Relevance: GS-2: Government Policies and Interventions for Development in various sectors and issues arising out of their Design and Implementation.

Key Phrases: Ministry of Electronics and Information Technology (MeitY), digital policy, digital economy, Big Tech platforms, Indian-origin multinational corporations, Big Tech Indian start-ups, regulatory vacuum.

Why in News?

• India’s digital economy has been operating in a regulatory vacuum. Perhaps a more appropriate formulation would be a regulatory roller coaster.

Recent Regulations of the Digital Economy:

• In 2022 itself, 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.
• Due credit be given to the policymakers. In fact, the government has recently invited stakeholders to an open house discussion on the proposed changes to the IT Rules.

Policy formation and policy discussion for the digital economy:

• There has been an enormous backlash against the growing power and influence of internet giants.
• They do bring benefits to consumers, businesses, and governments, but then they also enjoy dominant positions, engender misinformation, and at the extreme, undermine democratic processes.
• Governments have been pushed to respond to various aspects of the digital economy — from financial sector regulation to anti-trust to data privacy.
• With so much at stake, Big Tech platforms have intensified their efforts
  by hiring qualified professionals and funding empirical research, not only in India but also across the world.
• The point is 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 organizations, 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.
• They cut across infrastructure, appliances and consumer electronics, automobiles, food processing, fashion, pharmaceuticals, and energy.
• 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 websites.
• The Tatas have taken the plunge into e-commerce, first with Tata Cliq and recently with Neu.
• If so, one wonders why they are distant from conversations on these landmark policies that will determine the future of Indian commerce.
• Reports have quoted the group as acknowledging data governance as one of their biggest challenges.
• Most of the companies are dealing with the challenges of data integration across group companies.

Government and MNC interaction:

• At what point and in what manner MNCs interact with the government 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 matching 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 taken after the policy has been announced.
• This is also because the government does not always consult businesses before announcing a new policy or regulation.

Interaction in the case of the digital economy is different:

• The practice of multi-stakeholders in policy formulation is present in letters, if not always in spirit.
• There are multiple opportunities and avenues for participating in dialogue, even if the final policy document is the same as the first draft.
• 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, have been mostly absent which has resulted in a disproportionate policy focus on keeping Big Tech in check against creating an enabling, secure, and trusted digital ecosystem in India.

Conclusion:

• As many issues highlighted by Big Tech, are likely to be main issues for Indian businesses as well, participation of Indian MNCs could break the “Us versus Them” problem plaguing policy making in India today.

Source: Indian Express

Mains Question:

Q. The discussions over a holistic digital policy formation by the government require the proactive participation of Indian Multinational Companies (MNCs). Discuss.