Dear Reader,

It is with pleasure that we introduce you to Spotlight – a new, monthly publication by CUTS International. Spotlight brings you a snap analysis on topical policy issues of general interest, with the objective of keeping our readers informed and igniting conversation. We plan to cover a wide and cross-cutting range of subjects including competition law and policy, economic regulation, data governance, future of jobs, energy, and urban mobility, among others. The first edition of Spotlight gives a brief story of the ‘Ups & Downs in India’s Digital Transformation in the Last 5 Years’. We look forward to hearing your thoughts and suggestions.”

Ups & Downs in India’s Digital Transformation in the Last 5 Years

Recognising the potential of digital technologies in sustainable and inclusive growth, the Government of India (GoI) launched various initiatives in the technology sector, such as Digital India and Start-up India initiative, coupled with Make in India and Skill India, among many others. These received much fanfare from (domestic and foreign) digital technology service providers, as well as consumers, which was visible through rise in investments in the sector. Reports suggest that Digital India attracted more than 4 lakh crore investment and generated 18 lakh job opportunities at its launch, with higher levels of uptake, and promise of infrastructure upgrades in the country. This resulted in a push-start for India’s growth towards a transformation into a digitally-empowered society and knowledge economy. However, the country has also erred on various regulatory/policy fronts lately, which might have a negative impact on the digital growth.

CUTS Perspective
Due to initiatives and steps taken by the GoI since 2014, the technology boom in India resulted in various benefits for all stakeholders:

Consumers – improved quality of life, cost and time saving, choice, convenience, access to services at the last mile, etc;

Businesses – enhanced productivity and efficiency, access to larger domestic and international markets, lower cost of operations, etc;

Government – contributed towards the Sustainable Development Goals (SDGs), inclusive economic growth, e-Governance, transition to a knowledge economy, creation of jobs, etc.

However, various challenges also emerged as a by-product of digital technologies. Few prominent ones include: threat to national cyber-security, cyber-crimes, misinformation and fake news, privacy and data protection, competition concerns (first mover advantage and winner take most scenario) etc. (Details are available here.)

India’s regulatory response to these challenges has been a heavy handed one. Recent regulations/policies implemented and/or proposed, such as: Draft Personal Data Protection Bill 2018, Draft National eCommerce Policy 2019, Proposed Information Technology [Intermediaries Guidelines (Amendment) Rules] 2018 etc., are believed to be regressive and protectionist in nature. Though with the right objective, the path chosen to achieve them is arguably envisaged to bring more harm than good for the digital economy in India.

The Way Forward
With a new government about to be formed in India, it will be imperative for it to regain the lost momentum in India’s push towards a digital economy. Focus must be placed on the need for framing optimal regulations, i.e. ones which offer an enabling environment for the growth of digital technology. Principles of transparency and inclusivity must be upheld in regulatory decision making. Avoiding knee jerk reactions by adopting a regulatory sandbox approach, along with institutionalising tools, such as Regulatory Impact Assessment (RIA) or Cost-Benefit Analysis (CBA), would also be useful in ensuring that benefits emanating from regulations, outweigh the costs levied by them.

This will enable the country to maximise the potential benefits emanating from a digital economy in India, while safeguarding the interests of all stakeholders.