The Aakhya Weekly #61 | Understanding the Digital India Bill

Aug 17, 2023

In a notable development last week, the long-debated Digital Personal Data Protection (DPDP) Bill received the President's approval, becoming law after an extended drafting and consultation process. As the dust settles around this landmark (if controversial) legislation, we must now shift our attention to one of the many crucial bills for the digital landscape, the Digital India Bill (DIB).

The journey towards the DIB has been punctuated by several announced timelines, each unfortunately slipping by with little progress. Earlier this year, the Ministry of Electronics and Information Technology (MeitY) organized two discussions, the ‘Digital India Dialogues’, involving various stakeholders, aimed at offering insights into the government's potential approach to shaping the bill. Initially, the consultation on the bill was scheduled to begin on June 7, 2023. Some sources even hinted at a draft being ready by early July. Yet, the bill remains at the pre-drafting stage and has not yet been opened for public consultation.

The presentation outlining the aspects envisioned for the bill from the pre-drafting consultations indicates ambitions of a thorough overhaul of the two-decade-old Information Technology (IT) Act, 2000. This overhaul is intended to create a modern digital framework that aligns with other crucial legislation and policies, including the Digital Personal Data Protection Act, the Telecommunication Bill, the National Data Governance Policy, amendments to the Indian Penal Code addressing cybercrime, and more. Among these, the Indian Telecommunication Bill has already secured cabinet approval, and the Digital Personal Data Protection Bill has successfully transitioned into law.

At present, the IT Act 2000 serves as the fundamental framework governing online entities. Over time, it has seen updates, like the 2008 Amendment and the 2011 IT Rules, aimed at keeping up with the dynamic digital landscape. However, these updates haven't fully captured the complexities of today’s rapidly evolving cybersecurity concerns and have fallen behind on questions of data privacy. A comprehensive replacement has thus become crucial to ensuring that digital laws remain effective in the face of ever-evolving challenges.

What the bill proposes

To begin, the scope of the Digital India Bill is extensive. The government aims to safeguard users from online harm, such as cyberbullying, defamation, and doxing. The concerns it wishes to address includes the safety of women and children, fake news, radicalization, and the spread of hate speech. Plans proposed during the discussions highlights three main areas of focus: open internet, online safety, and trust and accountability.

Establishing an open internet means ensuring fair and equal access to digital services for startups and preventing discrimination. MoS Chandrashekhar emphasized that the Ministry won't ban emerging technologies like artificial intelligence, blockchain, robotics, the Internet of Things, and virtual reality to promote innovation. The intention is to set principle-based guidelines for these technologies instead of prescriptive regulations, echoing the sentiment that large tech entities sometimes manipulate the digital landscape to their advantage.

The government seeks a structured approach to address use harms like revenge porn, cyberbullying, doxing, and information manipulation, while also introducing age restrictions to protect minors from addictive technologies. They propose a mandatory 'do not track' rule to shield children from targeted advertising. Another critical area of concern is the regulation of misinformation, often termed "fake news". The bill highlights that the current discretionary moderation of fake news by social media platforms needs thorough evaluation and regulation, albeit within the framework of constitutional rights to freedom of speech and expression. How one can achieve such regulation without slipping into censorship, alas, is a matter to be addressed in later stages.

A significant mention in the bill is overseeing high-risk AI systems. This involves establishing methods to ensure these systems meet certain quality standards and setting up frameworks within institutions to manage them. These frameworks shall address things like how regulations are put in place, making sure algorithms are responsible, and assessing vulnerabilities. The goal is to be proactive in governing AI, aiming to maintain ethical standards and minimize potential risks.

The government recognizes the pressing requirement for a specific adjudicatory mechanism dedicated to encouraging responsible and ethical use of online technologies. However, the MoS clarified that they are not aiming for a monolithic regulator akin to the Telecom Regulatory Authority of India (TRAI) in the digital realm. Instead, they favor a "light-touch" approach that favors innovation and startup growth without imposing excessive restrictions.

The implementation of these interventions and potential overlaps with other legislations with similar goals remain unclear. The bill also outlines various digital rights for users, such as the right to be forgotten, secure electronic methods, access to issue resolution, digital inheritance, protection from discrimination, and automated decision-making. Although it's unclear if these rights will be directly included in the legislation, acknowledging them represents a positive stride towards establishing a responsible and user-centered digital environment.

Intermediaries and the Safe Harbor Debate

A noteworthy element of the proposed Digital India Bill is its emphasis on intermediaries and the concept of a ‘safe harbor’. The existing 2000 IT Act defines intermediaries as entities that bridge users and the internet. The notion of safe harbor, embodied in Section 79 of the IT Act, presently shields intermediaries from legal liability for third-party content hosted on their platforms.

Globally, only a handful of countries have established distinct regulations for intermediaries. For instance, the EU's Digital Services Act introduces three tiers of intermediaries, each carrying varying legal responsibilities. Australia has also implemented a multi-tiered categorization system with specific codes for different platform types. Technological experts hold that safe harbor is a vital principle to ensure freedom of expression on the internet, as platforms are required to take action solely against content that is deemed illegal.

MoS Chandrashekhar commented:

In the 2000s, intermediaries equalled safe harbor, but today they have morphed into multiple types of participants on the Internet that are functionally very different from each other and require different types of guardrails and regulatory requirements. Indeed, a question – how many of them should be entitled to safe harbor…
What should we consider as a safe harbor for intermediaries? Who should be entitled for safe harbor and should the government at all be playing the arbiter between platforms and those who are aggrieved by content on them…
There is a greater diversity and complexity about the platforms that are on the Internet today and therefore, there is this legitimate question – should there be a safe harbor at all? If there is a need for a safe harbor, who should get it?

It's evident that the digital landscape hosts a variety of intermediaries, a trend that's expected to grow. This diverse group includes e-Commerce platforms, search engines, social media platforms, digital media outlets, gaming platforms, and essential intermediaries like Telecom Service Providers and Internet Service Providers. Given their unique roles, there's a requirement to handle each of them differently, calling for a nuanced regulatory strategy and separate rules for each category. Through the 2021 Information Technology Rules and subsequent amendments, the government has expanded its oversight of safe harbor by introducing additional due diligence requirements. These include the appointment of India-based employees to liaise with the government and respond to user inquiries. More recently, the establishment of three government-appointed appellate committees aims to resolve unresolved user grievances.

The Digital India Bill undoubtedly aligns with the expanding scope and vision of the government's own campaign. However, its transition into law is a gradual process, involving several rounds of consultations. It remains essential to see how the government's intentions manifest in the draft and how effectively it adapts to the dynamic and ever-evolving digital landscape in which we reside.

Top Stories of the Week

FAME-III in the works?

The Government of India has reportedly drafted a proposal for phase III of its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) Scheme, with a planned outlay of INR 40-50,000 crores to bolster the adoption of electric vehicles (EVs) through steadfast focus on stimulating demand and enhancing charging infrastructure.

Under the National Electric Mobility Mission Plan (NEMMP) launched in 2013, the Government of India targeted sales of 60-70 lakh electric vehicles annually from 2020. To this effect, FAME was launched in 2015. The budget outlay for FAME I and II was INR 895 crores and INR 10,000 crores respectively, supporting a total of 7.5 lakh EVs, 6,749 electric and hybrid buses and 4,973 charging stations. Notably, EV penetration has made significant strides in India over the last 3 years, growing from a mere 1% in 2020 to 5% in 2022 and 6% YTD in 2023. While this progression is promising, however, it is important to acknowledge that EV sales of 9 lakhs were recorded year-to-date in 2023 and 10 lakhs in 2022, nowhere close to the annual target of 60-70 lakhs. With nearly 23 lakh EV sales until March 2023, charging stations are also short of demand with only one station per 346 EVs while the global ideal ratio is one station for 6-20 EVs.

Despite multiple additional government measures, including reduced GST rate for EVs, chargers and charging stations (5% instead of 12%), waiver of road tax and incentives through green license plates, the demand continues to fall considerably short of supply. The mismatch can be attributed to various factors including inadequate architecture, affordability concerns exacerbated in the absence of subsidies, high battery replacement costs and apprehensions about the predominantly non-renewable nature of the energy grid.

The insufficient demand has led to companies resorting to unethical practices to secure FAME II subsidies, such as misrepresentation of vehicles as domestically manufactured even when assembled using importing components. Additionally, some companies have segregated billing for EVs and chargers to manipulate vehicle costs to levels eligible to avail subsidy benefit under FAME II.

For meaningful change to occur, the government needs to work on demand-side factors. One potential avenue could be mandating corporate vehicle fleets to transition to EVs. Without such correction action, FAME III is unlikely to bring in substantial transformation. Moreover, the news may be premature as it comes less than a month after the Minister of State for Heavy Industries said that there were no plans under consideration for FAME-III.

Independence Day Speech Wrap-up

Here are the big take-aways from Prime Minister Narendra Modi’s Independence Day address:

Global Leadership in Challenging Times

Amid global challenges posed by the COVID-19 pandemic, Prime Minister Modi positioned India as a beacon of stability and public good. He used the term "Vishwamitra" to represent India's role as a global friend, particularly in areas like climate change and renewable energy.

Interest Rate Subvention for Urban Poor's Housing Dreams

Prime Minister Modi introduced an interest rate subvention scheme designed to facilitate housing ownership for the urban poor. The shift in approach may stem from a review of the Pradhan Mantri Awas Yojana-Urban (PMAY-U), indicating that achieving "housing for all" remains a challenge. Only about two-thirds of sanctioned houses were completed in the last eight years, leading to a call for revising beneficiary contributions to around 40% from the current 60%.

Vishwakarma Yojana: Empowering Traditional Artisans

Under the forthcoming Vishwakarma Yojana, artisans and skilled individuals will receive substantial financial support ranging from ₹1,300 crore to ₹1,500 crore.

Women Empowerment through Technology: Drones in Agriculture

The scheme to train women from self-help groups in drone usage and repair for agricultural tasks was unveiled. This pioneering effort aims to bridge the gender gap in technology and empower women to contribute significantly to India's agriculture sector. The goal of creating "lakhpati didis" - sisters with significant resources - further emphasizes the focus on women's economic empowerment.

Enhanced Access to Affordable Healthcare

The government announced an expansion of Jan Aushadhi Kendras, increasing their number from 10,000 to 25,000. These centres provide accessible and affordable generic medicines, ensuring quality healthcare for all citizens.

India's Path to Global Prominence

Prime Minister Modi's speech also highlighted India's future trajectory, emphasizing the nation's demographic advantage, democratic foundation, and cultural diversity. He envisioned the youth and working professionals driving India's rejuvenation for the next millennium, with Tier-2 and Tier-3 towns and a burgeoning middle class propelling India into the league of developed nations by 2047.

A Few Good Reads

M. Govinda Rao highlights the difficulties that the 16th finance commission shall be faced with.
Rahul Matthan gets real about the brouhaha around the much-discussed data protection law in India.
Looking at how economies work, artificial intelligence shall have a noticeable but not dramatic impact on economic growth, Tyler Cohen writes.
A cultural revolution, a period of inflation and a long and persistent malaise. Are we back in the 1970s? asks Eric Hoel. Noah Smith concurs.
Trae Stephens and Markie Wagner implore us all to choose good quests.

The Aakhya Weekly