India's Digital Dream, Stalled

There was a moment, roughly a decade ago, when India’s digital future seemed inevitable. At the heart of this vision was Aadhaar, perhaps the most ambitious civilian technological project ever attempted. To give a billion-plus people a secure, verifiable digital identity was a staggering feat of engineering and logistics. It was a bold answer to a fundamental question: in a vast and diverse country, how does the state reliably know its people? Aadhaar became the bedrock of the “India Stack,” a set of open APIs and digital public goods that aimed to unlock a new era of innovation and inclusion [1]. Hailed from Silicon Valley to Singapore, the promise was a frictionless, transparent, and efficient interface between the citizen and the state. We were, it appeared, ahead of the curve.

From its very onset, however, this ambitious push ran into profound philosophical debates about its use and implementation. Civil liberties activists raised legitimate alarms about privacy and the potential for a surveillance state, and legal scholars questioned Aadhaar’s constitutional validity. For years, while other nations silently built their digital futures, prioritizing delivery over debate, India’s progress was stalled by this high-stakes democratic reckoning: the imperative of efficiency versus the sanctity of privacy.

Today, that initial vision seems to have died a death by a thousand cuts. The regulatory state has fought back, and even Aadhaar itself, the very foundation of this digital dream, is being degraded. We are now left with a patchwork of half-baked portals, a citizenry frustrated by the illusion of digitization, and a corporate sector mired in digital quicksand. India, once a pioneer, is now being lapped by nations from the Netherlands to even Saudi Arabia.

The Shining Promise and The Patchwork Reality

To understand the scale of the failure, one must first acknowledge the breathtaking success of specific parts of the GovTech vision, particularly at the central level. The India Stack, especially the Unified Payments Interface (UPI), has been a revolutionary force. By creating a public digital payments infrastructure, it democratized finance in an unprecedented way. Coupled with Aadhaar-based e-KYC, it enabled the opening of over 56 crore (560 million) bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY), bringing a vast informal economy into the formal financial fold [2].The statistics are staggering. In December 2025, UPI recorded over 21.6 billion transactions [3].

Another resounding success is FASTag, which has achieved a penetration rate of approximately 98% with over 80 million users, revolutionizing electronic toll collection on national highways [4]. These systems work because they are transactional, federally driven, and solve a single, clear problem with a well-defined API-based architecture.

However, the picture becomes more complex with initiatives like DigiYatra. Designed to offer a seamless, paperless travel experience at airports using facial recognition, it represents a more ambitious, process-oriented goal. While promising, its rollout has been a mixed bag, facing challenges in adoption, inconsistent implementation across airports, and occasional technical glitches that erode user trust [5].

Beyond these high-profile projects, the broader dream of a paperless, efficient state remains largely unrealized. DigiLocker, despite issuing over 5.6 billion documents, has a user base that pales in comparison to UPI’s reach [6]. Ambitious projects to digitize land and health records are fragmented and stalled, likely caught in the quagmire of state-level bureaucracy.

The Federal-State Disconnect: A Case Study

The starkest evidence of this disconnect is not in macro-data, but in the micro-experiences of citizens. My own recent ordeal to obtain a housing NOC from the Mapusa Town Planning office in Goa is a perfect allegory for India’s GovTech tragedy. The process begins digitally, as it should. But this was merely an illusion. The digital submission was not a ticket to efficiency, but a digital postbox. To ensure the file was even viewed, a physical trip to the office was mandatory.

What I found there was a scene straight out of the pre-Aadhaar era: touts and developers clutching thick folders, clustered around officials’ desks, their conversations a low hum of negotiation. The system was not running on code, but on clout. This experience reveals the core of the problem: a deep gap in India’s ability to execute consistently across different levels of government. State governments, in particular, often lack the capacity and will to push for transparency and sophistication in citizen services. While the Centre has built sophisticated digital highways like the India Stack, the last mile - the actual point of interaction for most citizens - is a broken road controlled by state and municipal bodies. It is at this level, where the machinery of government directly touches daily life, that the digital dream truly falls apart.

This is the reality for millions. As Peter Thiel has noted, “Bureaucratic hierarchies move slowly, and entrenched interests shy away from risk” [7]. The digitization of a form without the re-engineering of the underlying state-level process doesn’t reduce corruption; it just creates a digital facade for the same old inefficiencies.

The International Contrast: A Glimpse of What Could Have Been

Over the last few years, I have worked in countries like the Netherlands, the UAE, and Saudi Arabia, and these are all benchmarks we are now failing to meet. This was not the future we had envisaged a decade ago. Consider a few examples of global digitization:

• Estonia: A global leader. An Estonian can start a company online in 15 minutes and file taxes in under five [8]. Their X-Road system ensures secure data exchange across all public and private sectors [9].

• The Netherlands: The DigiD system provides a single, secure digital identity for residents to interact with all government agencies, simplifying everything from taxes to healthcare [10].

• Saudi Arabia and the UAE: These nations have used a top-down mandate to achieve stunning digital transformation. In the UAE, over 90% of federal government services are online [11], and Saudi Arabia’s Absher platform allows citizens to manage a vast array of services from a single dashboard [12].

India, with its world-class tech talent, should be in this league. That we are not is a failure of governance and imagination.

Back to the Drawing Board

Fixing this requires a revised approach. If you are building in this space and rethinking how citizens interact with the state we at Untitled Ventures would love to chat. We believe the future of GovTech will only be promising if it is citizen-centric, built around life events rather than government silos, prioritizes UX/UI, and embraces open APIs. The promise of GovTech was about more than convenience: it was about redefining citizenship, fostering trust, and unleashing economic potential. The vision was not wrong, but its execution has been incomplete. Finishing the job is the real test of our digital ambition.

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References

[1] India Stack. (n.d.). India Stack. Retrieved from https://indiastack.org/

[2] Ministry of Finance, Government of India. (2025, August 27). 11 Years of PM Jan Dhan Yojana: Banking the Unbanked. Press Information Bureau. Retrieved from https://pib.gov.in/PressNoteDetails.aspx?NoteId=155102&ModuleId=3&reg=3&lang=2

[3] The Economic Times. (2026, January 5). UPI hits record 21.6 billion transactions in December. Retrieved from https://bfsi.economictimes.indiatimes.com/articles/upi-sets-record-with-216-billion-transactions-in-december-2025/126284623

[4] Press Information Bureau. (2025, November 11). Press Note Details. Retrieved from https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155978&ModuleId=3&reg=3&lang=1

[5] Business World. (2025, November 7). Digi Yatra CEO Says AI Boosting Convenience, Adoption Still Lagging. Retrieved from https://www.businessworld.in/article/digi-yatra-ceo-says-ai-boosting-convenience-adoption-still-lagging-578762

[6] DigiLocker. (2023, March 16). 15 Crore and Counting: DigiLocker Leads the Charge in India’s Digital Revolution. DigiLocker Blog. Retrieved from https://blog.digilocker.gov.in/15-crore-and-counting-digilocker-leads-the-charge-in-indias-digital-revolution/

[7] Goodreads. (n.d.). Peter Thiel Quotes. Retrieved from https://www.goodreads.com/quotes/7510122-bureaucratic-hierarchies-move-slowly-and-entrenched-interests-shy-away-from

[8] e-Estonia. (n.d.). e-Business Register. Retrieved from https://e-estonia.com/solutions/ease_of_doing_business/e-business-register/

[9] e-Estonia. (n.d.). X-Road. Retrieved from https://e-estonia.com/solutions/interoperability-services/x-road/

[10] Digital Government Netherlands. (2025, May 23). DigiD. Retrieved from https://www.nldigitalgovernment.nl/overview/identity/digid/

[11] The Official Portal of the UAE Government. (2025, November 27). Bridging digital divide. Retrieved from https://u.ae/en/about-the-uae/digital-uae/digital-inclusion/bridging-digital-divide [12] Absher. (n.d.). Absher Portal. Retrieved from https://www.absher.sa/wps/portal/individuals/Home/homepublic/!ut/p/z1/04_Sj9CPykssy0xPLMnMz0vMAfIjo8zi3Q0NHT2M3A183N2DjAwCnR0Njc0dnQwtDE31w8EKDDxNTDwMTYy83Q3MjAwcw4IsTFw9TQ3dzUz0o0DSOICjAVQ_HgsI6o_CosTRwCnIyMnYwMDd3wirAhQzghOL9AtyQyMMskwUAaQuPfE!/dz/d5/L0lHSkovd0RNQUZrQUVnQSEhLzROVkUvZW4!/

[13] Tracxn. (2025, October 14). Top startups in GovTech in India. Retrieved from https://tracxn.com/d/explore/govtech-startups-in-india/__VRusmj0QMvz_sqACkHTKWOSf1Rj8xGjIpShA6JZr2gs/companies