From UPSC perspective, the following things are important :
Prelims level : Not much
Mains level : Paper 3- Digital economy and policy formulation challenges
Hyperactivity in the digital regulatory space in India in the form of policies, rules and guidelines signals the accelerated growth of the digital ecosystem which needs regulatory nurturing.
Recent policy measures related to digital ecosystem
- 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) and the new cyber security directions (April 2022).
- Besides these, the most awaited and critical e-commerce policy and the Data Protection Bill, both of which have been in the making for at least a few years now, are likely to be announced soon.
- This hyperactivity signals the accelerated growth of the digital ecosystem which needs regulatory nurturing.
- The government has recently invited stakeholders to an open house discussion on the proposed changes to the IT Rules.
Participation of Big Tech platforms and other stakeholders in policy discussions
- Various aspects of digital economy: Governments have been pushed to respond to myriad aspects of the digital economy — from financial sector regulation to anti-trust to data privacy.
- With so much at stake, Big Tech platforms have upped their advocacy by hiring qualified professionals and funding empirical research, not only in India but also across the world.
- Google, Amazon, Facebook, Twitter and the likes are all actively engaged in policy discussions, either directly or through third parties to put forth a point of view.
- Similarly, start-ups, think tanks, civil society organisations and academics invested in the issues of the digital economy either as users or as observers contribute to the policy discourse.
Who is missing?
- Indian origin multinational corporations — the Tatas, Reliance, Aditya Birla Group, Godrej, ITC, Bajaj, and Hero — have collectively contributed to the country’s development.
- While these may not be quintessential digital companies, except for Reliance Jio, many are working towards adopting digital technologies for manufacturing, distribution, and client service.
- Many companies now have online distribution channels that retail through intermediary platforms or their own websites.
- The Tatas have taken the plunge into e-commerce, first with Tata Cliq and recently with Neu.
- Despite this, these Indian MNCs are distant from conversations on these landmark policies that will determine the future of Indian commerce.
Government relations and outreach functions of MNCs
- Government relations and outreach functions have always been important to big businesses.
- At what point and in what manner MNCs interact with the government will of course vary.
- Using a sector-specific example, all telecom companies in India committedly participate in TRAI’s open houses, industry deliberations and written submissions so that they can nudge policymakers toward industry-friendly decision-making that sits well with overall growth objectives.
- On general concerns such as infrastructure and the ease of doing business, intervention from the industry is much more indirect and often an ex-post phenomenon, that is, after the policy has been announced.
- The practice of multi-stakeholderism in policy formulation is present in letter, if not always in spirit.
Policy formulation in digital economy
- The case of the digital economy is different.
- There are multiple opportunities and avenues for participating in dialogue.
- Striking balance between business viability and government objectives: The policy teams of Big Tech make the most use of these channels to present their point of view and hope for reconciliation on issues, with the final policy document attempting to strike a balance between business viability and government objectives.
- Over the last few years of active debate on critical digital policies including those on data governance, privacy, anti-trust, and intermediary liability, there has been an overwhelming presence of the Big Tech Indian start-ups competing in this space, as well as their affiliated associations.
- Indian MNCs, for reasons unclear, has been mostly absent.
Absence of Indian MNCs resulted in is a disproportionate policy focus on keeping Big Tech in check as against creating an enabling, secure and trusted digital ecosystem in India. As many issues highlighted by Big Tech are likely to be pain points for Indian businesses as well, participation of Indian MNCs could break the “us versus them” problem plaguing policy making in India today.