By Nandkumar Saravade, Former IPS officer, Founding CEO, ReBIT and the Co-founder, DeepStrat
India’s digital landscape is undergoing a profound transformation. India today has 830 million internet users and is the world’s largest “digitally connected democracy”. The advent of the Digital India Act (DIA) is set to play a pivotal role in shaping the nation’s digital future. While the DIA is poised to replace the Information Technology Act of 2000 (IT Act), it is imperative that this transition is a careful evolution rather than a disruptive overhaul of the existing regulatory framework. To guide the engines of our digital economy, the DIA will play a crucial role.
DIA should build on the IT Act and its notified regulations
DIA’s predecessor, the Information Technology (IT) Act, was enacted, over two decades ago, at the dawn of the new millennium. It has stood the test of time and, with timely tweaks, served India’s thriving digital ecosystem reasonably well. As we usher in the DIA, it is crucial to recognise and retain the strengths and effective aspects of the IT Act. Rather than starting from scratch, the DIA should aim to build on the existing rules and regulations, allowing for a seamless transition.
This approach offers multiple benefits. First and foremost, it ensures stability and continuity for businesses that have been operating under the provisions of the IT Act. A sudden and complete overhaul of the regulatory framework could lead to confusion, legal challenges, compliance difficulties and potential disruptions in the digital ecosystem. Subsuming the IT Act’s rules into the DIA will ensure that businesses can continue to operate without unnecessary regulatory hurdles.
Additionally, this approach recognises the value of past consultations and the considered inputs of key stakeholders. To discard these insights would be to overlook a valuable resource in shaping the DIA. It is imperative that the DIA builds upon this foundation and takes a balanced and collaborative approach in its development.
For instance, the recently proposed amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 are seen as a significant step by the government to regulate the online gaming industry. These rules were formulated through extensive consultations providing succour to a sector struggling for regulatory certainty. Given the ongoing challenges faced by the sector, it would only be appropriate for the DIA to subsume the regulations and make necessary amendments – as and when needed – once implemented in letter and spirit.
Space for Emerging Technologies
The digital landscape is not static; it is marked by continuous innovation and rapid technological advancements. The DIA should be designed to accommodate these changes and provide a regulatory framework that can adapt to emerging technologies. As technology continues to advance, new frontiers such as Web 3.0, artificial intelligence, and Internet of Things, and sectors like animation, visual effects, gaming, and comics (AVGC) are shaping the digital world. The DIA should have the flexibility and adaptability to incorporate rules and provisions that cater to these emerging technologies.
One of the significant challenges in crafting the DIA lies in striking the right balance between managing potential harms and unlocking productive innovation. Regulation is essential to ensure that the digital landscape remains safe and trustworthy, protecting the rights and interests of users. However, an overly restrictive regulatory framework can stifle innovation and hamper the growth of digital businesses. The DIA must navigate this delicate balance by maintaining and improving on the IT Act’s tested security provisions, along with privacy protection under the Digital Personal Data Protection (DPDP) Act, while fostering an environment conducive to innovation and economic growth.
The recent signing of the ‘Bletchley Declaration’ by India and other major economies shows a sense of commitment to understand opportunities and mitigate multifaceted risks associated with Artificial Intelligence. It is a great example of how the world is trying to best channel the transformative potential of new emerging technologies rather than just put a blanket ban on it. It is a philosophy that DIA must encapsulate.
One approach that the DIA can explore is the concept of regulatory sandbox. This strategy has proven effective in various sectors, including banking, securities, telecom, and insurance. Regulatory sandboxes provide a controlled regulatory environment for testing innovative technologies, products, services, and business models. This approach allows businesses to experiment and innovate in a risk-mitigated environment whereas the regulatory authority gets a better understanding of the innovation use case and changes in regulation to scale up the benefits unlocked.
With India’s growing tech-savvy population and a thriving startup ecosystem, DIA needs to be an evolution rather than a hiatus, ensuring stability and continuity for businesses. As we march towards the milestone of a five-trillion-dollar economy and beyond, technology will play a significant role in making India an economic powerhouse. India can emerge not only as a deployer of digital technologies but also as a creator and exporter of cutting-edge solutions. The DIA has a vital role to play in shaping a digital landscape where technology aligns with India’s values and vision.
