Data protection bill: Govt mulls exempting startups from data sharing rules

The Centre could exempt some Indian start-ups from provisions of the Personal Data Protection Bill relating to the usage and purpose of data collected from citizens, at its discretion, The Financial Express (FE) reported on Wednesday.

This implies that startups could be exempted from collecting the absolute minimum data required for any purpose and limiting its usage to the intended purpose. Only government-notified data fiduciaries and data processing entities will be exempted when it comes to data collection and data sharing, according to the report.

The exemption may be for a limited period to assist startups in cases where they could be performing data modelling to develop their business models, and to ensure that innovation is not stifled due to compliance burden.

Analysts were quoted as saying citizens may have to deal with the concerned startups at their own risk if such exemptions are granted, and there will be no breather from marketing calls and spam. Also, the chances of data breaches from such entities may be high.

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Some legal experts have expressed concern over non-compliance with broader norms and rules while dealing with personal data. Amol Kulkarni, director of research at Consumer Unity and Trust Society, was quoted as saying that the centre needs to specify as to how and on what basis the startups will be exempted and it should also clearly mention the timeline for which certain sections of startups will be given exemptions.  The centre will have to closely monitor how the startups are processing data, Kulkarni added.

Supratim Chakraborty, partner at Khaitan and Co said that the centre should prioritise the nature of data a startup is processing over volume of data.