Time to use direct benefit transfer infra for climate action payments: Nandan Nilekani

Nandan Nilekani, co-founder and chairman of Infosys

Aadhaar architect and Infosys co-founder Nandan Nilekani has called for utilising India’s Direct Benefit Transfer (DBT) infrastructure to drive climate action payments. Nilekani’s comments come a month after he revealed his latest initiative, which focuses on a new architecture for electricity transactions primarily involving renewable energy sources.

“India has the largest Direct Benefit Transfer infrastructure in the world, and it is time to reuse this for climate action payment,” he said while speaking at the Beckn Node Zero event in Bengaluru. The event was organised by the Foundation for Interoperability in Digital Economy (FIDE) along with Sattva Knowledge Institute.

He highlighted India’s track record in deploying complex digital infrastructure at scale, suggesting that DBT could incentivise climate-friendly behavior.

The world has moved to execution mode in tackling the global climate crisis, and Nilekani urged India to step up efforts for the same. “Climate is time bound, and we need to act with exponential scale and pace.”

On September 13, describing the modus operandi of the infrastructure, Nilekani explained: “Tomorrow, every home will have a battery or a four-wheeler battery, a rooftop solar, and they'll buy power in the daytime, when it's cheap, and sell it at night when it's expensive.”

Also read: Working on a different architecture for electricity transactions, says Nandan Nilekani

India has dealt with complexity at scale and speed with digital infrastructure and is ready to solve problems for the world by harnessing existing digital infrastructure to layer new solutions, he added.

“We believe that the idea of Beckn, which is decentralised transactions infrastructure and the idea of Finternet, which is decentralised assets infrastructure, can come together. We have the technology, capability, and the ability to make this work and will see examples of this in the coming year,” Nilekani said.

According to him, Finternet is a user-centric, unified, and universal approach to finance, aiming to bring together diverse asset classes such as registered land, regulated financial products, and even artwork. These assets can be tokenized and accessed over a secure, regulated universal infrastructure.

Nilekani is backing the open-source Beckn protocol, which provides specifications including APIs, data models, reference architecture, transaction mechanisms, and global standards. The Beckn protocol is the underlying open and interoperable protocol for India's Open Network for Digital Commerce (ONDC) and the Namma Yatri ride-hailing service app, which are example of decentralised digital networks.

Pointing towards the vast amount of data available to predict extreme events, Nilekani brought to attention that accessibility is the issue, which is a result of high coordination costs. “This can be solved by open networks, which will bring down the cost of coordination,” he suggested.

Nilekani line of thought was backed by Pramod Varma, former chief architect of India's digital identity programme Aadhaar.

Varma said that while open networks offer transparency and collaboration, they require “dramatically reducing the cost of coordination.” Varma, who is also the chief technology officer of the Nandan Nilekani-backed EkStep Foundation, called for a shift to “user-centric architecture” to cut through bureaucratic delays and accelerate impact.

Open networks can transform climate action by enhancing collaboration, transparency, and efficiency, addressing the impact of daily activities on climate change and incorporating nature's value into economic growth, Varma noted. To tackle this complex challenge, we must shift our mindset towards a sustainable economy.

Both Nilekani and Varma are also cofounders of the not-for-profit FIDE, which promotes innovation and collaboration among ecosystem participants by creating interoperable open protocol specifications as a public good.