 "digital India, 5G")
The year gone by has proven to be an inflection point for Digital India. The family of digital public goods created on open-source programming is gearing up for global scale. Apart from the introduction of the Open Network for Digital Commerce (ONDC) and the digital rupee, the government has set the stage for bringing stability in digital regulations.
“The Prime Minister has given us a very clear target for creating a comprehensive legal regulatory framework. We are creating three horizontals — the Telecom Bill for the carrier, the Digital Personal Data Protection (DPDP) Bill, focused around enforcing citizens’ privacy, and the Digital India Bill, which looks at practically everything else required to be regulated,” Union IT Minister Ashwini Vaishnaw recently said.
The regulatory overhaul is expected to be completed in 14-16 months. The drafts of the DPDP Bill and the Telecom Bill have been released for consultation; the draft Digital India Act is likely to come by this month-end. Vaishnaw said the laws will boost innovation with artificial intelligence (AI), which is expected to play a “leading role” going ahead.
The Telecom Bill will replace the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950; the Digital India Act will replace the IT Act, 2000, while the DPDP Bill will enforce the right to privacy, thus scrapping decades-old laws governing the 21st-century tech ecosystem.
Digital Personal Data Protection Bill
Kulbir Kaur, partner, forensics and integrity services at EY India, thinks the DPDP Bill may have removed one of the biggest blocks in the Digital India story. She believes the revamped bill is much simpler and easier to comprehend.
“The need for India to have a data protection bill was important due to the relevance of such an Act globally now. Europe came out with an important rule regarding ‘what are friendly countries’ or which countries you can send your data to. India was not a part of that as we had neither a Bill nor an Act,” says Kaur.
She reckons that with a data privacy law about to be brought in, things will move in the country’s favour. “When you say Digital India, it’s not just about the local economy or impact — India is also a global player. Privacy is one of the pillars of digital society and usage. So having a legal provision is very important.”
At the core of the Digital India journey is the India stack — a set of open Application Programming Interfaces (APIs) and digital public goods. Vaishnaw said there will be more platforms in the India stack for sectors like logistics, agriculture, and healthcare.
In 2022 the Unified Payments Interface (UPI), the instant real-time payment system developed by the National Payments Corporation of India (NPCI), crossed Rs 12 trillion in total monthly transaction value. The government has signed MoUs with some 30 countries to adopt UPI-based payment services, pointing to the big global demand for Indian digital goods.
Says Mihir Gandhi, partner and payments transformation leader, PwC India: “The percentage of retail transactions happening via digital payments versus paper-based instruments increased from 15 per cent in 2017 to 40-45 per cent in 2022, which shows the progress we have made in adopting the India stack and digital mediums for transactions.”
CBDC and account aggregators
If crypto was the theme for 2021, this year saw the Reserve Bank of India launch the Central Bank Digital Currency (CBDC) — the digital rupee. Enabled by blockchain technology, the currency is aimed at reducing operational costs of physical cash, and facilitating better financial inclusion, easier settlements, and innovation in the payments system.
Gandhi says, “The e-rupee is not a payment mode; rather, it is a store of value. The use-cases for the e-rupee can be varied and can go beyond conventional payment transactions. Embedded and ecosystem finance, instant lending, and trade finance can all leverage the e-rupee. It can not only be widely accepted, but also replace physical currency with digital money.”
Another major development on the financial front came from the growth of the account aggregator (AA) network launched in 2021. Earlier this year, at the Global Fintech Fest, Finance Minister Nirmala Sitharaman said that the AA network would revolutionise credit flow to medium and small businesses. So far, 2.67 million bank accounts have been linked to the AA ecosystem.
“What is significant is that this account aggregator system went live in September 2021, and as of September 2022, just within 12 months, 52 RBI-regulated entities, including banks and NBFCs are on the AA network,” Sitharaman said.
Open Network for Digital Commerce
ONDC is being touted as the UPI moment for retail. It was launched a year ago to create a level-playing field for small merchants in India’s fragmented but fast-growing $1-trillion retail market. In September, ONDC’s beta version was launched in 15 cities, including Delhi, Shillong, Coimbatore, Bhopal, Bengaluru, and Lucknow.
Though the network was first launched to reduce the dominance of the largest players in the market, e-commerce giants like Flipkart, Amazon and Ecom Express engaged in talks with the ONDC team. They have discussed partnerships to integrate their platform with the network as well as providing expertise to build it.
5G Rollout
The ultra-high-speed fifth-generation or 5G telecom services were launched in India in October. As of November 26, telecom operators have started 5G services in 50 towns in over 14 states and Union Territories, the government stated in Parliament.
5G telecom networks are expected to generate revenues of nearly $180 billion in the country by 2030, accounting for almost 2 per cent of India’s GDP, according to a report by the industry body National Association of Software and Services Companies (Nasscom) and Arthur D Little, a consultancy.
