Achieving Equitable Growth – An Assessment of the Impact of Digital Public Infrastructure on Informal Workers in India

Abstract

In this paper, I examine the extent to which Digital Public Infrastructure (DPI)-digital systems that provide identity, enable payments, facilitate the delivery of population-scale services by public and private actors- has improved the living standards of informal workers in India by explaining the historical challenges such workers faced like a lack of identification, wage exploitation, and inequitable access to social benefits. Through initiatives like Aadhaar, DPI has reduced income and access leakages, improved the targeting and delivery of subsidies, and expanded access to essential services- partially overcoming the Efficiency-Equity trade-offs inherent in the Second Theorem of Welfare Economics. I also highlight concerns about DPI relating to data privacy and information misuse for political or personal gain. While DPI has proven effective in reducing corruption and improving benefits distribution, further measures are necessary to address structural inequalities and protect informal workers from continued exploitation. Future policy directions should be focused on enhancing income opportunities and addressing information asymmetries to ensure sustainable improvements in living standards.