[Burning Issue] Data: The New Gold

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In the age of the digital economy, data is the “new oil” and the “new gold”. Lots of apps have no revenue generation, but their only benefit is data. This business model of the Internet is called Surveillance capitalism, where all social media apps and other such platforms make their money collecting data on users and monetizing that. Companies such as Google, Facebook, and Amazon have all built empires atop the data economy.

India is in a strong position to lead the world in the industry 4.0 revolution that relies on big data analytics and digital technology to improve manufacturing. The cheap cost of mobile data in India and the increasing use of digital technology to set up businesses will facilitate economic transactions and interaction with the government. Let us understand the topic in detail and try to understand what data is and why it has garnered such importance.

What is Data?

  • Data refers to distinct pieces of information, usually formatted and stored in a way that is concordant with a specific purpose.
  • Since the advent of computer science in the mid-1900s, however, data most commonly refers to information that is transmitted or stored electronically.
  • Data has become the forefront of many mainstream conversations about technology. New innovations constantly draw commentary on data, how we use and analyze it, and broader implications for those effects.

What is Big data?

  • Big Data is a phrase used to mean a massive volume of both structured and unstructured data that is so large it is difficult to process using traditional database and software techniques.
  • Through the use of high-end computing and algorithms, Big data has been used in the industry to provide customer insights by analyzing and predicting customer behavior through data derived from social media.
  • Big data analytics: The process of collecting, organizing, and synthesizing large sets of data to discover patterns or other useful information.

What is Data privacy?

  • Data privacy or information privacy is a branch of data security concerned with the proper handling of data – consent, notice, and regulatory obligations.
  • It got highlighted when identifiable data of about 50 million Facebook users was breached by an analytics firm.
  • Privacy is a basic human right, in the digital age where life has so prominently got integrated with the digital world, data privacy has become a human right too.

What is Industrial Revolution 4.0?

  • The Fourth Industrial Revolution (IR 4.0) is a term that describes present technological age. It is the fourth industrial era since the inception of the initial Industrial Revolution of the 18th century.
  • The key elements of the fourth revolution are the fusion of technologies ranging from the physical, digital to biological spheres.

Characteristics of IR 4.0

  • It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
  • It brings together digital technology and the physical world to create a new range of products and services.
  • The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited.
  • And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.
  • The revolution is evolving at an exponential rather than a linear pace and it is disrupting almost every industry in every country.

Why data is so important?

  • How data will be employed fruitfully, and its value captured, will decide a nation’s rank in the emerging new global geo-economic and geo-political hierarchies.
  • The global digital or artificial intelligence (AI) economy is currently a two-horse race between the U.S. and China.
  • It is feared that all other countries, including the European Union (EU) and major developing countries such as India, will have to become fully digitally dependent on one of these two digital superpowers.
  • This will considerably compromise their economic and political independence, something referred to as digital colonization.
  • The shift to digital power, and its concentration, is very evident. Seven of the top eight companies by market cap globally today are data-based corporations.
  • A decade back, this list was dominated by industrial and oil giants. Almost all top digital corporations in the world are U.S. or Chinese.

What is Digital India

  • Digital India is a campaign launched to ensure the Government’s services are made available to citizens electronically by improved online infrastructure and by increasing Internet connectivity or by making the country digitally empowered in the field of technology.
  • The initiative includes plans to connect rural areas with high-speed internet networks.
  • Digital India consists of three core components: the development of secure and stable digital infrastructure, delivering government services digitally, and universal digital literacy.
  • Key Projects include Digilockers, SBM Mobile app, e-Sign framework to enable citizens to digitally sign document online, online registration system launched under e-Hospital application, etc.

What is the digital economy?

  • Digital economy is defined as an economy that focuses on digital technologies, i.e. it is based on digital and computing technologies.
  • It essentially covers all business, economic, social, cultural etc. activities that are supported by the web and other digital communication technologies.
  • There are three main components of this economy:
    1. e-business
    2. e-business infrastructure
    3. e-commerce

Data Requires Infrastructure

  • Just as oil requires infrastructure for storage and transportation, data requires infrastructure in the form of software and hardware.
  • Any business that wants to maintain data for analytics will need technology for collecting the data and storing the data.
  • Good data infrastructure has the following qualities:
    1. Available — obviously, you should be able to retrieve data from the system in a reasonable amount of time. Especially if you plan to frequently reuse the data for analytics.
    2. Fault-tolerant — what happens if a machine suddenly fails and the data on it is lost or corrupted? You need a system that can handle events such as these without losing data. This is where distributed computing comes into play in big data applications.
    3. Cost-effective — data infrastructure that becomes unnecessarily expensive becomes a liability rather than an asset.

Why Digital Economy is important for India?

  • Increase in Revenues: When the transactions are digitized, monitoring sales and taxes becomes convenient. This increase the revenue of the government resulting in growth of the overall financial status of the country.
  • Removal of Black Economy: When the transactions are made digitally, they can be easily monitored. There will be no means for illegal transactions to occur. By restricting the cash-based transactions can efficiently expel the black economy.
  • Empowerment to People: One of the biggest advantages of moving towards digital economy is that it gives an empowerment to the citizens. When the payments move digital, each and every individual is bound to have a bank account, a mobile phone, etc.
    • The government can easily transfer the subsidies directly to Aadhaar-linked bank accounts of people.
  • Creation of New Jobs: The digital economy has a lot of potential to enhance job opportunities in new market as well as increasing employment opportunities in some of the existing occupations in the government.
  • Paves the Way to e-Governance: The quicker, safe, and more efficient alternative traditional governance, e-governance will be the ultimate outcome of the digital economy. Thus, it is convenient for people to access the information they need on the go.

What is digital market imbalance and how to fix it?

  • Due to inability of government to address this market concentration, it has resulted in the creation of digital market oligarchy because larger players like Facebook, Google, Amazon etc enjoy significant returns to scale.
  • Thereby the digital economy poses a problem for competition policy.
  • Economic policies must itself move towards digitization to remain relevant in this digital era. This can be done by:
    1. India must protect its startups from becoming proprietary of foreign brands (through takeovers), this can be done by allowing preferential shares.
      • For eg: Take over of Flipkart by Walmart.
    2. Data must be monetized on part of data subjects, data subjects must be paid a royalty for use of their data.
    3. The government must lay down policies that put a check on anti-competitive policies of these digital companies. In this light, Draft e-commerce policy is a welcome step.
    4. India till now has no law to stop apps from sharing your data with data brokers or data analytics firms.
    5. An ideal data protection law must reflect the Supreme Court’s recent decision: That all interference with the right to privacy must be necessary and proportionate.
    6. Data protection law must incorporate inspiration from the European Union’s implementation of the General Data Protection Regulation (GDPR) and BN Srikrishna report.
    7. The law must also lay down norms of accountability on part of digital tech giants.
    8. Also, the government must clear the air around the use of Aadhaar that has raised speculations about the surveillance state.

What is mean data protection?

  • Data protection is the process of safeguarding important information from corruption, compromise or loss.
  • Data is the large collection of information that is stored in a computer or on a network.
  • The importance of data protection increases as the amount of data created and stored continues to grow at unprecedented rates.

What is the need for data protection?

  • Large number of web users: There are about 504 million active web users and India’s online market is second only to China.
  • Data as a source of profit: Large collection of information about individuals and their online habits has become an important source of profits.
  • Concern of privacy: It is also a potential avenue for invasion of privacy because it can reveal extremely personal aspects.
    • Companies, governments, and political parties find it valuable because they can use it to find the most convincing ways to advertise to you online.

Laws for Data Protection across the Globe:

  • European Union: The primary aim of the General Data Protection Regulation (GDPR) is to give individuals control over their personal data.
  • US: It has sectoral laws to deal with matters of digital privacy such as the US Privacy Act, 1974, Gramm-Leach-Bliley Act etc.

Initiatives in India

1) Information Technology Act, 2000

  • It provides for safeguard against certain breaches in relation to data from computer systems. It contains provisions to prevent the unauthorized use of computers, computer systems and data stored therein.

2) Personal Data Protection Bill 2019

  • The Supreme Court maintained the right to privacy as a fundamental right in the landmark decision of K.S. Puttaswamy vs Union of India 2017 after which the Union government had appointed Justice B.N. Srikrishna Committee for proposing skeletal legislation in the discipline of data protection.
  • The Committee came up with its report and draft legislation in the form of the Personal Data Protection Bill, 2018.
  • In 2019, Parliament again revised the Bill and much deviation from the 2018 Bill was evident. The new Bill was named as Personal Data Protection Bill, 2019.
    • The purpose of this Bill is to provide for protection of privacy of individuals relating to their Personal Data and to establish a Data Protection Authority of India for the said purposes and the matters concerning the personal data of an individual.

Way Forward

  • In this digital age, data is a valuable resource that should not be left unregulated.
    • The time is ripe for India to have a robust data protection regime.
  • Policies need to be reformulated to ensure that it focuses on user rights with an emphasis on user privacy. A privacy commission would have to be established to enforce these rights.
  • The government would also have to respect the privacy of the citizens while strengthening the right to information.
  • Additionally, the technological leaps made in the last two to three years also need to be addressed knowing that they have the capacity of turning the law redundant.


  • The digital economy seems to be growing and flourishing very well even without such regimes.
  • Disengaging from signing binding agreements on uninhibited data flows across borders does not mean that a country would simply localize all data.
    • Some kinds of data may indeed need to be localized, while others should freely flow globally.
  • It just means that a country retains complete data policy space, and the means to shape its digital industrialization, and thus its digital future.
  • Appropriate data policies must ensure that the required data is actually available to Indian digital businesses.

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