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Regulation of the Digital Ecosystem in India

  • Category
    Polity & Governance
  • Published
    21st Oct, 2022

Context

Despite several transformative progresses made in the digital payment sphere, it is continuing amid a sea of regulatory uncertainty. Rapid adoption has thrown up the new policy in regulatory challenges.

About

Why digital ecosystem is on rise?

  • Increased penetration of smartphones
  • Coronavirus pandemic has further accelerated the process of digital inclusion
  • Adoption of Time-Saving Products and Services
  • Growing Interest in Customized Products

Digital ecosystem: Social media platforms, OTT platforms, online apps, metaverse and blockchain.

How digital ecosystem is changing India?

  • Jan-Dhan-Aadhaar-Mobile (JAM) trinity: Ensuring delivery of government schemes to its beneficiaries without leakage or misuse.
  • SVAMITVA Yojana: Provided digital land records to the rightful owners by leveraging the power of drones and GIS technologies.
  • Bharat Net: provided high-speed broadband to all the village.
  • Common Service Centers (CSCs):  offering banking, insurance, state and central government services, passport and PAN card services, digital literacy, rural eCommerce services and pre-litigation advice etc.
  • Digital payments revolution: UPI and Aadhaar-Enabled Payment Systems (AEPS), AEPS-based micro-ATM at CSCs and post offices.

How this growth is posing challenges?

  • It raises the need of reasonable safeguards for an inclusive and stable ecosystem.
  • Issues arises such as consumer and data protection, privacy, payment safety, etc.

Recent Government measures for regulating the sector:

  • In 2022 itself, the Ministry of Electronics and Information Technology (MeitY) has announced the
    • draft amendment to the IT Rules 2021 (June 2022)
    • the draft India Data Accessibility and Use Policy (February 2022)
    • National Data Governance Framework Policy (May 2022)
    • the New cyber security directions (April 2022)
  • India is also working on a complete overhaul of its technology policies and is expected to soon come out with a replacement of its IT Act, 2000, which is expected to look at ensuring net neutrality and algorithmic accountability of social media platforms, among other things.

Required Interventions:

  • A co-regulation model with components of a statutory oversight body, industry-led self-governance and multi-tiered grievance redressal mechanisms. 
  • Encouraging innovation and limiting unintended negative consensus.
  • Amendments in existing laws as well as allocation of business across ministries. 

The Trendsetters:

  • Digital Services Act (DSA): The European Union (EU) has given final approval to online safety-focused legislation, which is an overhaul of the region’s social media and e-commerce rules.
  • US and Australia, also catching up: The US and Australian initiatives are still brewing, as are those in several other parts of the world. The principles of regulation are mostly aligned, reflecting their unease with the inconceivable growth and influence of Big Tech.
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