Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper-Unicorns in Indian economy and issues with their valuation
Context
The biggest-ever initial public offering (IPO) in India fell flat on its face on the first day of its listing in the stock exchange, with shares being traded at prices less than 27% of the IPO price.
Rise of unicorns in India and factors driving it
- Unicorns in diverse sectors: There has been a unicorn gale in India in recent years, covering diverse sectors from fintech to cloud kitchen.
- Growth in digital payment is reflected in the fintech sector that has contributed the most to the unicorn list.
- Factors driving growth: An ecosystem which combines thriving digital payments, a growing smartphone user base and digital-first business models adopted by many start-ups has driven expectations of investors, resulting in large-scale fund flows into new business ventures.
- Growing smartphone user: Expectations are high as the country has around 640 million Internet users, of which 550 million are smartphone users.
- Growing digital payments: Digital payment has seen a growth of 30.19% as of March 31, 2021 and by the end of September 30, the unified payments interface (UPI) registered 3.5 billion transactions amounting to ₹6.54 trillion.
FinTech and EdTech leading unicorns
- American investment firms Tiger Global and Sequoia Capital have been the major investors, providing very quick follow-up rounds of funds across all stages and sectors.
- Fundamental financial performance of the business is not factored in these decisions which could lead to biased valuations.
- Idea of disruptive technologies: The idea of disruptive technologies has become a buzzword for characterising start-ups.
- The idea was that start-ups with limited resources can aim at technology disruption by inventing an entirely new way of getting something done.
- The story is similar in educational technologies (EdTech) as well.
- The novel coronavirus pandemic has been a blessing in disguise for EdTech firms, as it is this external environment that is pushing the industry, giving it an acceleration by four to five years.
- Too many acquisitions with big ambitions to grow inorganically puts pressure on the balance sheet in the years to come as some of the new acquisitions are likely to fail.
- Even, EdTech firms with reasonably good business models are highly overvalued due to abundant liquidity.
- Cost of achieving behaviour change: Almost every second advertisement on primetime television is either of a digital payment firm or EdTech platform.
- New firms in services will have to indulge in this process for a longer period than firms in other industries such as transportation as these firms have to bring about a particular kind of change that customers are significantly comfortable using the service.
- Firms burn cash to give massive discounts to customers in the hope that people will get so habituated to these platforms that they will remain active even when the prices are hiked.
- To some extent this worked in the context of mobile telephone services as Indians have got hooked to mobile phones and reoriented spending to buy more sophisticated smartphones and data.
- But in other services this does not seem to work so easily.
- The projection flaw: Data by the Centre for Monitoring Indian Economy (CMIE) points to this flaw of over-optimistic demand projections as there are just about 23 million households which earn more than ₹5 lakh per year i.e., less than ₹42,000 a month, which is about 7% of all Indian families.
- It is only this class which can be coaxed to behavioural changes — i.e. people who can afford various kinds of goods and services.
- If firms want to go beyond this 7% of households they have to offer bigger discounts, burning more cash, with the possibility that once the discounts are reduced, customers drop off.
Consider the question “India is witnessing the unicorn boom in the starts-ups. However, valuation of these unicorns has raised concerns. In light of this, examine the factors driving the rise of unicorns in India and why their valuation raises concerns?”
Conclusion
We are witnessing new unicorns emerging every month, which are products of inflated valuations to tap more funds to burn more cash. These valuations are solely on the basis of future earnings, with virtually no profits to show in the present.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to Privacy
Mains level: Personal Data Protection Bill
The Joint Parliamentary Committee (JPP) on the Personal Data Protection Bill of 2019 is said to have adopted the final draft. The Bill will be tabled in the Winter Session of Parliament.
What is Personal Data?
- Data can be broadly classified into two types: personal and non-personal data.
- Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.
- Non-personal data includes aggregated data through which individuals cannot be identified.
- For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data.
What is Data Protection?
- Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.
Why was a bill brought for Personal Data Protection?
- In August 2017, the Supreme Court had held that Privacy is a fundamental right under Article 21 of the Constitution.
- The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy.
- In July 2017, a Committee of Experts, chaired by Justice BN Srikrishna, was set up to examine various issues related to data protection in India.
- The committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018.
How is personal data regulated currently?
- Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000.
- The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data.
Issues with IT Rules, 2011
- The IT rules were a novel attempt at data protection at the time they were introduced but the pace of development of digital economy has shown its shortcomings.
- For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract.
- Further, the IT Act applies only to companies, not to the government.
What does the Personal Data Protection Bill provide?
- Collection and storage: The bill regulate personal data related to individuals, and the processing, collection and storage of such data.
- Data Principal: Under the bill, a data principal is an individual whose personal data is being processed.
- Data fiduciary: The entity or individual who decides the means and purposes of data processing is known as data fiduciary.
- Data processing: The Bill governs the processing of personal data by both government and companies incorporated in India.
- Data localization: It also governs foreign companies, if they deal with personal data of individuals in India.
- General consent: The Bill provides the data principal with certain rights with respect to their personal data. Any processing of personal data can be done only on the basis of consent given by data principal.
- Data Protection Authority: To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a DPA.
Issues with the PDP Bill
- Exemptions to the govt: Section 35 of the bill permits the Central Government to exempt any agency of the Government from the provisions of the law.
- No reasonable exemptions: There is no sufficient reason for government agencies to be exempted from basic provisions of the Bill.
- Easy breach: Though this would be subject to procedures, safeguards, and oversight mechanisms to be prescribed by the Government.
- Executive hegemony: There is no scope for oversight over the executive’s decision to issue such an order.
- Arbitrary and intrusive: As demonstrated by the Pegasus case, the current frameworks for protecting citizens from arbitrary and intrusive State action lack robustness.
Why is the state given exemption?
- Biggest needy of Data: The State is one of the biggest processors of data, and has a unique ability to impact the lives of individuals.
- Welfare objectives: It has a monopoly over coercive powers as well have the obligation to provide welfare and services.
Issues with Exemption to State
- Grounds of expediency: the use of this provision on grounds of expediency is an extremely low bar for the Government to meet.
- Non requirement for exemption order: There is no requirement for an exemption order to be proportionate to meeting a particular State function.
- No oversight on executive actions: There is no scope for oversight over the executive’s decision to issue such an order or any safeguards prescribed for this process.
- State surveillance: Section 36(a) of the Bill provides for an exception where personal data is being processed against criminal investigation. This provision could therefore encourage vigilantism or enable privatized surveillance.
Best practices followed across the world
- The European GDPR (General Data Protection Regulation) is commonly seen as the pinnacle of data protection regulation worldwide.
- The EU law has in place a separate law that deals with the processing of personal data by law enforcement agencies.
- UK’s Data Protection Act dedicates Part 3 that liberalises certain obligations while at the same time ensuring that data protection rights are also protected.
Way forward
- Balancing privacy interests with those of public needs (such as that of State security) is a difficult task.
- This should undergo rigorous consultations in Parliament taking into confidence all stakeholders.
- Once debated in Parliament, one can only hope that adequate time and attention is given to finding a better balance between competing interests.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bharat Gaurav Scheme
Mains level: Not Much
To tap the huge potential of tourism, the Railways has announced the ‘Bharat Gaurav’ Scheme.
Bharat Gaurav Scheme
- Under this Scheme, theme-based tourist circuit trains, on the lines of the Ramayana Express, can be run either by private or State-owned operators.
- Till now, the Railways had passenger segments and goods segments.
- Now, it will have a third segment for tourism under the Bharat Gaurav.
- The scheme has been developed after extensive stakeholder discussions and a lot of State Governments, including Odisha, Rajasthan, Karnataka and Tamil Nadu, have shown interest.
Key features
- Service providers, who can be an individual, company, society, trust, joint venture or consortium will be free to decide themes/circuits.
- They will offer an all-inclusive package to tourists including rail travel, hotel accommodation and sightseeing arrangement, visit to historical/heritage sites, tour guides etc.
- They have full flexibility to decide the package cost.
- The service providers will also be able to design/furnish the interior of the coaches based on the theme and put branding or advertising inside and outside of the train.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Myusur Declaration
Mains level: Not Much
The Participants from 16 States signed the Mysuru Declaration and resolved to roll out the Common Minimum Service delivery by Panchayats across the country from April 1, 2022.
Mysuru Declaration
- The Mysuru declaration is aimed at recognising Citizen Centric Services as the “Heart of Governance”.
- It provides key inputs on various aspects of service delivery that are either provided by the panchayats directly or services of other departments that are facilitated by panchayats.
Highlights of the Declaration
WE, the Representatives and Officials recognise the efforts to promote inclusive and accountable Local Self Governments in delivery of services, in consonance with the priorities and the aspirations of our citizens.
We accept responsibility for seizing this moment to strengthen our commitments to promote transparency, empower citizens, and harness the power of new technologies towards timely and quality delivery of services; enhancing citizen service experiences
We uphold the value of openness in our engagement with citizens to improve services, incorporating diverse views when designing and delivering services. We embrace principles of transparency and open government with a view towards achieving greater prosperity, well-being, and human dignity for sustainable development of local communities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: All India Survey on Domestic Workers
Mains level: Not Much
Union Minister for Labour and Employment has flagged off the first ever All All India Survey on Domestic workers being conducted by Labour Bureau.
All India Survey on Domestic Workers
- The Survey is aimed to estimate the number and proportion of domestic workers at National and State level.
- It would help find percentage distribution of domestic workers with respect to Live-in/Live-out, formal/ Informal Employment, Migrant/Non-Migrant, their wages and other socio-economic characteristics.
- The survey will also provide the Household Estimates of Live-in/Live-out domestic workers and average number of domestic workers engaged by different types of households.
Objectives of the Survey
- Estimate the number/proportion of DWs at National and State level.
- Household Estimates of Live-in/ Live-out DWs.
- Average number of DWs engaged by different types of households.
Why need such Survey?
- Domestic workers (DWs) constitute a significant portion of total employment in the informal sector.
- However, there is a dearth of data on the magnitude and prevailing employment conditions of DW.
- Hence with the view to have time series data on domestic workers, GoI has entrusted Labour Bureau to conduct an all-India survey on DWs.
Parameters of the Survey
The Domestic Worker Survey collects information on the following broad parameters:
- Household Characteristics such as HH size, Religion, Social Group, Usual Monthly Consumption Expenditure, Nature of Dwelling unit.
- Demographic Characteristics such as Name, Age, Relation to Head, Marital Status, General Education Level, Usual Principal Activity Status, Subsidiary Activity Status and Status of DWs.
- Information on Employer is also collected such as their preferences of DW regarding Gender and marital status, mode of payment of wages, number of days worked, mode of engagement, whether DW services were availed during ii COVID-19 pandemic, medical support given to DWs.
Scope of the Survey
- All India States/UTs of India covered are 37 and Districts covered are742
- Unit of Enumeration is Villages as per Census 2011 and Urban Blocks as per latest phase of UFS.
- At the all-India level, a total number of 12766 First Stage Units (FSUs) i.e., 6190 villages and 6576 UFS blocks will be covered in the survey.
- 1,50,000 Households i.e., the Ultimate Stage Units (USU) will be covered.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Right to privacy
Mains level: Paper 2- Issues with use of facial recognition technologies by the police
Context
According to police officials, more than six lakh CCTV cameras have already been deployed in the city, with the very real possibility that this number will continue to increase. These all-pervasive cameras will soon be connected in a real-time network managed by Hyderabad’s Command and Control Centre.
Facial Recognition
It is a biometric technology that uses distinctive features of the face to identify and distinguish an individual. Over a period of almost 6 decades, it has evolved in many ways- from looking at 3D contours of a face to recognizing skin patterns.
How does it work?
- The facial recognition system works primarily by capturing the face & its features through the camera and then using various kinds of software to reconstruct those features.
- The captured face along with its features is stored into a database, which can be integrated with any kind of software that may be used for security purposes, banking services, etc.
- In the Automated Facial Recognition System (AFRS), the large database (containing photos and videos of peoples’ faces) is used to match and identify the person. The image of an unidentified person, taken from CCTV footage, is compared to the existing database using Artificial Intelligence technology, for pattern-finding and matching.
What are the uses?
- Authentication: It is used for identification and authentication purposes with a success rate of almost 75%.
- For instance, the NCRB’s Crime and Criminal Tracking Network & Systems (CCTNS) managing crime data for police, use automated facial recognition to identify criminals, missing people, and unidentified dead bodies, as well as for “crime prevention”.
- The project is aimed at being compatible with other biometrics such as iris and fingerprints.
- The integration of fingerprint databases, face recognition software and iris scans will massively boost the police department’s crime investigation capabilities.
- Force Multiplier: In India, where there are just 144 constables per 1 lakh citizens, this can act as a force multiplier. It neither requires too much manpower nor regular up-gradation. Hence, this technology coupled with the present manpower in place can act as a game-changer.
- Varied applications: It is increasingly being used for everything from unlocking mobile phones to validating the identity, from auto-tagging of digital photos to finding missing persons, and from targeted advertising to law enforcement.
Opposition to facial recognition technologies
- How it works: Facial recognition technology identifies the distinctive features of a person’s face to create a biometric map, which an algorithm then matches to possible individuals.
- The system searches across databases of millions of images scraped without knowledge or consent and often fails.
- Severe scrutiny: The use of facial recognition technology is already under severe scrutiny around the world, with some jurisdictions, including Belgium and Luxembourg, have already banned its use.
- Ban by EU: The European Union is in the process of finalizing and passing one of the most comprehensive bans on facial recognition technology yet, while in the United States, multiple cities- and state-level bans and moratoria have been imposed.
- More than 200 organizations have called for a global ban on the use of biometric surveillance technologies that enable mass and discriminatory surveillance, while even Facebook announced that it would be shutting down its facial recognition program.
Issues with the use of facial recognition technologies in India
- Violation of the right to privacy: The right to privacy was recognized as a fundamental right, included under the right to life and liberty by the Supreme Court of India in 2017.
- Absence of legal framework: Without a law in place to regulate data collection and to act as an oversight mechanism, valid concerns about privacy and other rights violations continue to arise.
- High Infrastructural Costs: Technologies like Artificial Intelligence and Big Data are costly to implement. The size of stored information is extremely large and requires huge network & data storage facilities, which are currently not available in India.
- Image Collection: The sources from which images will be collected to create a repository/database need to be known.
- The concern of Data Leakage: In today’s world of cybercrime, it is important to put appropriate safeguards in place in order to ensure the integrity of the repository/database, so that it doesn’t leak out the information and is not privatized or monetized.
- Required Expertise: Experts are needed to verify and authenticate data collected before storing them who should be provided proper training to protect & avoid abuse and misuse of the collected data & database.
- Reliability & Authenticity: As the data collected may be used in the court of law during the course of a criminal trial, the reliability and the admissibility of the data along with standards and procedures followed would be taken into consideration. Hence, the authenticity of the data is crucial.
- Huge amounts of public money are being spent on these technologies with no evidence of their effectiveness, further squandering precious public funds.
The National Automated Facial Recognition System
- To empower the Indian police with information technology, India approved the implementation of the National Automated Facial Recognition System (NAFRS).
- On its implementation, it will function as a national-level search platform that will use facial recognition technology.
- It will help to facilitate investigation of crime or for identifying a person of interest regardless of face mask, makeup, plastic surgery, beard, or hair extension.
Way Forward
- Save the time of police: This is a compare and contrast tool meant for identification based on existing information. The process of identification can be accelerated by its use.
- Proper Legal safeguards are a must: With proper safeguards, this technology is much needed for India. Having the biggest IT workforce in the world, state-of-the-art technology can act as a game-changer for India.
- Need to learn from Global examples: Police departments in London are under pressure to put a complete end to the use of facial recognition systems following evidence of discrimination and inefficiency.
- Hence, it is necessary to make use of such technology, but it cannot act as the silver bullet for all the police reforms that we need.
Conclusion
Government programs such as Safe City, Smart City, and the Nirbhaya Fund have been utilized to bankroll these projects — yet the human rights violations that occur as a result of their use far outweigh any purported benefit that these technologies claim to provide.
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