India Aspires To Be $5 Trillion Digital Economy, Tech and Data Protection Guardrails 2023 Awaited

New Delhi, December 28 : As India aspires to become a $5 trillion digital economy, it needs sharper regulations to tame Big Tech from misusing their market dominance, while promoting local innovation and talent. Will 2023 finally deliver key bills on digital personal data protection and cryptocurrency?

Amid the pending bills are revised IT Rules, 2021 to tackle internet and social media intermediaries in order to create a safer experience for Indian users while protecting their privacy in mind, and rules on the regulation of online gaming as IT Ministry has now been made the nodal agency for matters related to online gaming. Ransomware Attack Like AIIMS May Increase in 2023, Indian Firms Need To Be More Vigilant.

The government in August withdrew the contentious Personal Data Protection (PDP) Bill that saw 81 amendments in the past three years, aiming to introduce a new bill that fits into the comprehensive legal framework and protects the data of billions of citizens. The new draft will allow cross-border transfer of some users' data with "certain notified countries and territories".

The new PDP bill has also proposed harsh penalties of as much as Rs 250 crore on people and companies that fail to prevent data breaches. The deadline for public consultation on the PDP bill is till January 2, according to Rajeev Chandrasekhar, Union Minister of State for Electronics and Information Technology. Data Breach: CERT-In Warns Indian Users Against Phishing Attacks via LastPass.

On cryptocurrency, the government in the last Budget had announced a 30 per cent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed.

In order to capture the transaction details, the Centre also levied TDS on payment made in relation to transfer of virtual digital assets at the rate of 1 per cent of such consideration above a monetary threshold.

Industry experts feel that since the taxation part is done, the upcoming Union Budget will create a regulatory framework for digital wallet companies. India currently has around 15 million cryptocurrency users.

According to Raj Karkara, COO, ZebPay, in 2022, the crypto industry witnessed landmark events including the Ethereum Merge Upgrade, the launch of Central Bank Digital Currency (CBDC) as well as the government's new crypto tax policy.

"In 2023, it will be the responsibility of all players in the crypto and Web3 ecosystem to foster a sense of security among its consumers. Putting in the right protocols and practices in place to avoid the impact of black swan events will be crucial to success," said Karkara.

The year ahead will weed out businesses with weaker models and practices. Sustainability and financial inclusion will be strong themes, promoting mass adoption of the asset class, he added.

In a written reply to a question in the Rajya Sabha earlier in December, Chandrasekhar had said there was no proposal to enact a separate law to regulate the digital media.

"To help achieve the aim of making the internet open, safe and trusted and accountable and to regulate the intermediaries, including social media intermediaries, and in exercise of powers conferred by the Information Technology Act, 2000, the Central government has made the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021," read the reply.

In case an intermediary is a significant social media intermediary (one having more than 50 lakh registered users in India), it needs to additionally observe diligence in terms of appointing a chief compliance officer, a nodal contact person for 24x7 coordination with law enforcement agencies and a resident grievance officer, publishing monthly compliance reports.

Chandrasekhar recently spoke about the compliance with law, rules and guardrails for all social media platforms in the country. Those guardrails are now the need of the hour.

(The above story first appeared on LatestLY on Dec 28, 2022 08:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).