Why in News
India's DPI model enables identity, payments, documents and interoperable services at scale. The next challenge is preserving openness and inclusion while reducing privacy, cybersecurity, exclusion and concentration risks.
Static Foundation
DPI provides shared digital rails. UPI is an interoperable instant-payment system operated by NPCI. Interoperability can reduce lock-in, but network effects can still concentrate users and data. Privacy-by-design includes minimisation, purpose limitation, security and accountable access.
Prelims Focus
UPI is not a commercial bank and does not itself hold deposits. Inclusion requires alternatives when connectivity or authentication fails, including assisted and offline channels.
Mains Perspective
Separate foundational infrastructure from contestable service layers, publish standards, strengthen grievance redress and enforce data-protection and cybersecurity obligations.
Practice
MCQ: UPI does NOT itself accept deposits as a bank; interoperability can reduce switching barriers; assisted/offline channels aid inclusion. Correct: 2 and 3.
Mains: Discuss safeguards for inclusive, competitive DPI.