Full transcript: Aadhaar chief architect Pramod Varma speaks on India Stack moonshot
NOTE: This is the full transcript, in Q and A format, of an interview I conducted for Indo Asian News Service. The scrunched format news story is linked here; this longer form content is for those who might be keen on a deeper read on the mental models behind the audacious, population-scale digital infrastructure being built in India.
3 key takeaways
- Varma asks us to think of India Stack in these terms: Can your neighbourhood vegetable vendor or domestic help get a $1,000 bridge loan for five days instead of the typical large sum bank loan of $100,000 for five years? What digital infra building blocks are needed to get there?
- “The underpinning construct of a digital infrastructure is to provide reusable Lego blocks that can be used by the market, by the society, by the government to rapidly construct and reconstruct solutions that are affordable, accessible, and give choice.”
- Varma explains the India Stack moonshot something like this: Dramatic increase in access to credit, healthcare, food and education and dramatic affordability of these services, at population scale, for Indians at the bottom of the pyramid.
NIKHILA NATARAJAN: Nearly a month ago, I wrote to Dr. Pramod Varma, chief architect of the world’s largest digital identity platform Aadhaar and said I’d like to talk about digital public goods during an ongoing healthcare emergency. He wrote back saying, “Please remember that I am a technologist and not a policy person. Not sure if I can be of use.” Many emails later, he joins us from Bangalore. I’m in the place which used to be the US epicenter of the pandemic. So, here we are. Dr. Varma and I and whoever is watching have experienced the pandemic in terms of stories and statistics. When city dwellers retreated indoors, we saw Indians from the bottom of the pyramid pouring out on the streets, just walking, without end. We don’t precisely know what all is imploding in each of their lives but their faces tell us all we need to know. These are large societal problem statements that have been exposed by the healthcare emergency. The context for today’s conversation is how to think about digital public goods at population scale that can intervene in Indians lives in times like these. I’m asking Dr. Varma to unbundle this to the micro and speak to us about the questions he is asking about this moment. Dr. Varma, as a technologist, can you peel back the onion and reveal to us the contours of a shared digital infrastructure — simple yet resilient in the face of ongoing micro crises in the human, lived world.
PRAMOD VARMA: It’s a very very tough situation indeed for millions of people around the world. Some of us are so privileged, we have no reason to complain. But we don’t even fully understand, what’s going on in many people’s lives. At least for the people building digital infrastructure, the way we think about (it) is what are the building blocks — Lego blocks that allows combinatorial solution building combining them very rapidly, because resilience is not about protecting against failure because that’s almost impossible to prevent even in technology for that matter. It’s about being resilient to failure. That means our ability to reshape readjust and still manage when something else goes wrong. When schools are closed, does the learning continue? When the workplace is disrupted, does work continue. Right. So it’s a very important thing to unbundle the workplace from work, learning from school and care from hospital because when you have only one way of doing, it doesn’t become resilient. So, the question is to allow many ways of doing. If you want many ways of doing, you need many solutions. And if you want many solutions to emerge, you need underpinning building blocks that can be used to build those solutions. And if everyone has to do that from scratch, it’s like cooking. It’s like doing your own harvest to cooking, it’s almost impractical, expensive, and not viable for many businesses to do. So the idea of digital infrastructure to create a set of shared building blocks that can be reused by the industry, by the marketplace, by the society and by the government — whoever is building the eventual solution. So that a set of diverse solutions, and processes are available. By doing that, they can reduce the cost of access. So if I reduce the cost of doing business, it becomes cheaper for the consumer to access. It is not only 20% of the people accessing, it’s about 80% of the pyramid accessing. Affordability is the next process, so you want it to be accessible. You want it to be affordable, and you want to give agency and choice. These three are the fundamental elements of everything that we are doing. If you look at healthcare, education, jobs. Do they have access to the opportunity, can they afford it and do they have a choice. And if you answer these three all the time in every domain, you will start unbundling to realize that, to make that happen, we have no choice but to build bring market society and government together, and not one against each other and to bring them together to create a set of diverse solutions. They need a set of Lego blocks to work. If only a few large companies with lots of access to capital can afford to do it, that doesn’t give you choice, it doesn’t give your diversity, It doesn’t give you agency, and you will end up with one solution for the country. So the underpinning construct of a digital infrastructure is to provide reusable Lego blocks that can be used by the market, by the society, by the government to rapidly construct and reconstruct the solutions that are affordable, accessible, and give choice.
NN: Plus one thinking as you describe it is when you never revert to the earlier state. A powerful framework, in and of itself. In terms of that same plus one thinking, explain, what gaps you see as a technologist, in the current crisis? Can a migrant get a short term loan for a day, he should be able to, he or she…
VARMA: Let’s talk about lending. For example, access to capital. We talk about access to food, access to education, access to health care, but access to capital is like access to money. If you look at India’s spectrum of large businesses and top of the pyramid folks like us, our access to money is so easy, at a much lower rate. That means we get in almost like a 9% a 10% whatever India’s rates, and then you get a large amount of capital. So the system is interestingly set up to offer large products, large quantum of lending, with a large amount of cost to do background verification and paperwork and all that. Because I’m lending you let’s say $100,000, my ability to recover the costs through interest and long tenure 15 years and so on, right? Nobody wants to give you $100 loan for two days. It doesn’t even make sense to banks. If you unbundle that and ask that why is that set up in India is that almost everyone else goes to a local moneylender. Local moneylenders fleece them. So, it’s not affordable. There’s no accessibility, that means you’re left with one guy — end of the road. And they have no choice to go anywhere else right because they’re not going to the bank. So, if you unbundle, you realize this is primarily due to three things — cost of sale, cost of acquiring the customer, cost of servicing the customer, collecting the check, collecting the paper coming back and reminding you and doing the final collection. And the third is inability to verify your data and claims. Let’s say you are a small roadside trader in India, and you probably are doing, you know, $1000 dollars worth of goods every month or $2000, and then you’re looking for a five day bridge capital access before they get the payment back from their customers or whatever, a small amount. And let’s say $1000 you’re asking for. You’re walking into a bank. Imagine that scenario, and the bank is saying, Who are you? And then saying how do I know that you are a local trader? Then you are saying that I make thousand dollars, $2,000 a month, how do I know? I have family, I have an average savings. How do I know? Every claim they make is in unverifiable. So the inability to verify claim, and the cost of processing, the cost of paperwork is almost prohibitive to even go back to this customer base. So they’re completely left out of the system. So, when you unbundle this, you realise that you have to reduce the cost of doing business dramatically. That’s when India Stack — paperless, presence less idea came out. Instead of $50 or $100 KYC cost, can you make it $1 — dramatic, order of two, can you reduce? On the other side, provide attestation, credits and data back to the individual, so that they can make verifiable claims. That means you can make a claim that you have an average balance of $500, without any paperwork. And that’s exactly what India did. Two parts — reduce cost of doing business and cost of servicing and other side and reduce the cost of trust, which is verifying the claims, attestation, credentials, data certificates…I’m a B. Tech degree holder — how do you know? So it’s very important that we had tackled that, and that’s exactly what we are doing through this Stack approach and once we do this, suddenly, within the same manageable-viable cost, I am able to lend $1,000 for five days instead of $100,000 for five years.
NN: You talk often about Rajni, a vegetable vendor persona. I’m adding a few more visual markers (below) for my next question. Take a look at these people, what is the next layer of digital infrastructure that needs to be built before the next crisis hits…without fluffy features — so that these people don’t have to go through what they did this time…
VARMA: Comes back to…Does work need to be done at a workplace? Does learning need to be done in a school? Does banking need to be done in a bank branch? Thankfully, India had taken many steps, but not enough, ever not enough for a billion people, to cater to their aspirations but nevertheless. For example, India Postal Bank allowed banking at your doorstep and the postman walking around today, with an Aadhaar enabled device. Interestingly, when the lock in happened, in April and May the Aadhaar enabled payment system literally doubled his transactions, really telling us that these are the people using their fingerprint to do banking literally doubled when the lockdown happened. That means someone around the country, 400 million transactions around the country, in one month got done in front of their houses right just using their fingers, no phones no feature phones, not smart phones, no internet, but because the postman is knocking the door and say, yes, you can. These are not like $100,000 it’s like $10, $5. Accessing banking, doesn’t mean bank branch. Virtualization of physical is a very important learning that we went through right now. Almost everything, we think physical — physical places, physical paper. That’s how historically humanity has built up stuff, right, we go to work, we go to do things like this. I think that was fundamentally questioned when this COVID crisis hit saying it’s time for us to virtualize. Banking without bank branch and education without being physically present in school. (This) doesn’t mean it won’t go back but at least gives us the resilience that you alluded to earlier, saying that when something happens — it doesn’t have to be COVID, it can be a Chennai flood. Can Chennai as a city be resilient? Reslience requires flexibility. You know flexibility requires multiple options to be enabled, but advantage of being resilience is not only can deal with crisis, it also becomes inclusive. Not everybody likes going to the bank branch. AC rooms, people…I don’t think I’m even welcome there, they feel uncomfortable being there, right, because we created that scenario. They prefer banking, with a postman right in front of their house than ever going to the bank branch and dealing with somebody who speaks a language they don’t understand. This is a very good learning and this also goes back to the second point. One is virtualization which is a very key part of this, and also brings inclusivity. The second part is Plus One thinking.
What is +1 for them is more important than what is +1 for us. What do they already do? What are their visual imaginations? What is that one thing you can do, from which they will say, Aha, I never feel like going back to the previous equilibrium so you’re moving to a better equilibrium and I am never really going back. Now they will say, Oh, I got it, and I like it and it’s one thing I can do.
So we always have to analyze the actual target audience when you, say, give education for a child. What is their parents’ +1, what is the context, they live in and they work in, and they grow up in and and what is +1 for them. The beauty of +1 thinking is that you can do at-scale shifts, without actually ever going back. Introduction of mobile phone was all Plus One, right? In one sense, you can never un-use it now. The world will not tell you that we don’t need internet. No, can’t do it. You can’t imagine it.
NN: Often what happens is that we imagine that for them. Their plus one and our imagined plus one does not intersect. In the case of Aadhaar, you did not try to solve…you created that digital identity so that people can answer to a simple question, who are they? How do you do need finding in these situations for these people.
VARMA: What if they don’t even have to tell us. So, I’m pushing the boundary. I think you answered yourself, in one sense. I think the idea of digital infrastructure, which is the topic of sort of the discussion, is to distribute the ability to solve, and not solve it for them. Because if we know that this is their solution, we are almost always wrong. Guaranteed! We are sitting in a cozy place in Bangalore and imagining, Oh, that’s how the guys in UP, guys in Bihar will (inaudible). We are almost always wrong. Okay, so, the way we think about it, is that what is the building block that we can provide, the chassis of the car, so that the local community, whether done by a private entrepreneur, or done by an NGO, done by a community member, they get to compose that into a solution that works for them. Almost always, if you build a centrally built solution — distributed never works at scale for a population with the diversity of India. That is why infrastructure thinking is very key. Digital infrastructure is not about solving, it is about…. we can really ask questions and imagine, what you are imagining is only to unbundle, not to actually build the solution. Okay you heard that, you interview, you do the usual user studies, persona mapping, you understand these are possibilities. But you be humble, saying I don’t know how it’s gonna work. I don’t know what is even right for them. So what are the key components that I can unbundle, and make it open, available to them, so that some NGO or an entrepreneur in say, Chidambaram, working with a bunch of women who are homemakers can create some entrepreneurial solution for them. Not somebody in Bangalore sitting, trying to solve that for them.
NN: Take a look at this picture now (below). Nizamuddin Bridge, New Delhi. I spoke with the photographer who took the picture and got to know the story, the man’s son was unwell, in another city in another town. He’s probably low on cash, and even food, he’s using a feature phone, we can see from the picture, a Chhotu Jio phone it looks like… Tell me about building for this persona?
VARMA: If you put all this together into a problem, then we will start crying and then we don’t know what to do. And this is not one person, there are 100 million people, 50 million people; what do you do. We will be overwhelmed. But think about each of them — access to money. Imagine if he had the identity that he came prove, and a bank account he can prove and access to credit he can prove and get a small sachet of money, whether it’s government money or not, any post office anywhere in the country. Access and affordability — solve on the financial side. Similarly, we have been arguing for portability of PDS — food distribution. In fact, Nandan (Nilekani) had explicitly recommended with Aadhaar, you can actually port anywhere, it doesn’t matter. You can’t double dip, you only have one identity. So how does it matter whether a Bihar person is in Tamil Nadu, it’s your right. If you’re entitled to food, you should get food anywhere. Now finally with COVID, they have all woken up and they said, yeah let’s make PDS available. They could have accessed food on any of the shops, as they go. Similarly healthcare — access to care. Look at the doctor (mafia? inaudible), doctor to patient ratio, it’s horrendous in India, right? Our access to primary care is almost gone. What do we do about the care? Unbundle the access problem first, unbundle the affordability problem — second. And if you unbundle these two, you’ll realise you can dramatically increase the access and affordability. And when you get that done, it takes about a decade before that abundance happens. Okay. It takes a decade and you have to be patient about it. Until then, you can only do patches.
Permanent solution is to actually look at access angle, affordance angle and choice angle for each of the sectors and say how can we dramatically reduce the cost and dramatically increase access and affordability.
And if you do that, you will start saying that, yes, we can solve a bunch of things, not everything. Common things that you and I take care of… Even we have problems but I’m saying that a lot of things we take for granted, those things they should also get, right? It’s a no brainer.
About the author | Nikhila Natarajan (Niki) is Consulting Ed, US, at Indo Asian News Service & Fellow, Observer Research Foundation. She works best at the intersection of digital newsroom strategy, technology and communications. An MS in integrated marketing communications from Northwestern University, Nikhila is currently accepting gig work. Email: nikhilanatarajan@gmail.com or reach out on Twitter @byniknat
