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Building Digital Rails for Urban India – Why We Invested in eGovernments Foundation

2nd February 2022
Building Digital Rails for Urban India – Why We Invested in eGovernments Foundation
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Setup in 2003, eGovernments Foundation aims to catalyse urban transformation and enhance ease of living and ease of doing business at a national scale. To that end, it builds and deploys DIGIT, a National Open Digital Ecosystem (NODE) in cities across India. The platform helps digitize and automate back-end processes and enables citizens to access government services on their mobile phones.

Digitizing Back-end Processes 

Accessing Government Services on Mobile Phones

We first partnered with eGovernments Foundation in 2016. Here is a screenshot of our internal investment memo that best captures why we had partnered with them, and what our bet really was –  

In other words, our belief was that DIGIT would be a technology backbone that would enhance the efficiency of the city’s operations and thus bolster scarce state capacity. We also believed that it would enhance revenue collections and thus further build the ability of local governments to deliver services to citizens. Finally, we also saw the platform playing a role in holding governments accountable through enhanced transparency of service levels,

What has happened since our first investment

So, how well has our thesis played out? What’s been eGovernments Foundation’s impact? Has it succeeded? On what fronts? The much-overused phrase “impact at scale” is the only way to describe what the organization has achieved over the past five years:

eGov is now deploying the platform in 2,421 cities (653 live, 1858 in implementation) across 14 states, impacting over 160M Indian citizens. Municipal staff using the platform report dramatic increases in their ability to service citizen requests and savings of close to 19 hours each week because of simplified and redesigned workflows. This has enabled the cities to service citizen requests faster – in Andhra Pradesh grievance redressal time has reduced from 24 days to 5 days even as the number of grievances submitted by citizens has grown by 3x between 2016-17 and 2019-20.  Further, DIGIT has enabled over $2.5 billion in revenue collections – In Andhra Pradesh, property tax collections have increased by 70% from ~ $100M to ~ $170M in just three years (between 2016-17 and 2018-19). 

The positive impact of the platform is evidenced by the fact that over 96% of municipal employees reported an improvement in their quality of work and 74% of citizens reported increased access to the government. 

What have we learnt:

This has been one of those investments that delivers on practically every dimension of our thesis and has done so at a staggering scale. As we reflect on this journey, this is what we have learnt:

  • National Government Buy-In: Engagement with MoHUA at the national level to establish the National Urban Innovation Stack (NUIS) has helped evangelize the platform with states, cities and development organizations, and has led to increased adoption of the platform. Continued partnership with and engagement with MoHUA will be critical to sustaining the program.
  • Reduce Frictions: Proprietary products are hard to scale, especially when there are significant challenges on the demand side to pay (in this case the government). Making it open-source has made it easier for the government to build out this platform in a seamless and collaborative manner.
  • Collaborate: The one thing about driving change at-scale is no one organization however great can do this. The organization’s ‘ecosystem enablement’ approach, wherein it works with multiple partners has enabled it to scale the platform with minimal increase in the size of the team. Going forward, the organization will continue to explore partnerships on the technology and implementation front for sustained impact. 
  • Nimble Innovation: eGov has responded in a nimble way to the pandemic and has expanded its work beyond urban governance. A few months ago, the government announced that over 1 billion COVID vaccine certificates had been issued on the government’s vaccination portal COWIN using eGov’s DIVOC software. DIVOC is a modular digital platform that enables countries to manage large-scale rollouts of last-mile vaccine administration programs. It has made carrying and storing a vaccine certificate convenient for millions by allowing for digitally signed and offline verifiable certificates using QR code technology. DIVOC has shown how open source software can be leveraged to build solutions not just for India but also the world. Apart from India, DIVOC is now being utilised in Philippines and Sri Lanka,  and more countries in the APAC and Africa regions are in the final stages of testing.

Why we continue to be invested:

Over the last three years, eGovernments Foundation has continued to attract some of the best tech talent, despite competition from for-profit organizations that can afford to pay significantly more, collaborates seamlessly with governments at all levels from the municipal to the central, and partners effectively with CSO and non-profits as well as the private sector partners to scale its mission.

So – what next? Where do we go from here? In June 2020, our investment committee approved a grant to support the organization through the next phase of our journey.

We see the next phase through three words – institutionalization, ecosystem collaboration and depth.

  1. Deepen Partnership-Driven Model: Starting in 2018, eGovernments Foundation has been depending on public and private sector partners to co-own, improve, customize, deploy and service the platform across multiple cities. This will continue to be the focus going forward as well.
  1. Depth of impact: Aapti Institute’s recent report on social intermediaries shows that technology has its limitations and that we need to build and engage ‘offline architectures’ or intermediaries (e.g. community based organizations, local politicians etc.) to ensure last mile delivery happens and the most disenfranchised citizens are able to get the benefits of the platform. This will be a big area for the organization going forward to ensure that the benefits of the platform are truly received by the most excluded citizens in each city, the Next Half Billion.
  1. Institutionalisation: As the platform has come to become a critical part of India’s urban service delivery infrastructure, the Ministry of Housing & Urban Affairs (MoHUA) have adopted the open-source code to build the National Urban Governance Platform (NUGP). The Centre for Digital Governance (CDG) at NIUA will now work with states and cities under the aegis of the National Urban Digital Mission to handhold them in adopting the platform, identifying suitable implementation partners as well as build capacity. It will integrate various municipal services on a common platform so that all states/cities may use customisable solutions to address their needs at speed and scale. To begin with, it will have a bouquet of 9 reference applications like property tax, birth and death registration, water and sewerage, building permissions etc. This is a major step forward in enabling delivery of easy to access and transparent services to all citizens across 4,700+ cities/towns in India.

It is clear that eGovernments Foundation will continue to play a critical role in improving the lives of urban citizens in the decades to come, and that is why we continue to be invested.