregator specifications

iii. We only advise government partners on technology standards and related expertise. 

iv. There are no commercial arrangements between iSPIRT and government partners, not even travel expenses.

v. We never recommend any specific market players for approval towards any licenses or permissions. Both iSPIRT and our partners would suffer greatly if this process was tarnished.

  1. With UPI we did not recommend any individual PSPs for inclusion in the network. This was entirely RBI and NPCI prerogative.
  2. Similarly for AA, RBI alone manages selection of AAs for approvals of licenses.

vi. We also respond to public comments wherever they are invited. The following are some examples of our transparent engagement on policy issues.

  1. iSPIRT Public Comments & Submission to Srikrishna Privacy Bill
  2. iSPIRT Public comments to TRAI Consultations
  3. Support to RBI MSME Committee Report
  4. Support to RBI Public Credit Registry Report

5. How does iSPIRT make money?

a) iSPIRT’s expenses includes a living wage for some of its full-time volunteers, travel expenses and other incidental expenses related to our events. This is still a relatively small footprint and we are able to sustain entirely on donations.

b) These donations come from both individuals and institutions who want to support iSPIRT’s long-term vision for India’s hard problems. Sometimes, donor institutions include our market partners who have seen our work up close.

c) Partnerships do not require donations. We engage with many more market partners who are NOT donors than donors who are market players.

6. How does iSPIRT protect against conflict of interest?

We see two avenues of conflict of interest, and have governance mechanisms to protect against both

a) First is Donor Capture. We try to structure donation amounts and partners such that we are not dependent on any one source of funds and can maintain independence

i. We maintain a similar separation of concerns as do many news organizations with their investors.

ii. Our volunteers may have a cursory knowledge of who our donors are. However, this knowledge makes no difference to their outcomes.

b) Second is Volunteer conflicts, where they may get unfair visibility or information to make personal gains.

i. We screen for this risk extensively in the balloon volunteering period.

ii. We have hard rules around this that are strictly enforced and constantly reminded to all our volunteers in all our meetings.

iii. For volunteers who need advice whether a potential interaction could constitute conflict we provide an easy avenue through our Volunteer Fellows Council. The council will advise on whether there is conflict and if yes, how to mitigate it.

iv. To prevent a “revolving door” situation, we require that volunteers from the policy team leaving to continue their careers in the industry undergo a “cooling-off” period.

To volunteer with us, visit: volunteers.ispirt.in

The post is authored by our core volunteers, Meghana Reddyreddy and Tanuj Bhojwani. They can be reached at [email protected] and [email protected]

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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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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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#BlackSwan: Has Corona turned your Vitamin into an Aspirin?

One lens I use to evaluate startup opportunities – and have written about in the past – is, are you offering an Aspirin or a Vitamin? My basic premise is that in order to do business with a startup, one has to overcome a lot of inertia – whether you are consuming and more so if you are a business. One way to overcome the inertia is to literally bribe the customer with an offer or cashback that makes it too good to be true. Another is to offer a zero-risk trial period. In most cases, however, savvy customers are simply asking the question – do I need this? Is it solving a pain point? Or is this a nice to have? In other words, is this an Aspirin (pain killer) or a Vitamin (nice to have).

In many cases, startups flounder because the pain isn’t as bad as founders imagine it to be – and the search of establishing Product Market Fit is really one of identifying which customer will deem my product to be an Aspirin. Hopefully, you find that early and if not you keep iterating until you identify that customer segment, the right positioning of the product, and of course getting the product right. At that point, from a VC funding perspective, the other unanswered questions remain, “is this a large enough customer segment – i.e. is the prize worth winning? Can you get to scale before an incumbent or a copycat can outrun you – in other words, is the pain so strong that nobody will look for alternatives? Is the product differentiated enough – and why will YOU win?

When BlackSwan events like Covid19/Coronavirus occur, entrepreneurs often panic and the first reaction is to slow-down everything, hunker down and wait for “normalcy” to return. While this is typically a prudent thing to do, it’s not always the smartest. BlackSwan events do things for us at 1000x the rate of change than one might’ve anticipated – and often lead to permanent behavioral change. This could mean that a product that seemed like a Vitamin before the event suddenly has become an Aspirin, and better still, is likely to remain an Aspirin for ever.

A few examples in the recent past – demonetization in India that ensured that everyone was made aware of digital payments was an opportunity that Paytm and later the UPI Ecosystem grabbed and India hasn’t looked back. While the cynical ones will point out that cash is back, the reality is that everyone from my milkman to my maid to my mother is now at least willing to accept payments digitally – and as I’ve Tweeted elsewhere my 83-year old #digimom is a PhonePe Aficionado! So people’s behaviors change because they have NO alternative.

Covid19/Coronavirus is an even bigger event than Demonetization because it’s global and has impacted EVERYONE – and its caused a change in behaviour that in many cases is likely to be permanent. Suddenly working from home doesn’t seem esoteric – and many founders I’m speaking with are also pleasantly surprised with the increase in productivity, the higher level of trust and creativity with their teams, the more focused execution, etc. Suddenly telling visitors to wash their hands when they meet you, to do namaste, to do contactless delivery no longer seems rude or inappropriate. Suddenly old economy companies are realizing the benefits of Video Conferencing and not insisting on vendors visiting them – rather they are almost insisting on people NOT visiting them. There are dozens of other changes happening in all facets of what we do and how we interact with others.

If you’re an entrepreneur, what do you do? Do you simply wait it out? Do you watch your competitors morph from the sidelines?

Or do you grab the bull by the horn and say “my time has come“!

Whatever you do, make sure you take time out to try and figure out if some dramatic non-linear change is happening, especially directly or in adjacency to your business – especially one that may do one of two things:

  • dramatically increase your market size
  • dramatically increase your rate of “adoption”

If you sense either opportunity, then you owe it to yourself to put a skunkworks team together and quickly validate that this is indeed the case and then figure out the fastest path to OWN that opportunity. Make sure that whatever you are doing is going to significantly improve life for a LARGE number of customers. My personal view is that if there are a compelling value proposition and an opportunity to permanently change customer behavior, focus on it and not over-optimize on the business model initially – but that’s a call dependent on your business.

In all cases, however, you may never get this golden opportunity to 1000x your business opportunity and rate of growth – step out of your box, out of your comfort zone and think hard, experiment quickly and make magic happen. That’s the life and luxury of being an entrepreneur! Because if you aren’t – perhaps your competitor is – and certainly some other startup is being born! Disrupt yourself – before someone else does!

A few founders I spoke to about this asked me, “This is a truly unfortunate time for the world – will we be seen as trying to take advantage of this situation”? The answer I give them is simply, “The world will reject whatever isn’t addressing a pain point – and addressing a pain point is not just grabbing the opportunity, it’s fulfilling a responsibility”.

This is an unusual time and certainly an unfortunate time – but make it count!

About the Author: Sanjay Swamy is Co-Founder & Managing Partner at Priven Advisors, advisory to Prime Venture Partners, a Seed-Stage VC Fund in Bangalore. Prime invests in Fintech, SaaS, HealthCare, Logistics & Education focused technology startups that are addressing real pain-points in the industry! Sanjay can be followed on Twitter @theswamy

Please note: The article was first published on Sanjay’s personal linkedin profile.

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Account Aggregators : Opportunities For Entrepreneurs And Technology Companies

The Account Aggregator (AA) construct defined in this RBI circular, this technical specification, and this article is imminently coming to life. Individuals and businesses in India will be able to link their bank and financial accounts with an AA application and begin leveraging their own data in order to avail of cheaper, faster, and more customized products and services. This document lays out some of the use cases and opportunities open to entrepreneurs and companies to build on top of this infrastructure.

iSPIRT will be hosting a meetup in Bangalore to dive deeper into these opportunities for any companies or entrepreneurs interested in learning more. Details about the meetup will be shared after the following description of the various opportunity areas borne of the AA ecosystem.

Basic potential use cases leveraging AA applications:

  • A user can link his HDFC Securities, SBI, and ICICI accounts and use an AA app to share his last 12 months bank statements and demat statement in programmatic form with a fintech. The user is able to see his latest account balances across all his banks and asset managers in one place. The fintech is able to visualize all user transactions according to category, spend amount, date, and payment instrument across all the user’s bank accounts. This use case could happen on a fintech’s mobile app, a bank’s netbanking portal, or any other interface.
  • A group of users can share their anonymized stock portfolios with a company which is able to give them investment advice or connect them with a group of like-minded investors for further discussions.
  • A user can share her bank statement with a fintech which can analyze her financial behaviour and recommend products to help the user save money eg. “Your bank history shows that you often go into overdraft. You would save 20,000 rupees per year if you switched to XYZ bank which has a more lenient overdraft charge”

Dates for AA framework to go live to all citizens: May 20th, 2020

Current status: Several of the largest financial institutions are in production testing of their AA APIs. Note that the first wave of companies that can consume AA data is limited to companies regulated by RBI, SEBI, PFRDA, and IRDA. 

Opportunities in the AA ecosystem: There are 200 banks, 10,000 NBFCs, and thousands of other companies which will need technology to help them adapt to the AA paradigm, There are opportunities to help these companies with:

  1. Middleware to help them consume and share data in the specified format
  2. Middleware to help them manage customer consent and customer data (data governance and data security products)
  3. Middleware to help companies provide good AA UX flows on their apps
  4. End-user applications such as the personal finance applications mentioned above

In addition to these opportunities around Account Aggregators themselves, there are also several opportunities to build software products and offer services around the fields of Cash Flow Lending, Loan Service Providers, and UPI applications.

Cash Flow Lending (CFL) background:

  • Most lenders use traditional credit scores from credit bureaus to understand borrower credit worthiness
  • Many individuals and companies in India do not have credit scores (New To Credit – NTC)
  • Many individuals and companies in India do not have good credit scores (subprime)
  • Getting access to credit for subprime and NTC borrowers is very difficult
  • If any bank or lender gives a loan to subprime or NTC lenders, it usually at a high interest rate 
  • In many other cases, banks only give such subprime loans if the borrower can give some hard tangible assets (such as property) as collateral
  • Many borrowers, especially small businesses, cannot give this collateral and therefore cannot get access to credit products that can greatly improve their business health
  • The reasons mentioned above are partly responsible for India’s low credit penetration
  • There is a new underwriting and lending model emerging called Cash Flow Lending
  • In this new model, a business shares its historical business performance with a lender
  • This includes historical invoices raised on GSTN, and bank statement records that capture all of a business’ cash inflows and outflows
  • Using this data, a lender can understand the likely future performance and creditworthiness of a borrower
  • Moreover, the lender can plot the historical cash flow curve of a particular borrower to understand how to best structure and customize a financial product
  • This form of lending happens sparingly today because it is expensive for a lender to gain access to a borrower’s verified GST invoices and verified cash flows from a bank in order to reliably plot the cash flow curves of the borrower
  • Due to upgraded APIs in the GST system and access to bank statement data from the AA framework, it is now simple and cheap for lenders to understand the verified business performance and cash flows of a borrower
  • Due to upgrades in the UPI system, it is also possible for a lender to lock down any future incoming cash flows of a borrower (instead of taking current assets as collateral, a lender can now take future assets – namely cash flows – as collateral)

Current status on Cash Flow Lending: Lenders are free to use whichever underwriting model they see fit. Lenders wishing to begin consuming machine-readable GST invoice data and bank statement data will be able to do so once the AA framework goes live on May 20th.

Opportunities in Cash Flow Lending:

  1. Underwriting engines to help lenders and insurers analyze data and take decisions based on customer financials and business relationships
  2. UPI interfaces to help borrowers and lenders exchange e-mandates (the instrument used to lock down future cash flows of a borrower)
  3. Lending businesses, particularly those serving NTC or subprime borrowers

In order to deepen the penetration of financial services to underserved individuals and borrowers, a new type of financial company has been proposed. This company is known as a Loan Service Provider (LSP). 

LSP background:

  • Marketplaces such as Uber, Swiggy etc. aggregate high numbers of suppliers (drivers, restaurants)
  • Many of these suppliers would benefit from access to credit to improve their lives or businesses
  • For the suppliers, getting access to credit is not always straightforward, as in the case of an Uber driver with a subprime credit score
  • The marketplaces, by virtue of the data they have about the suppliers (eg. number of rides done in a day, customer ratings, peak operating hours), are in a good position to help the suppliers apply for financial products
  • Furthermore, building a financial services layer into their supplier offering would help marketplaces deepen the value proposition of their platform
  • The problem is that building this financial services layer involves building bilateral custom relationships with lenders or finserv providers
  • If the technical integrations and data pipelines between marketplaces and lenders can be standardized and abstracted, it could be much easier for marketplaces to plug new lenders into their finserv layer and much easier for lenders to plug into different marketplaces
  • An LSP is the company which provides the software linking the marketplaces with the lenders

LSP timelines and status: A technical blueprint for an LSP is being developed. Industry participants are welcome to participate in this process or develop and implement their own ideas for an LSP (although having many different LSP standards would defeat the purpose of the exercise, and the likely outcome is that lenders converge on a preferred standard).

LSP Opportunities:

  • LSPs can build a bridge between marketplaces and lenders, allowing suppliers on the marketplace to share data with the lenders 
  • Underwriting engines for different kinds of marketplace suppliers (eg. a Swiggy engine might use the number or orders, seasonality of orders, user ratings, and average delivery time to develop a credit model for restaurants)

Any companies or entrepreneurs wishing to learn more about these opportunities are invited to attend a meetup hosted by iSPIRT on the 13th of March in Bangalore.

You can register on this link to attend the workshop. Please note that the workshop is invite only.

References:

  • UK Sinha’s Report of the Expert Committee on MSMEs: Loan Service Providers (LSPs) will be an agent of the borrowers is recommended for consideration by RBI: Announcement, Full Report (Section 8.2.1 on page 108 about LSPs and Section 9.26 on page 126 about Cash Flow-based lending)
  • Account Aggregator Resources
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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 [email protected] and [email protected] 

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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 [email protected]

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Fast-Tracking Inclusion: Digital Infrastructure for Identity, Payments, and Data Empowerment

In 2011, just over 3 out of 10 Indians had bank accounts. This number was, according to the Bank of International Settlements’ analysis, in line with that of other countries with a similar GDP per capita.  By 2018, more than 8 out of 10 Indians had bank accounts and around 330 million people had been brought into the formal financial system. This rate of progress in GDP would normally take about half a century, as per the BIS; India managed it in just under 8 years. In the talk embedded below, I explain what made this progress possible. 

The last two decades have brought to life the power of technology platforms in reshaping economies. Amazon, Google, Facebook, and Uber have changed the game for e-commerce, information access, communication, and private transport. But what many miss is that most of these innovative platforms rely on shared digital infrastructure often invisible to the end consumer.  For example, look at the TCP/IP protocol that powers the Internet, the GPS signals that allow navigation, or the SMTP protocol that makes all email interoperable. While visionary entrepreneurs are adored and admonished prominently, it is this class of silent public technology investment that made their innovations possible. 

India embarked on a journey to solve for the challenges faced by a typical micro-enterprise owner. Let’s call her Nandini. In the process, the country built a series of digital public infrastructure over the course of a decade that addressed the many layers of bottlenecks she faces. For instance, Nandini’s first verifiable digital ID allowed her to more easily open a bank account, where KYC regulations and gender barriers held her back previously.   

Possibly her biggest impediment is a lack of access to loans that could keep her business afloat. Her receivables tend to come in with significant delays, leading to short-term working capital shortages. Yet, less than 8% of MSMEs like hers have access to formal credit, and these figures have been on the decline. Share of credit to MSMEs of total bank lending dropped from 17.3% in 2010 to 13.6% by 2018, leading to a current estimated credit shortfall of about ₹26 trillion.

India recently kicked off the Data Empowerment architecture, a framework for consented data sharing across the financial sector. This allows Nandini to share data on her business’ regular invoices or GST payments seamlessly and securely.  Any bank or NBFC can now offer a regular stream of small-ticket working capital loans based on her demonstrated ability to repay. This is in sharp contrast to the status quo, where banks typically offer only larger loans backed by collateral. Using cash flows rather than collateral as the basis for credit is known as Flow-Based lending. Because producing collateral is a  roadblock for the poorest Indians, Flow-Based lending may be their only opportunity to access the credit they sorely need for growth.  

Our work is not yet done. But I’m confident that with continued political will, proactive regulators, and further innovation, India will continue to surprise the world with its solutions.

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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 [email protected] and [email protected]

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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 [email protected]

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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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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#1 – Thinking about Design or Design Thinking?

Design thinking has well and truly become the buzzword in the Indian Startup ecosystem today. With the rise of this phrase, we have seen an unprecedented rise in the status of formerly undervalued ‘designers’. Do designers possess some superpowered thought process that allows them to ingest any problem and come up with elegant and practical solutions? 

Design thinking, in essence, is a systematic way of tackling problems and creating innovative sustainable solutions. 

Empathize → Define → Ideate → Prototype → Test. 

Seems simple, right? 5 steps to solve any problem. An incredibly attractive and easy-to-employ process.

“The emphasis on “thinking” makes the point that design is more than a pretty face: it has substance and structure. Design methods can be applied to any problem: organizational structure, factory floors, supply-chain management, business models, and customer interaction.” – Don Norman

Design Thinking is a useful myth


If design thinking is so efficient, why is it then that 90% of Indian startups fail within 5 years of inception? Did they try to solve irrelevant problems? Did they not figure out a growth strategy? Do entrepreneurs not find the right designers? Do entrepreneurs really have to employ Design Thinking themselves?

Designers who are not designers

Before the stone-pelting begins, let me clarify. If design thinking is just a way of solving problems, then isn’t everyone a designer? Doesn’t everyone solve problems on a daily basis? The scale of these problems might differ wildly but shouldn’t we all be solving problems in the most elegant manner possible? 

The term Design thinking is essentially a wrapper around the traditional creative thinking process. Musicians, artists, writers have all historically employed creative thinking to innovate and create amazing works. 

The singular identifiable difference between creative thinking and design thinking – while it was seemingly rare for creators (in the outdated and traditional sense) to create iconic work, design thinking democratizes the whole process; instead of an exception, design thinking demands that it be the norm. 

Jared Spool in his Medium post argued that the backend performance engineers at Netflix are designers too. The main objective of these engineers is to ensure that their servers work effectively and data gets delivered in a timely manner to a consumer.

“And yet, at the very moment that a Netflix viewer’s video stream stops and that spinning animation appears, indicating the player is now awaiting more data, these engineers make a dramatic change. They become user experience designers.” – Jared Spool

The Power of Experience Mapping


If backend engineers are also designers, where does this stop? Are people from marketing, sales, technology also designers then? Turns out that yes, they are all designers. As a rule of thumb, design thinking insists that anyone whose work adds to the consumer/customer experience is essentially a designer whether you like it or not. 

ये सब तो ठीक है पर भाई कहना क्या चाहते हो?

मुद्दे की बात ये है की अगर सब डिज़ाइनर है तो बेचारे डिज़ाइनर क्या करे? Turns out the problem doesn’t fully lie with “designers who aren’t designers”. ‘Designers’ are also to blame here.

Consider the following statement – “Designers make things look good”. Does this make you angry? If yes, you’re having the correct emotional reaction and you can stop reading now. 

If not, is the job of a designer to make a product feel good or look good? Even if a product looks and feels good, does it really add to the business goals of the organisation? Does the role of a designer end at the deployment of their ideas?

My friend, Dharmesh, argues that most ‘designers’ nowadays do not even consider implementation and measuring impact of their ideas as a part of their work. The above visual is from his presentation titled “A Designer’s Ambition – What does the peak of your Design career look like”. 

An idea is only as good as its performance in the real world, right? So why does it seem that most designers don’t consider implementation and impact a part of their job? 

Turns out there is a reason why most designers skim over the implementation and impact of their work. According to a McKinsey report (The Business Value of Design) when hiring a designer, just over 50 percent executives of 300 publicly-listed companies globally admitted that they have no objective way to assess or set targets for the output of their design teams. How much of this is true for the Indian ecosystem? 

Could it be? Could it really be that the design industry in India too is operating on the vague notions of what looks/feels good? Can designers evolve to incorporate implementation and impact in their JD?

The same report also outlines how companies that put human-centric design at the centre of their companies, grew revenues by 32 percentage points faster and Total Returns to Shareholders by 56 percentage points as opposed to companies that failed to do so.

Summing up

If you’re looking for some sort of resolution to everything I said above, then I humbly apologise. I don’t have answers. 

What I want to leave with is more questions. Questions such as –

  • Can entrepreneurs come up with metrics that accurately depict the contribution of design to their organisational goals?
  • How quickly can ‘Designers’ adapt and incorporate implementation and impact into their roles?
  • Even if we move on both of the above fronts, will that result in Indian products with true human-centric design? 
  • Is Design Thinking the secret ingredient that will help India’s startup ecosystem create big wins like the Googles, Facebooks and WeChats of the world? 

There are lots and lots more questions that need to be raised and answered before we dismiss or accept Design Thinking as a key factor in the success of an organisation. If you want to raise more questions or volunteer with us to help answer some, please write to me on [email protected]