Digital Economy and the Challenges for Data Protection
The Digital Personal Data Protection Act 2023 has introduced a concept of Data Fiduciaries who process data and their obligations towards the person to whom the data relates. — Dr. Dhanpat Ram Agarwal
Digital India program was launched by Modi Government on July 1, 2015 in order to integrate and implement in a synchronised manner, the various programs and schemes of different departments in order to bring a transformative change for e-governance and for ease of doing business in the country. Initially it started with linking the Aadhar card, the Jan dhan bank account with the mobile phones under a scheme popularly known as JAM. It facilitated direct benefit transfer (DBT) to the beneficiaries bank account directly without involvement of any intermediary and has been rated very successful for PM Kishan and various other central government’s schemes to the poor people in remote villages. The Central Government has created high speed Internet facility for telecom connectivity and it has resulted in more than 1.2 Billion mobile phone users in the country and over 600 million of them use smartphones. This digital India initiative has resulted into Universal Digital Literacy in the country and now there is access to digital resources for education, health, banking and insurance services apart from several other consumer related services for transport, retail trade and many others.
We are living in the era of knowledge and technology. Digital economy is growing and its total share in the global economy is estimated to be around 25% of the global economy by 2030. The brick and mortar retail business is gradually shading its share in favour of e-commerce which has increased from 7.5% in 2015 to 22% in 2023 (Please see chart).
Much of the e-commerce growth is attributable to Amazon which accounted for 37.7% of on line sales of US in 2019. China’s Alibaba is also another e-commerce global player. India’s core digital economy share in the Gross Value Addition (GVA) increased from 5.4% in 2014 to 8.5% in 2019 and the digitally dependent economy account for an estimated 22% of India’s GDP in 2019 as per a recent study of E&Y a global consultancy group.The strong digital infrastructure created by Government of India, coupled with wide-scale adoption of Unified Payment Interface (UPI) or digital payment. India has topped the list for digital payments and recorded 89.5 million transactions in 2022 according to a report as published in Times of India on June 12, 2023. Brazil is second on the list accounting for 29.3 million and followed by China with 17.6 million transactions. According to the data provided by MyGovIndia, the citizen engagement platform of Government of India, 46% of all real-time payments made worldwide in 2022 were made in India which is highest in the world.
However the Retail Traders are facing a challenge with many retail shops closing down as online platform such as Amazon and Flipcart are charging huge commission from retailers. Government of India has acted promptly and has created a wholly national platform ONDC, Online Network for Digital Commerce which can cater to the needs of online business by all the different agencies providing network for sellers, buyers, logistics, payment gateways under one umbrella. It works like the Airport Authorities of India which is open for use by all the airlines and support services without any discrimination to foreign or domestic service providers. There is a need for awareness about ONDC which is a section 8 company, an autonomous body with no profit objectives.
NPCI or The National Payments Corporation of India is the key organisation set up by Reserve Bank of India as a section 8 company to enable e-payment under the umbrella of UPI.
Thus, UPI, Aadhar, ONDC and the Robust Internet infrastructure for mobile phones are the most important elements of e-connectivity for creating Digital India for the financial inclusion and for improving the digital economy in India. The digital currency would be the next step which is now under trial with limited wholesale interface limited with select banks. The Digital Rupee was proposed in January 2017 and launched on 1 December 2022 and is symbolised as eINR.
In order to regulate the digital economy and the digital transactions and in order to protect the data from cyber piracy, Government of India has replaced the old Information Technology Act 2000 by Digital India Act 2023 and has also enacted a new law for personal data protection which is Digital Personal Data Protection Act 2023.The objective of the newly enacted Digital India Act is to remove the limitations of 23 years old Information Technology Act 2000 as the information technology has moved to a much higher level of 5G, artificial intelligence including Internet of things or IOTs, cloud computing, meta verse, blockchain and cryptocurrencies.
The Digital Personal Data Protection Act 2023 has introduced a concept of Data Fiduciaries who process data and their obligations towards the person to whom the data relates. It is based on seven basic principles of lawful and transparent use of personal data, limiting the use of the data only for the purposes specified while collecting the same, to ensure accuracy and to store the data only for limited period and thereafter for its deletion and ensuring security safeguards on the principles of accountability.
In conclusion it can be said that the present Government is fully aware about the importance of digital economy and the opportunity available to Indian Startup’s for the potential growth as have been achieved by Google, Facebook, Amazon and several other Digital based top companies around the world and at the same time there is a need for data protection as the data are most valuable currency for success in any business and for achieving any social or economic goal.
Dr. Dhanpat Ram Agarwal: Director, Swadeshi Research Institute and National Co-Convenor, SJM.
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