India’s Digital Leap: Financial Rails Soar, Healthcare Seeks Traction

The midday sun beat down relentlessly as my cousin, a small shopkeeper in a bustling Delhi market, effortlessly accepted a payment with a quick scan of a QR code on his phone.

No cash exchanged, no fumbling for change, just a chime and a confirmation, all powered by UPI.

Later that week, however, a very different scene unfolded.

His elderly mother needed to retrieve her medical history for a specialist, a process that involved physical visits to multiple clinics, long queues, and a frustrating paper chase across different healthcare providers.

The contrast was stark: one transaction instant and seamless, the other a labyrinth of bureaucracy and delay.

This everyday observation captures the heart of India’s remarkable, yet uneven, digital transformation.

The nation has embarked on an ambitious journey to build a robust digital public infrastructure (DPI), an evolving backbone for its growth strategy (IIM Bangalore’s Center for Digital Public Goods, 2025).

While digital payments and identity systems have surged forward, making daily life easier for millions, other critical sectors, particularly healthcare, find themselves lagging, still struggling to harness the full potential of these digital rails.

In short: India’s DPI excels in finance with Aadhaar and UPI at the leverage stage, but healthcare’s Ayushman Bharat Digital Mission (ABDM) and Ayushman Bharat Health Account (ABHA) remain in implementation due to low awareness and fragmented adoption, according to a 2025 IIM Bangalore report.

The Rise of India’s DPI: A Global Middle-Path Template

India’s journey toward digitalizing public services is not merely a domestic achievement; it is increasingly seen as a template for the Global South.

The country has forged what is described as a middle-path digital model, skillfully balancing state-led infrastructure development with market-driven innovation (IIM Bangalore’s Center for Digital Public Goods, 2025).

This India digital public infrastructure has moved beyond being a back-end enabler.

Today, core components such as digital identity, secure payments, and consent-based data sharing are deeply embedded across vital areas like welfare delivery, financial services, health, education, commerce, and logistics (IIM Bangalore’s Center for Digital Public Goods, 2025).

To systematically assess the maturity of these digital rails, the IIM Bangalore report proposes a three-stage DPI maturity framework: implementation, adoption, and leverage.

This framework aligns with global standards set by organizations such as the UN Development Programme, World Bank, and OECD, providing a clear lens through which to view Indias digital transformation journey (IIM Bangalore’s Center for Digital Public Goods, 2025).

It allows us to pinpoint where the country has achieved remarkable success and where significant challenges still lie for public goods in digital economy.

Finance at Leverage: Aadhaar and UPI’s Unprecedented Success

When we examine the financial sector, India’s DPI achievements are truly staggering.

According to the IIM Bangalore report (2025), DPI finance stands out as the country’s most mature DPI use case, firmly situated in the leverage stage.

This means core digital identity systems like Aadhaar, the Unified Payments Interface (UPI), digital locker services (DigiLocker), electronic Know Your Customer (eKYC), and the Account Aggregator framework are not just in place; they are actively supporting multiple use cases and fostering large-scale private innovation.

The statistics underscore this success.

Aadhaar coverage, for instance, has reached near-saturation, with 1,330,000,000 enrolments as of 2025 (IIM Bangalore’s Center for Digital Public Goods, 2025).

UPI, in particular, has become the de facto retail payment system across the nation, transforming how millions conduct daily transactions through digital payments India.

The insight here is clear: Indias financial DPI is a highly mature ecosystem, serving as a powerful model for India digital transformation.

This implies that other sectors within India, and indeed countries across the Global South, can draw valuable lessons from the seamless integration and widespread public and private adoption of these foundational digital identity systems and digital payments platforms.

Healthcare in Implementation: The Roadblocks for ABDM and ABHA

In stark contrast to the financial sector, Indias health DPIs, which include the ambitious Ayushman Bharat Digital Mission (ABDM) and the Ayushman Bharat Health Account (ABHA), remain largely in the implementation stage (IIM Bangalore’s Center for Digital Public Goods, 2025).

While vital registries, standards, and pilot programs are in place, ecosystem-wide adoption remains patchy.

This disparity is particularly striking given the demonstrated power of digital health initiatives during the pandemic, such as CoWIN for vaccination management and eSanjeevani for telemedicine.

These successes, however, have not yet translated into a unified health data layer comparable to the efficiency and ubiquity of the digital payments sector (IIM Bangalore’s Center for Digital Public Goods, 2025).

The IIM Bangalore report identifies several key bottlenecks hindering the widespread adoption of DPI healthcare.

These include low awareness among the general public and healthcare providers, fragmented adoption across both public and private providers, and critically, limited incentives for hospitals, insurers, and small clinics to integrate with the ABDM framework (IIM Bangalore’s Center for Digital Public Goods, 2025).

The insight is that despite specific digital health successes, Indias overall health DPI lags significantly behind its financial counterpart.

This implies a pressing need for strategic interventions that specifically address the challenges of low awareness, fragmented adoption, and the lack of compelling integration incentives to truly bridge the gap in healthcare digitalization.

Charting the Next Phase: AI, Governance, and Incentives for DPI

The future evolution of India’s DPI will hinge on several critical themes, according to the IIM Bangalore report (2025).

These themes are designed to propel all sectors towards the leverage stage, mirroring the success of financial services.

First, there is the essential role of embedding AI into DPI.
This is envisioned for diverse applications, including enhancing credit assessment, strengthening fraud detection, and developing sophisticated health analytics.

This integration of AI in public services promises to unlock new levels of efficiency and insight.
Second, the tightening of data governance and consent architectures is paramount.
As more sensitive data flows through digital rails, robust frameworks for data privacy and user consent become non-negotiable, ensuring digital sovereignty India.
Third, the report emphasizes integrating incentives across all stakeholders – citizens, firms, and the state.
This means creating clear value propositions and rewards for participation and adoption, addressing the very bottlenecks currently seen in healthcare.
Finally, DPI is crucial for safeguarding digital sovereignty in an era marked by the dominance of hyperscalers and increasing cross-border data flows.
The insight is that AI, improved data governance, and integrated incentives are absolutely crucial for the next phase of DPI evolution (IIM Bangalore’s Center for Digital Public Goods, 2025).

The implication is clear: future DPI strategies must proactively incorporate these themes to enhance utility, security, and broader adoption across all sectors, thereby solidifying digital sovereignty and continuing India’s digital transformation.

Your Playbook for Bridging the Digital Divide in Health DPI

To accelerate healthcares journey from implementation to leverage, a targeted playbook is essential, drawing lessons from DPI finance successes and addressing identified challenges.

One key step is to launch targeted awareness campaigns.
Combat low awareness of health DPI initiatives like Ayushman Bharat Digital Mission and ABHA.

Develop multi-language campaigns using local media, community leaders, and digital platforms to educate citizens and providers on the benefits of digital health initiatives and the creation of digital identity systems for health.
Another is to integrate financial incentives.
Address limited incentives for providers by offering financial rewards or subsidies for hospitals, clinics, and insurers to integrate with ABDM and actively use ABHA.

Consider performance-based incentives for data quality and usage.
Ensure seamless interoperability by tackling fragmented adoption.
Enforce and support robust standards for data exchange, prioritizing open APIs and common protocols that make it easy for diverse public and private health systems to connect and share information securely.
Begin piloting AI for health analytics by embedding AI into health DPI for critical functions.
Focus on AI in public services such as early disease detection, predictive analytics for resource allocation, and personalized care recommendations, ensuring patient consent architecture.
Strengthen data governance frameworks by implementing a strong, centralized data governance policy for health data.
This includes clear guidelines for data collection, storage, sharing, and usage, with a focus on privacy by design to build trust among users and providers.
Lastly, foster public-private partnerships.
Encourage collaboration between government bodies and private health tech innovators, pharmaceutical companies, and insurance providers.

Leverage market-driven innovation to build user-friendly applications on top of the DPI rails, expanding the ecosystem of e-governance solutions.

Navigating the DPI Frontier: Risks, Ethics, and Trade-offs

The grand vision of India’s digital transformation also brings inherent risks and ethical considerations.

The emphasis on consent-based data sharing (IIM Bangalore’s Center for Digital Public Goods, 2025) highlights the critical need for robust data governance.

Mismanagement or breaches of the massive data generated by DPI could erode public trust and lead to significant privacy concerns.

This underscores the imperative for strong cybersecurity measures and transparent protocols for digital sovereignty India.

Another trade-off is the potential for digital exclusion, particularly in areas with limited digital literacy or access to technology.

While Aadhaar enrolments are high (IIM Bangalore’s Center for Digital Public Goods, 2025), ensuring equitable access to and understanding of all DPI services remains a challenge.

The push for a unified health data layer, though beneficial, must also carefully balance data sharing for public health with individual patient privacy, especially when embedding AI into DPI for analytics.

The goal of digital sovereignty must be balanced with the practicalities of cross-border data flows and international collaborations.

Measuring Success: Tools, Metrics, and Consistent Cadence

To ensure the continued growth and equitable expansion of India’s DPI, a structured approach to measurement and review is crucial.

Essential Tools:

Beyond foundational DPI components like Aadhaar, UPI, and DigiLocker, effective deployment requires robust analytics platforms to track usage and adoption.

Secure data vaults for consent-based sharing, AI development platforms for embedding intelligent features, and comprehensive cybersecurity tools are also vital.

Key Performance Indicators (KPIs) for DPI Development include:

Adoption Rate (percentage of target users actively using DPI components, e.g., ABHA IDs created and linked, UPI transactions frequency);
Transaction Volume/Value (scale of activity across financial and other DPI platforms);
Interoperability Success Rate (seamless data exchange between entities using DPI standards, especially in health);
User Satisfaction Scores (feedback from citizens and businesses on DPI service effectiveness);
Data Security Incidents (number and severity of breaches to ensure robust digital sovereignty); and
Private Sector Innovation Metrics (number of new applications or services built on DPI rails).

Review Cadence:

Monthly operations reviews assess adoption rates, transaction volumes, and immediate operational challenges.
Quarterly strategic evaluations analyze progress against long-term goals, particularly for lagging sectors like healthcare, adjusting implementation strategies.
Annual DPI impact assessments conduct comprehensive evaluations of socio-economic impact, review data governance frameworks, and update strategic roadmaps based on emerging technologies and global best practices for public goods in digital economy.

FAQ: Your Quick Guide to India’s DPI

What is India’s Digital Public Infrastructure (DPI)?: India’s DPI refers to foundational digital systems like Aadhaar for identity, UPI for payments, and consent-based data sharing mechanisms, which underpin various public and private services across the country (IIM Bangalore’s Center for Digital Public Goods, 2025).
Why are financial services DPI considered more mature in India?: According to the IIM Bangalore report (2025), financial DPIs like Aadhaar and UPI have reached a leverage stage with near-saturation coverage and support for extensive private innovation and diverse use cases.
What are the main challenges for healthcare DPI in India?: Challenges include low public awareness, fragmented adoption by various providers (hospitals, clinics), and insufficient incentives for healthcare entities to integrate with initiatives like the Ayushman Bharat Digital Mission (ABDM) (IIM Bangalore’s Center for Digital Public Goods, 2025).

Glossary

Digital Public Infrastructure (DPI):: Foundational digital systems (identity, payments, data exchange) built for public good, enabling various services.
Aadhaar:: India’s unique 12-digit identity number, based on biometric and demographic data.
Unified Payments Interface (UPI):: An instant real-time payment system developed by the National Payments Corporation of India (NPCI).
Ayushman Bharat Digital Mission (ABDM):: India’s initiative to create a national digital health ecosystem.
Ayushman Bharat Health Account (ABHA):: A unique health ID for individuals, enabling access to and sharing of health records digitally.
Leverage Stage:: The highest maturity stage for DPI, characterized by widespread adoption, multiple use cases, and large-scale private innovation.
Implementation Stage:: An early maturity stage for DPI, where registries, standards, and pilots are in place, but ecosystem-wide adoption is patchy.
Digital Sovereignty:: A nation’s ability to govern and control its digital infrastructure, data, and online activities within its borders.

Conclusion: Bridging the Digital Divide for a Unified India

The bustling market, my cousin’s effortless UPI transaction, and the paper-strewn struggles of his mother’s medical records tell a story of two Indias, digitally speaking.

One is sprinting towards a future of seamless transactions, while the other is navigating a complex, fragmented landscape.

The IIM Bangalore report (2025) illuminates this divide with clarity, offering not just a diagnosis but a roadmap.

India’s success with Aadhaar and UPI proves the immense power of well-designed DPI.

Now, the challenge lies in replicating that success in critical sectors like healthcare.

By focusing on integrating incentives, strengthening data governance, and strategically embedding AI, India can transform its digital health initiatives from pilots to pervasive tools.

This will not just streamline healthcare; it will foster a more unified, digitally empowered India.

The path is clear: build upon the robust financial rails, learn from the roadblocks in health, and forge a truly inclusive digital future for every citizen.

References

IIM Bangalore’s Center for Digital Public Goods. (2025). State of Digital Public Infrastructure in India 2025.

India’s digital rails at ‘leverage’ stage in finance, stuck in pilot mode in healthcare: study