In my very first article of 2022, I predicted that this would be a busy year in India for tech policy. I was basing my prediction on the progress that had been made by then on our draft privacy law. Since the Joint Parliamentary Committee (JPC) had finally submitted its draft, it seemed inevitable that the bill was well on its way to becoming a law. I saw the immediate next steps as being crucial—the establishment of a Data Protection Authority, the creation of rules, regulations and codes of practice, and the daunting task of orienting commercial practice around a new culture of compliance. Which is why I was sure that the year was going to be busy.
I was also bullish on tech-sector reform. Given the liberalization we had witnessed in telecom, the opening up of the drone sector and the radical shift in our approach to map regulation, I was confident that we were going to see a lot more where that came from. There was more to be done, and, given the government’s appetite for tech reform, I was sure we would see new areas open up.
But I was most bullish on India’s digital public infrastructure and how it was going to develop over the course of the year. Things had built steadily up to that point and I was convinced we stood at the threshold of radical growth.
As I sit down to write my final article of 2022, I think it is safe to say that my overall prediction came true, though not for the reasons I had anticipated.
To start with, the JPC draft of the data protection law never made it to the floor of Indian Parliament. It was instead withdrawn and a new simpler version proposed. While this appeared to many to be a step back, I actually prefer the simplicity of the new version. I have long believed that this was what we needed at this stage of the development of our privacy jurisprudence.
We didn’t really see much in the way of tech-sector reform along the lines of the drone and map reforms that took place in 2021. Instead, the government set about undertaking a massive overhaul of the 137-year-old Indian Telegraph Act, aiming to replace it with modern regulation that brought many compliance obligations that had so far been imposed through licences into the main body of such legislation. Consultations on the new telecom law have been concluded and we are awaiting the newly revised version that will be tabled before Parliament.
Throughout the course of 2022, there was talk of a rumoured third legislation aimed at rounding out the troika of laws that would apply to regulate the digital space, but till the time of writing this, there has been no sign of even an early draft of the Digital India Act.
Be that as it may, based on the two laws that are already in the public domain, it is clear that the new regulatory framework, once in place, will radically alter the way in which digital businesses are regulated in the country. At the heart of this new regulatory design is the idea that simple, principle-based laws must lay down the broad parameters by which the sector will be governed. This, in turn, needs to be augmented by strong regulatory capabilities in order to ensure agile governance.
I have long believed that this is the only way to regulate fast-moving technologies and I am glad to see the government take important first steps in this direction. What remains to be seen is the sort of regulator that is appointed and the amount of autonomy it is given to operate.
But what was most exciting to witness over the course of the year was the evolution of India’s digital public infrastructure. Today, India’s fast payments system, UPI, clocks in excess of 7 billion transactions per month and is ubiquitous across the length and breadth of the country. As a result, people across a wide cross-section of society have easy access to affordable and efficient digital payment systems, allowing them to transfer money among themselves and engage in all manner of commercial activities. But, as impressive as all the success of UPI is, the really exciting story is one level up the digital stack.
Just 11 months after its launch, over 1.1 billion accounts have been enabled on the Account Aggregator ecosystem. As many as 78 entities registered and regulated by one or the other of our four financial-sector regulators are live and actively using its consent-driven data-sharing workflow to process over 3 million data transfer requests. This has resulted in as much as ₹17 billion worth of loans being disbursed, more than 50% of which have been granted to MSMEs at an average ticket size of just ₹400,000, which suggests that they are going to businesses that really need them.
But what is most heartening to see is the excitement with which India’s digital public infrastructure is being examined around the world. Across a number of fora and in countries around the world, there is growing interest in understanding how India has managed to build such a robust infrastructure and seeing how lessons from the India experience can be applied more broadly to other use cases.
This is particularly relevant considering that for most of 2023, India will be President of the G20 and have the ability to set the agenda on a number of key conversations between influential nations. This will be an interesting opportunity to showcase India’s techno-legal approach to regulation and I look forward to seeing whether it will result in more widespread adoption of these principles in the coming years.
Rahul Matthan is a partner at Trilegal and also has a podcast by the name Ex Machina. His Twitter handle is @matthan
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