Centre for Internet and Society

Regulating Bitcoin in India

vipul — 2017-04-20T13:17:37Z

The article discusses the possible contours of future bitcoin regulation in India. Bitcoin, often considered a ‘notorious’ virtual currency limited only to techies or speculators, is currently fighting a battle to become a bona fide mainstream means of exchange.

While most currencies in the real world have the backing of a central authority of some kind (such as a sovereign or a Central Bank) infusing them with an air of legitimacy, Bitcoin has no such central authority which issues or controls it. Additionally, the distributed and decentralised nature of the Bitcoin network makes regulation a tricky issue. This article seeks to touch upon the issue of Bitcoin regulation and makes certain broad suggestions for the future. It is a follow-up to a previous article by this author discussing the legal treatment of Bitcoin under Indian law, available at http://cis-india.org/internet-governance/bitcoin-legal-regulation-india.

The Reserve Bank of India (RBI) has not exactly been shy in recognising and even regulating technological advances in the financial sector as is evident from their detailed guidelines on Internet Banking,[1] Prepaid Payment Instruments[2] Account Aggregator Regulations,[3] and the consultation paper on proposed regulations for P2P lending platforms,[4] etc. However, though the RBI has acknowledged the existence of Bitcoin (it issued a note cautioning the public against dealing in virtual currencies including Bitcoin way back in 2013[5] and again in 2017[6]), there have been no clear guidelines regarding the same. Nevertheless, Bitcoin has come a long way since its inception and a consensus is emerging amongst the more technically inclined individuals that Bitcoin is infact here to stay.

Even if a sceptical view is taken that Bitcoin may not last for a long time, that does not mean that regulation is useless as there is already a large amount of money invested in Bitcoin entities in India and Bitcoin exchanges seem to be betting big on this sector really taking off - especially in the backdrop of the government’s recent push towards a more digital and less cash dependent economy.

While the Indian government is trying to hard sell the idea of digital payments, primarily using existing banking channels as well as the relatively new National Payments Corporation of India (NPCI) and the various applications that are cropping up around the NPCI’s UPI platform, one must note that going digital could involve high administrative costs. These costs are typically charged by banks and intermediary merchants, and may not be palatable to all stakeholders, as was evident in the recent fracas between petrol pump owners and banks over proposed transactional charges on card payments.[7]

It is this vacuum that alternatives such as prepaid payment instruments and virtual currencies can fill while addressing the concern of high administrative charges, which is likely to be a major hurdle in going digital. Administrative charges for most of these instruments are significantly lower than what existing payment channels charge for digital transactions.[8]

Legality of Bitcoin and the need for Regulation

Bitcoin technology is being widely embraced all over the world, including neighbouring China which has become one of the biggest markets for the uniquely decentralised currency. However the biggest hurdle that Bitcoin enthusiasts see in mainstreaming this technology is the fact that most countries are treading too cautiously around Bitcoin and therefore do not have regulation governing them.

The creation and transfer of Bitcoin is based on an open source cryptographic protocol and is not managed by any central authority.[9] It is the decentralized nature of this virtual currency that makes regulation a major challenge. This does not mean that regulators are not capable of regulating Bitcoin, in fact attempts have been made in several jurisdictions but these are mostly in the discussion stage, for eg. the Washington Department of Financial Institutions (“DFI”) introduced a bill in December, 2016 which proposes amendments to certain portions of the Washington Uniform Money Services Act and includes provisions specific to digital currencies;[10] the U.S. District Court for the Southern District of New York has in a decision in September, 2016 taken the view that Bitcoin is money under the plain meaning of Section 1960, the federal money transmission statute.[11]

This article does not intend to undertake a discussion on how Bitcoin is dealt with in various jurisdictions, but instead is aimed at suggesting a possible way forward for Indian regulators to regulate Bitcoin in a manner that satisfies the regulatory zeal towards security as well as ensures that the technology does not get stifled through overregulation. It is important that the regulators create a balanced regulation because an impractical ecosystem for Bitcoin exchanges and their users, may lead to traders seeking alternative methods of purchasing Bitcoin such as P2P trading, over-the-counter (OTC) markets and underground trading platforms, which are significantly more difficult to regulate.[12]

Suggestions for Regulation

Since Bitcoin is a decentralised cryptocurrency, it is impossible to regulate it through one single centralised point for all transactions. Neither is it feasible to regulate each and every Bitcoin user. A pragmatic compromise between these two extremes could be to regulate the points at which fiat currency or valuable goods enter the Bitcoin system, i.e. the Bitcoin exchanges where people may buy and sell Bitcoin for actual real world money, or websites which offer Bitcoin as a means of payment. Such an approach would reduce the number of points of supervision and lead to effective enforcement of the regulations. The regulations may require any entity providing services such as buying and selling of Bitcoin for actual money, trading in Bitcoin (such as non-cash exchanges) or providing other Bitcoin related services (such as Bitcoin wallets, merchant gateways, remittance facilities, etc.) to be registered with a central government agency, preferably the Reserve Bank of India.

One legal issue regarding the regulation of companies transacting in Bitcoin is whether the RBI has the authority or jurisdiction to regulate Bitcoin in the first place. Without getting into the arguments regarding whether it is a dangerous trend or not, an easy way in which the RBI could ensure it has the authority to regulate Bitcoin would be to follow the path that the RBI adopted while regulating Account Aggregators under the Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016 wherein the RBI declared Account Aggregators as Non Banking Finance Companies under section 45-I(f)(iii) thereby getting the authority to regulate and supervise them under section 45JA of the Reserve Bank of India Act, 1934.

The Regulations, once issued by the Reserve Bank of India, can prescribe mandatory registration, capital adequacy provisions, corporate governance conditions, minimum security protocols, Know Your Customer (KYC) requirements and most importantly provide for regular and ongoing reporting requirements as well as supervision of the Reserve Bank of India over the activities of Bitcoin companies.

Any proposed Bitcoin regulatory framework would seek to address certain issues; for the purposes of this article, we will assume that the following three issues are the ones that must necessarily be addressed by a regulatory framework:

Security of the consumer’s property and prevention of fraud on the consumer. In the technology sector this translates into specific emphasis on increased security (against hacking) for accounts that the consumers maintain with the service provider.
India has robust exchange control laws and the inherently decentralised and digital nature of Bitcoin can enable transfer of value from one jurisdiction to another without any oversight by a central agency, potentially violating the exchange control laws of India.
Bitcoin has for long been associated with criminal and nefarious activities, infact many believe that the famous black market website “Silk Road” played a big role in making Bitcoin famous[13] and therefore preventing Bitcoin from being used for illegal activities (or creating a mechanism to ensure a digital trail to help investigations post facto) would be a major issue that the regulations would seek to tackle.

Given the above assumptions, let us examine whether the Regulations suggested above can satisfactorily address the concerns of security of consumers, exchange control, and keeping a tab on criminal activities.

If the regulations provide for minimum capital adequacy requirements as well as registration by the RBI or some other central agency, then the chances of consumers being duped by “fly-by-night” operators would be significantly reduced. The Regulations can also provide for minimum security protocols to be maintained by the companies, which protocols can themselves be developed in concert with Bitcoin experts. Critics may point to the hacking of various Bitcoin exchanges in the recent past, including that of MtGox, in which Bitcoin worth millions of dollars were siphoned off, and argue that the security protocols may not be enough to prevent future instances of hacking. But that is true even for the current security protocols for online banking; and that has not prevented a large number of banks from providing online banking facilities and the RBI regulating the same. The other vital issue that legally mandated security protocols would address (and potentially solve) is the issue of liability in case of hackings. Regulations may provide clarity on this issue and protect innocent customers from negligent companies while at the same time protecting entrepreneurs by defining and limiting the liability for bona fide and vigilant companies.

The other issue that may be of major concern to the authorities is exchange control. India has extremely specific exchange control laws, and if any person in India wants to transfer any amount to any person overseas, the only legal way to do so is through a bank transfer, which requires filling paperwork giving the reason for the transfer (although the RBI and banks usually don’t ask for any proof for small amounts upto a few lakhs). This means that all transfers outside India are done through proper banking channels and are therefore under the supervision of the RBI. However the decentralised nature of Bitcoin enables individuals to transfer money outside the borders of India without going through any banking channels and hence stay completely outside the purview of the RBI’s supervision. Such a system which lets users transfer money beyond national borders outside legal banking channels could be easily misused by nefarious actors and this is exactly what happened as international drug cartels turned to Bitcoin and other digital currencies to move their ill gotten wealth beyond the borders of various countries.[14] Regulating the entities which provide Bitcoin wallets and Bitcoin exchanges will ensure that the RBI can exercise its supervisory jurisdiction over Bitcoin transactions of individual customers even though these transactions do not go through the regular banking channels. The Regulations could impose an obligation on the companies to provide information on any suspicious activities or provide greater information about accounts which see very high volumes, etc. to ensure that Bitcoin is not used to finance organised crime. Thus, the regulations could have provisions that would require the companies providing the Bitcoin wallets or exchanges to flag and monitor customers whose trading accounts or Bitcoin wallets have transactions of an amount greater than a specified limit. This would provide the RBI with the ability to enquire as to the reasons for such high volumes and weed out illegal transactions while at the same time allowing bona fide transactions to continue.

Very closely linked to the issue of exchange control and supervision of transactions is the issue of checking the furtherance of criminal activities using the apparent anonymity offered by Bitcoin. However if the RBI has regulatory oversight over all the Bitcoin companies that are operating in India, then it would be possible for it to keep an eye on most Bitcoin transactions in India as long as the wallet that originates or terminates the transaction has been provided by a Bitcoin service provider located in India. An argument may be made that a criminal may use the services of Bitcoin wallet services provided by companies outside India and therefore outside the purview of the RBI and its regulations. However this argument may not be as plausible as it may seem at first look; if we assume that for any criminal activity the ultimate goal is to get the money in the form of recognizable legal tender (preferably cash or money in a bank account) then it stands to reason that the Bitcoin in the wallet would be exchanged for currency at some point or the other in the chain, which can only be done through a Bitcoin exchange if the transaction is of a fairly high value (which most criminal transactions are) and these exchanges as well as the accounts maintained by them will be under the purview of the RBI, thus providing the law enforcement agencies with the final link in the chain of transactions. Further, the public nature of the blockchain (the ledger where each Bitcoin trade is registered and verified) also makes it possible for the enforcement agencies to follow the trail of money for each and every Bitcoin or part thereof.

Conclusion

From the discussion above, we see that the major arguments that have been given by sceptics regarding Bitcoin and its attractiveness to criminals due to its decentralised nature are actually not very viable on a closer look. Bitcoin and the blockchain technology are extremely important steps in the direction of better and more efficient financial transactions in the global economy, which is why a number of mainstream banks are also showing a keen interest in the blockchain technology.[15] Regulations governing Bitcoin or virtual currencies would clear the air regarding their legal status so that consumers as well as entrepreneurs and investors can invest more money in this technology which could potentially change the way financial transactions are carried out across jurisdictions.

[1] https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=414&Mode=0

[2] https://rbi.org.in/scripts/NotificationUser.aspx?Id=10799&Mode=0

[3] https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10598

[4] https://rbidocs.rbi.org.in/rdocs/content/pdfs/CPERR280416.pdf

[5] https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30247

[6] https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=39435

[7] http://timesofindia.indiatimes.com/business/india-business/petrol-pumps-wont-accept-cards-from-monday-to-protest-banks-transaction-fee/articleshow/56402253.cms

[8] For example, currently the network fee for a person to person Bitcoin transfer is 0.0001 Bitcoin, which comes to roughly Rs. 6 per transaction irrespective of the amount involved.

[9] The processing of Bitcoin transactions is secured by servers called Bitcoin “miners”. These servers communicate over an internet-based network and confirm transactions by adding them to a ledger which is updated and archived periodically using peer-to-peer filesharing technology, also known as the “blockchain”. The integrity and chronological order of the blockchain is enforced with cryptography. In addition to archiving transactions, each new ledger update creates some newly-minted Bitcoins.

[10] https://www.virtualcurrencyreport.com/2017/01/washington-department-of-financial-institutions-proposes-virtual-currency-regulation/

[11] https://www.virtualcurrencyreport.com/2016/09/sdny-opinion-re-bitcoin/. For a discussion on how different States and agencies in the United States deal with Bitcoin, please see Misha Tsukerman, “THE BLOCK IS HOT: A SURVEY OF THE STATE OF BITCOIN REGULATION AND SUGGESTIONS FOR THE FUTURE, Berkeley Technology Law Journal, Vol. 30:385, 2015, p. 1127, available at http://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=2084&context=btlj .

[12] http://themerkle.com/why-china-isnt-interested-in-banning-bitcoin-importance-of-regulation/

[13] See generally, Nathaniel Popper, “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money”, Harper Collins, 2015.

[14] https://www.bloomberg.com/view/articles/2013-11-18/are-bitcoins-the-criminal-s-best-friend-

[15] http://www.morganstanley.com/ideas/big-banks-try-to-harness-blockchain.

For more details visit https://cis-india.org/internet-governance/blog/regulating-bitcoin-in-india

Rational Internet laws essential to fulfil India’s digital goals

praskrishna — 2016-08-15T04:13:06Z

India has emerged as a digitally-connected nation but experts suggest the country still lacks pragmatic Internet laws.

The article by Krishna Makwana was published by Deccan Chronicle on August 14, 2016. Sunil Abraham was quoted.

According to a report by Internet and Mobile Association of India, our country has approximately 400 million Internet users. Given the fact that we now prevail in the digital age, the government needs to work towards devising an unbiased internet policy for helping budding entrepreneurs and businesses.

Though the government, under its Digital India initiative, has addressed manifold problems over the past year, the ambiguous internet laws in the country have had a drastic effect on businesses and individuals.

Sunil Abraham, Executive Director of Centre for Internet Society, said, “There are three categories of laws which we must consider. One, speech regulation laws –- here we tend to be more repressive in comparison to other mature democracies. Two, intellectual property law which can enable or undermine access to knowledge -– here we are quite progressive and we must thank our policymakers for their foresight. Three, privacy and data protection laws –- these are incomplete, outdated or missing -– this not only undermines the rights of citizens but also weakens our cyber security.”

Defamation and national security can be listed among other issues that have threatened free speech; there have been instances where weak Internet laws led to the defamation of several artists and authors, curbing freedom to expression.

Not only individuals but online businesses have also had to limit their potential, in order adhere to the India’s hazy Internet laws. Among others, countless websites have been blocked by the government over the past few years.

However, with proper regulation in place along with rational vigilance, many of these problems might cease to exist.

It’s essential that these issues are thought about, in-depth. The country needs to build a structure that can deliver innovation, protection and provision of one and all.

“Without improving the three important areas that I pointed out, we cannot be successful at Digital India, Make In India and Start Up India,” Abraham concluded.

For more details visit https://cis-india.org/internet-governance/news/deccan-chronicle-krishna-makwana-august-14-2016-rational-internet-laws-essential-to-fulfil-indias-digital-goals

Public Panel Discussion: Digitalisation for Social Change

praskrishna — 2016-08-19T13:47:28Z

Sunil Abraham is participating as a panelist in a discussion co-organized by Mount Carmel College, Bangalore and Friedrich-Ebert-Stiftung, India Office in Bangalore on August 22, 2016.

Welcome Remarks by Sunanda BV , Mount Carmel College, Bangalore and Patrick Ruether, Friedrich-Ebert-Stiftung, India Office

On the Panel:

Digital Solutions to social problems and development challenges or Social Entrepreneurship and digital transformation: Sunil Abraham, Centre for Internet and Society
Gendered perspective on digital transformation: Anita Gurumurthy , IT for Change
India 2030 – the change I want Maureen Almeida, Student, Mount Carmel College
Technology as best practice: Anurag Shanker, NASVI, New Delhi

Note: Each panelist will give an input for about 5-7 minutes and this will be followed by Q&A session moderated by Rakhee Bakshee, Women's Feature Service

For more info contact: Jyoti Rawal, jyoti@fesindia.org

For more details visit https://cis-india.org/internet-governance/news/public-panel-discussion-digitalisation-for-social-change

Press Release, March 15, 2016: The New Bill Makes Aadhaar Compulsory!

Amber Sinha — 2016-03-16T10:11:32Z

We published and circulated the following press release on March 15, 2016, to highlight the fact that the Section 7 of the Aadhaar Bill, 2016 states that authentication of the person using her/his Aadhaar number can be made mandatory for the purpose of disbursement of government subsidies, benefits, and services; and in case the person does not have an Aadhaar number, s/he will have to apply for Aadhaar enrolment.

Nandan Nilekani, the former chairperson of the Unique Identification Authority of India had repeatedly stated that Aadhaar is not mandatory. However, in the last few years various agencies and departments of the government, both at the central and state level, had made it mandatory in order to be able to avail beneficiary schemes or for the arrangement of salary, provident fund disbursals, promotion, scholarship, opening bank account, marriages and property registrations. In August 2015, the Supreme Court passed an order mandating that the Aadhaar number shall remain optional for welfare schemes, stating that no person should be denied any benefit for reason of not having an Aadhaar number, barring a few specified services.

The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, however, has not followed this mandate. Section 7 of the Bill states that “a person should be authenticated or give proof of the Aadhaar number to establish his/her identity” “as a condition for receiving subsidy, benefit or service”. Further, it reads, “In the case a person does not have an Aadhaar number, he/she should make an application for enrollment.” The language of the provision is very clear in making enrollment in Aadhaar mandatory, in order to be entitled for welfare services. Section 7 also says that “the person will be offered viable and alternate means of identification for receiving the subsidy, benefit or service. However, these unspecified alternate means will be made available in the event “an Aadhaar number is not assigned”. This language is vague and it is not clear whether it mandates alternate means of identification for those who choose not to apply for an Aadhaar number for any reason. The fact that it does make it mandatory to apply for an Aadhaar number for persons without it, may lead to the presumption that the alternate means are to be made available for those who may have applied for an Aadhaar number but it has not been assigned for any reason. It is also noteworthy that draft legislation is silent on what the “viable and alternate means of identification” could be. There are a number of means of identification, which are recognised by the state, and a schedule with an inclusive list could have gone a long way in reducing the ambiguity in this provision.

Another aspect of Section 7 which is at odds with the Supreme Court order is that it allows making an Aadhaar number mandatory for “for receipt of a subsidy, benefit or service for which the expenditure is incurred” from the Consolidated Fund of India. The Supreme Court had been very specific in articulating that having an Aadhaar number could not be made compulsory except for “any purpose other than the PDS Scheme and in particular for the purpose of distribution of foodgrains, etc. and cooking fuel, such as kerosene” or for the purpose of the LPG scheme. The restriction in the Supreme Court order was with respect to the welfare schemes, however, instead of specifying the schemes, Section 7 specified the source of expenditure from which subsidies, benefits and services can be funded, making the scope much broader. Section 7, in effect, allows the Central Government to circumvent the Supreme Court order if they choose to tie more subsidies, benefits and services to the Consolidated Fund of India.

These provisions run counter to the repeated claims of the government for the last six years that Aadhaar is not compulsory, nor is the specification by the Supreme Court for restricting use of Aadhaar to a few services only, reflected anywhere in the Bill. The “viable and alternate means” clause is too vague and inadequate to prevent denial of benefits to those without an Aadhaar number. The sum effect of these factors is to give the Central Government powers to make Aadhaar mandatory, for all practical purposes.

For more details visit https://cis-india.org/internet-governance/blog/press-release-aadhaar-15032016-the-new-bill-makes-aadhaar-compulsory

Press Release, March 11, 2016: The Law cannot Fix what Technology has Broken!

Japreet Grewal and Sunil Abraham — 2016-03-16T10:10:40Z

We published and circulated the following press release on March 11, 2016, as the Lok Sabha passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016. This Bill was proposed by finance minister, Mr. Arun Jaitley to give legislative backing to Aadhaar, being implemented by the Unique Identification Authority of India (UIDAI).

The Lok Sabha passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 today. This Bill was proposed by finance minister, Mr. Arun Jaitley to give legislative backing to Aadhaar, being implemented by the Unique Identification Authority of India (UIDAI).

The Bill was introduced as a money bill and there was no public consultation to evaluate the provisions therein even though there are very serious ramifications for the Right to Privacy and the Right to Association and Assembly. The Bill has made it compulsory for an individual to enrol under Aadhaar in order to receive any subsidy, benefit or service from the Government. Biometric information that is required for the purpose of enrolment has been deemed "sensitive personal information" and restrictions have been imposed on use, disclosure and sharing of such information for purposes other than authentication, disclosure made pursuant to a court order or in the interest of national security. Here, the Bill has acknowledged the standards of protection of sensitive personal information established under Section 43A of the Information Technology Act, 2000. The Bill has also laid down several penal provisions for acts that include impersonation at the time of enrolment, unauthorised access to the Central Identities Data Repository, unauthorised use by requesting entity, noncompliance with intimation requirements, etc.

Key Issues

1. Identification without Consent

Before the Aadhaar project it was not possible for the Indian government to identify citizens without their consent. But once the government has created a national centralized biometric database it will be possible for the government to identify any citizen without their consent. Hi-resolution photography and videography make it trivial for governments and also any other actor to harvest biometrics remotely. In other words, the technology makes consent irrelevant. A German ministers fingerprints were captured by hackers as she spoke using hand gesture at at conference. In a similar manner the government can now identify us both as individuals and also as groups without requiring our cooperation. This has direct implications for the right to privacy as we will be under constant government surveillance in the future as CCTV camera resolutions improve and there will be chilling effects on the right to free speech and the freedom of association. The only way to fix this is to change the technology configuration and architecture of the project. The law cannot be used as band-aid on really badly designed technology.

2. Fallible Technology

The technology used for collection and authentication as been said to be fallible. It is understood that the technology has been feasible for a population of 200 million. The Biometrics Standards Committee of UIDAI has acknowledged the lack of data on how a biometric authentication technology will scale up where the population is about 1.2 billion. Further, a report by 4G Identity Solutions estimates that while in any population, approximately 5% of the people have unreadable fingerprints, in India it could lead to a failure to enroll up to 15% of the population.

We know that the Aadhaar number has been issued to dogs, trees (with the Aadhaar letter containing the photo of a tree). There have been slip-ups in the Aadhaar card enrolment process, some cards have ended up with pictures of an empty chair, a tree or a dog instead of the actual applicants. An RTI application has revealed that the Unique Identification Authority of India (UIDAI) has identified more than 25,000 duplicate Aadhaar numbers in the country till August 2015.

At the stage of authentication, the accuracy of biometric identification depends on the chance of a false positiveâ€” the probability that the identifiers of two persons will match. For the current population of 1.2 billion the expected proportion of duplicates is 1/121, a ratio which is far too high. In a recent paper in EPW by Hans Mathews, a mathematician with CIS, shows that as per UIDAI's own statistics on failure rates, the programme would badly fail to uniquely identify individuals in India. [1]

Endnote

[1] See: http://cis-india.org/internet-governance/blog/epw-27-february-2016-hans-varghese-mathews-flaws-in-uidai-process

For more details visit https://cis-india.org/internet-governance/blog/press-release-aadhaar-11032016-the-law-cannot-fix-what-technology-has-broken

Pratap Vikram Singh - Why Aadhaar is Baseless?

praskrishna — 2016-04-02T05:31:30Z

This article by Pratap Vikram Singh, Governance Now, discusses the problems emerging out of the UIDAI project due to its lack of mechanisms for informed and granular consent, and for seeking recourse in the case of denial of service. The article quotes Sumandro Chattapadhyay and mentions Hans Varghese Mathew's work on the biometric basis of UIDAI. It was written before the Aadhaar bill was passed in Lok Sabha.

Cross-posted from Governance Now.

It was no less than a roller-coaster ride for Aadhaar, a programme formulated by the UPA government to assign a 12-digit unique number to every Indian resident. From the time it came into being in 2009, Aadhaar drew a volley of criticism, thanks to the misgivings and apprehensions that various critics and civil society organisations had. It was criticised for lack of a clear purpose, degree of effectiveness and absence of a privacy law and was virtually thrown into the bin by a parliamentary panel headed by BJP’s Yashwant Sinha in December 2011.

When the finance minister Arun Jaitley, in his budget speech, announced that the government would introduce the Aadhaar bill during the budget session, expectations were already set high. The bill, giving statutory backing to the unique identification authority of India (UIDAI), the implementing authority, was passed by the Lok Sabha on March 11. While the privacy and voluntary versus mandatory provisions are under the consideration of the supreme court, the bill makes way for linking Aadhaar with all government subsidies, benefits and services. The law on Aadhaar, former UIIDAI chairman Nandan Nilekani wrote in the Indian Express, will help the government in going paperless, presence-less and cashless. The legislation, however, fails to deliver on several counts.

However, prior to evaluating the bill (yet to be passed by the Rajya Sabha at the time of this writing though it is a money bill), let us take a look at its major aspects. For those, who always wondered whether Aadhaar is mandatory or voluntary, the bill 2016 makes it mandatory to avail subsidy, benefit or a service from the government.

The bill has provisions related to information security and confidentiality (section 28) which not only extend to employees of the UIDAI but also consultants and external agencies working with the authority.

The proposed law restricts information sharing. It bars UIDAI from sharing core biometric information – the bill defines it as fingerprints and iris scan – with “anyone for any reason whatsoever” or “used for any purpose other than generation of Aadhaar numbers and authentication under this Act”. The section 32 of the bill entitles Aadhaar number holders to access her or his authentication record. It also bars the authority from collecting, keeping or maintaining information about the purpose of authentication.

Odd Drives the Bill

While the intent is clear and is aimed at streamlining welfare schemes to ensure it reaches the bottom of the pyramid, cutting through the long chain of pilferage and subversion, the bill, however, has several shortcomings. To begin with, the government should not have taken the money bill route to pass the legislation – tactfully avoiding any conclusive discussion and debate in the Rajya Sabha, where it is in minority.

The bill assumes that the technology and the biometric system used by the UIDAI are flawless and it doesn’t provide any recourse in case of denial of a service. “If your fingerprint is not matching and you lose out on service, then what is the alternative mechanism you have,” asks Sumandro Chattapadhyay, research director, centre for internet and society (CIS). The bill doesn’t provide for recourse. “What if the scanning machine fails? What if the identifiers of two people match?”

Based on experiments conducted in the initial days of the Aadhaar programme, Hans Verghese Mathews, another CIS researcher, did a study on the probability of matching of identifiers of two persons. “For the current population of 1.2 billion the expected proportion of duplicands (users whose identifiers match) is 1/121, a ratio which is far too high,” Mathews wrote in the Economic and Political Weekly in February.

“It is like putting the technology in a black box – which can’t be reviewed,” says Chattapadhyay. The bill doesn’t talk about setting up an independent body to review the logs and keep an eye on wrong and duplicate matches.

Who Defines National Security?

According to public policy experts, it is an attempt to seek “minimal legitimacy” from parliament and further adds to the unbridled power of the executive.

Although the bill restricts information sharing in section 29, sections 33 and 48 provide exemption in cases of national security and public emergency, respectively. The legislation, nevertheless, doesn’t elaborate on what constitutes national security and public emergency, leaving it to the executives. The section 33 reads: “Nothing contained in… shall apply in respect of any disclosure of information, including identity information or authentication records, made in the interest of national security….”

Similarly, section 48 states that if, at any time, the central government is of the opinion that a public emergency exists, “the central government may, by notification, supersede the Authority for such period, not exceeding six months, as may be specified in the notification and appoint a person or persons as the president may direct to exercise powers and discharge functions under this Act”.

Says Jayati Ghosh, professor, centre for economic studies and planning, Jawaharlal Nehru University, “National security is a very opaque term. Who decides what national security is? Today, the whole JNU is being projected as a threat to national security.” Swagato Sarkar, associate professor and executive director, Jindal school of government and public policy, OP Jindal Global University, says, “The bill has provisions for oversight on the use of Aadhaar, but then it suspends those provisions in case of emergency in the later sections, giving the state the power to use biometric information for whatever it deems fit.”

Sarkar adds, “It seems the bill is simply an instrument for seeking minimum legitimacy from parliament. The bill tries to address the concern of privacy minimally and it hardly serves any purpose.” He believes that there is a need to define the broader contours of democratic control of the state and reassess the changing state-citizen relationship, instead of rejecting the whole idea on the basis of surveillance and privacy. In other words, there is a need for strong parliamentary oversight, and that the Aadhaar related matters shouldn’t be completely delegated to the executive.

In its recommendations on formulating Privacy Act, the justice AP Shah committee in 2012 provided for establishing the office of privacy commissioner at the regional and central levels, defining the role of self-regulating organisations and co-regulation, and creating a system of complaints and redressal for aggrieved individuals. Since the country still doesn’t have any legislation on privacy, people are left on their own in case of an infringement or violation of privacy. Moreover, section 47 states, “No court shall take cognizance of any offence punishable under this Act, save on a complaint made by the Authority or any officer or person authorised by it.”

In its report, the parliamentary committee headed by Yashwant Sinha notes that “enactment of national data protection law… is a prerequisite for any law that deals with large scale collection of information from individuals and its linkages across separate databases”. The committee notes that in absence of data protection legislation, it would be difficult to deal with issues of access, misuse of personal information, surveillance, profiling, linking and matching of databases and securing confidentiality of information.

Subsidy-Aadhaar Linkage

The Sinha committee also takes a cautious view of the role of Aadhaar in curbing leakages in subsidy distribution, as beneficiary identification is done by states. It notes, “Even if the Aadhaar number links entitlements to targeted beneficiaries, it may not even ensure that beneficiaries have been correctly identified. Thus, the present problem of proper identification would persist.”

According to Ghosh, the biggest danger in using Aadhaar for social welfare programmes is that the fingerprints of the rural working class is not always in good shape and hence Aadhaar will not be the best way of identification. “If I am misidentified, I can go to so many places for recourse. But what if a labourer in a remote Jharkhand village is misidentified? Where and whether he would go?” the economist asks. Besides, the bill doesn’t limit the use of Aadhaar and defines areas where it can be used. Section 57 says that the law will not prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, “whether by the state or anybody corporate or person, pursuant to any law, for the time being in force or any contract to this effect.”

According to a PRS Legislative review, since the bill also allows private persons to use Aadhaar as a proof of identity for any purpose, the provision will open a floodgate and enable private entities such as airlines, telecom, insurance and real estate companies to mandate Aadhaar as a proof of identity for availing their services.

Since the bill doesn’t restrict its application, people will not have a choice to identify themselves other than using Aadhaar when corporate organisations make it mandatory, says Chattapadhyay of the CIS. Adds Sarkar, “The bill should clearly mention sectors or services where Aadhaar will be potentially used (or made mandatory). Every time a new sector or service is added to the list, it is done after parliamentary approval.”

So far, 98 crore people have been assigned Aadhaar number. So far the project has costed Rs 8,000 crore.

For more details visit https://cis-india.org/internet-governance/news/gov-now-pratap-vikram-singh-17032016-why-aadhaar-is-baseless

Notes for India as the digital trade juggernaut rolls on

basu — 2022-02-09T15:04:36Z

Sitting out trade negotiations could result in the country losing out on opportunities to shape the rules.

The article by Arindrajit Basu was published in the Hindu on February 8, 2022

Despite the cancellation of the Twelfth Ministerial Conference (MC12) of the World Trade Organization (WTO) late last year (scheduled date, November 30, 2021-December 3, 2021) due to COVID-19, digital trade negotiations continue their ambitious march forward. On December 14, Australia, Japan, and Singapore, co-convenors of the plurilateral Joint Statement Initiative (JSI) on e-commerce, welcomed the ‘substantial progress’ made at the talks over the past three years and stated that they expected a convergence on more issues by the end of 2022.

Holding out

But therein lies the rub: even though JSI members account for over 90% of global trade, and the initiative welcomes newer entrants, over half of WTO members (largely from the developing world) continue to opt out of these negotiations. They fear being arm-twisted into accepting global rules that could etiolate domestic policymaking and economic growth. India and South Africa have led the resistance and been the JSI’s most vocal critics. India has thus far resisted pressures from the developed world to jump onto the JSI bandwagon, largely through coherent legal argumentation against the JSI and a long-term developmental vision. Yet, given the increasingly fragmented global trading landscape and the rising importance of the global digital economy, can India tailor its engagement with the WTO to better accommodate its economic and geopolitical interests?

Global rules on digital trade

The WTO emerged in a largely analogue world in 1994. It was only at the Second Ministerial Conference (1998) that members agreed on core rules for e-commerce regulation. A temporary moratorium was imposed on customs duties relating to the electronic transmission of goods and services. This moratorium has been renewed continuously, to consistent opposition from India and South Africa. They argue that the moratorium imposes significant costs on developing countries as they are unable to benefit from the revenue customs duties would bring.

The members also agreed to set up a work programme on e-commerce across four issue areas at the General Council: goods, services, intellectual property, and development. Frustrated by a lack of progress in the two decades that followed, 70 members brokered the JSI in December 2017 to initiate exploratory work on the trade-related aspects of e-commerce. Several countries, including developing countries, signed up in 2019 despite holding contrary views to most JSI members on key issues. Surprise entrants, China and Indonesia, argued that they sought to shape the rules from within the initiative rather than sitting on the sidelines.

India and South Africa have rightly pointed out that the JSI contravenes the WTO’s consensus-based framework, where every member has a voice and vote regardless of economic standing. Unlike the General Council Work Programme, which India and South Africa have attempted to revitalise in the past year, the JSI does not include all WTO members. For the process to be legally valid, the initiative must either build consensus or negotiate a plurilateral agreement outside the aegis of the WTO.

India and South Africa’s positioning strikes a chord at the heart of the global trading regime: how to balance the sovereign right of states to shape domestic policy with international obligations that would enable them to reap the benefits of a global trading system.

A contested regime

There are several issues upon which the developed and developing worlds disagree. One such issue concerns international rules relating to the free flow of data across borders. Several countries, both within and outside the JSI, have imposed data localisation mandates that compel corporations to store and process data within territorial borders. This is a key policy priority for India. Several payment card companies, including Mastercard and American Express, were prohibited from issuing new cards for failure to comply with a 2018 financial data localisation directive from the Reserve Bank of India. The Joint Parliamentary Committee (JPC) on data protection has recommended stringent localisation measures for sensitive personal data and critical personal data in India’s data protection legislation. However, for nations and industries in the developed world looking to access new digital markets, these restrictions impose unnecessary compliance costs, thus arguably hampering innovation and supposedly amounting to unfair protectionism.

There is a similar disagreement regarding domestic laws that mandate the disclosure of source codes. Developed countries believe that this hampers innovation, whereas developing countries believe it is essential for algorithmic transparency and fairness — which was another key recommendation of the JPC report in December 2021.

India’s choices

India’s global position is reinforced through narrative building by political and industrial leaders alike. Data sovereignty is championed as a means of resisting ‘data colonialism’, the exploitative economic practices and intensive lobbying of Silicon Valley companies. Policymaking for India’s digital economy is at a critical juncture. Surveillance reform, personal data protection, algorithmic governance, and non-personal data regulation must be galvanised through evidenced insights,and work for individuals, communities, and aspiring local businesses — not just established larger players.

Hastily signing trading obligations could reduce the space available to frame appropriate policy. But sitting out trade negotiations will mean that the digital trade juggernaut will continue unchecked, through mega-regional trading agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). India could risk becoming an unwitting standard-taker in an already fragmented trading regime and lose out on opportunities to shape these rules instead.

Alternatives exist; negotiations need not mean compromise. For example, exceptions to digital trade rules, such as ‘legitimate public policy objective’ or ‘essential security interests’, could be negotiated to preserve policymaking where needed while still acquiescing to the larger agreement. Further, any outcome need not be an all-or-nothing arrangement. Taking a cue from the Digital Economy Partnership Agreement (DEPA) between Singapore, Chile, and New Zealand, India can push for a framework where countries can pick and choose modules with which they wish to comply. These combinations can be amassed incrementally as emerging economies such as India work through domestic regulations.

Despite its failings, the WTO plays a critical role in global governance and is vital to India’s strategic interests. Negotiating without surrendering domestic policy-making holds the key to India’s digital future.

Arindrajit Basu is Research Lead at the Centre for Internet and Society, India. The views expressed are personal. The author would like to thank The Clean Copy for edits on a draft of this article.

For more details visit https://cis-india.org/internet-governance/blog/the-hindu-arindrajit-basu-february-8-2022-notes-for-india-as-the-digital-trade-juggernaut-rolls-on

NIPFP Seminar on Exploring Policy Issues in the Digital Technology Arena

Admin — 2019-10-20T07:40:16Z

Anubha Sinha participated in this seminar as a discussant on the "Regulating emerging technologies" panel. The event was held at Indian Institute of Advanced Study, Shimla on October 10 - 11, 2019.

Click to view the agenda here. The session briefs can be seen here.

For more details visit https://cis-india.org/internet-governance/news/nipfp-seminar-on-exploring-policy-issues-in-the-digital-technology-arena

Media Market Risk Ratings: India

Torsha Sarkar, Pranav M Bidare, and Gurshabad Grover — 2022-01-25T13:29:06Z

The Centre for Internet and Society (CIS) and the Global Disinformation Index (GDI) are launching a study into the risk of disinformation on digital news platforms in India, creating an index that is intended to serve donors and brands with a neutral assessment of news sites that they can utilise to defund disinformation.

Introduction

The harms of disinformation are proliferating around the globe—threatening our elections, our health, and our shared sense of facts.

The infodemic laid bare by COVID-19 conspiracy theories clearly shows that disinformation costs peoples’ lives. Websites masquerading as news outlets are driving and profiting financially from the situation.

The goal of the Global Disinformation Index (GDI) is to cut off the revenue streams that incentivise and sustain the spread of disinformation. Using both artificial and human intelligence, the GDI has created an assessment framework to rate the disinformation risk of news domains.

The GDI risk rating provides advertisers, ad tech companies and platforms with greater information about a range of disinformation flags related to a site’s content (i.e. reliability of content), operations (i.e. operational and editorial integrity) and context (i.e. perceptions of brand trust). The findings in this report are based on the human review of these three pillars: Content, Operations, and Context.

A site’s disinformation risk level is based on that site’s aggregated score across all of the reviewed pillars and indicators. A site’s overall score ranges from zero (maximum risk level) to 100 (minimum risk level). Each indicator that is included in the framework is scored from zero to 100. The output of the index is therefore the site’s overall disinformation risk level, rather than the truthfulness or journalistic quality of the site.

Key Findings

In reviewing the media landscape for India, the assessment found that:

Nearly a third of the sites in our sample had a high risk of disinforming their online users.

Eighteen sites were found to have a high disinformation risk rating. This group includes sites that are published in all the three languages in our scope: English, Hindi and Bengali.
Around half of the websites in our sample had a ‘medium’ risk rating. No site performed exceptionally on all fronts, resulting in no sites having a minimum risk rating. On the other hand, no site performed so poorly as to earn a maximum risk rating.

Only a limited number of Indian sites present low levels of disinformation risks.

No website was rated as having a ‘minimum’ disinformation risk.
Eight sites were rated with a ‘low’ level of disinformation risk. Seven out of these websites served content primarily in English, one in Hindi.

The media sites assessed in India tend to perform very poorly on publishing transparent operational checks and balances.

Over one-third of the sites in our sample published little information about their ownership structure, and also failed to be transparent about their revenue sources.
Only ten of the sites in our sample publish any information about their policies on how they correct errors in their reporting.

Association with traditional media did not play a significant factor in determining risk of disinformation.

On average, websites associated with TV or print did not perform any differently when compared to websites that solely serve digital content.

The findings show that on the whole, Indian websites can substantially increase their trustworthiness by taking measures to address these shortfalls in their operational checks and balances. For example, they could increase transparency on the structure of their businesses and have clear policies on how they address errors in their reporting. Both of these measures are in line with universal standards of good journalistic practices, as agreed by the Journalism Trust Initiative.

Click to download the full report here. To read the report in Hindi, click here. The authors extend their thanks to Anna Liz Thomas, Sanah Javed, Sagnik Chatterjee, and Raghav Ahooja for their assistance.

For more details visit https://cis-india.org/internet-governance/blog/gdi-and-cis-torsha-sarkar-pranav-m-bidare-and-gurshabad-grover-july-12-2021-media-market-risk-ratings-india

List of Recommendations on the Aadhaar Bill, 2016 - Letter Submitted to the Members of Parliament

Amber Sinha, Sumandro Chattapadhyay, Sunil Abraham, and Vanya Rakesh — 2016-03-21T08:50:09Z

On Friday, March 11, the Lok Sabha passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016. The Bill was introduced as a money bill and there was no public consultation to evaluate the provisions therein even though there are very serious ramifications for the Right to Privacy and the Right to Association and Assembly. Based on these concerns, and numerous others, we submitted an initial list of recommendations to the Members of Parliaments to highlight the aspects of the Bill that require immediate attention.

Download the submission letter: PDF.

Text of the Submission

On Friday, March 11, the Lok Sabha passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016. The Bill was introduced as a money bill and there was no public consultation to evaluate the provisions therein even though there are very serious ramifications for the Right to Privacy and the Right to Association and Assembly. The Bill has made it compulsory for all Indian to enroll for Aadhaar in order to receive any subsidy, benefit, or service from the Government whose expenditure is incurred from the Consolidate Fund of India. Apart from the issue of centralisation of the national biometric database leading to a deep national vulnerability, the Bill also keeps unaddressed two serious concerns regarding the technological framework concerned:

Identification without Consent: Before the Aadhaar project it was not possible for the Indian government or any private entity to identify citizens (and all residents) without their consent. But biometrics allow for non-consensual and covert identification and authentication. The only way to fix this is to change the technology configuration and architecture of the project. The law cannot be used to correct the problems in the technological design of the project.
Fallible Technology: The Biometrics Standards Committee of UIDAI has acknowledged the lack of data on how a biometric authentication technology will scale up where the population is about 1.2 billion. The technology has been tested and found feasible only for a population of 200 million. Further, a report by 4G Identity Solutions estimates that while in any population, approximately 5% of the people have unreadable fingerprints, in India it could lead to a failure to enroll up to 15% of the population. For the current Indian population of 1.2 billion the expected proportion of duplicates is 1/121, a ratio which is far too high. [1]

Based on these concerns, and numerous others, we sincerely request you to ensure that the Bill is rigorously discussed in Rajya Sabha, in public, and, if needed, also by a Parliamentary Standing Committee, before considering its approval and implementation. Towards this, we humbly submit an initial list of recommendations to highlight the aspects of the Bill that require immediate attention:

Implement the Recommendations of the Shah and Sinha Committees: The report by the Group of Experts on Privacy chaired by the Former Chief Justice A P Shah [2] and the report by the Parliamentary Standing Committee on Finance (2011-2012) chaired by Shri Yashwant Sinha [3] have suggested a rigorous and extensive range of recommendations on the Aadhaar / UIDAI / NIAI project and the National Identification Authority of India Bill, 2010 from which the majority sections of the Aadhaar Bill, 2016, are drawn. We request that these recommendations are seriously considered and incorporated into the Aadhaar Bill, 2016.
Authentication using the Aadhaar number for receiving government subsidies, benefits, and services cannot be made mandatory: Section 7 of the Aadhaar Bill, 2016, states that authentication of the person using her/his Aadhaar number can be made mandatory for the purpose of disbursement of government subsidies, benefits, and services; and in case the person does not have an Aadhaar number, s/he will have to apply for Aadhaar enrolment. This sharply contradicts the claims made by UIDAI earlier that the Aadhaar number is “optional, and not mandatory”, and more importantly the directive given by the Supreme Court (via order dated August 11, 2015). The Bill must explicitly state that the Aadhaar number is only optional, and not mandatory, and a person without an Aadhaar number cannot be denied any democratic rights, and public subsidies, benefits, and services, and any private services.
Vulnerabilities in the Enrolment Process: The Bill does not address already documented issues in the enrolment process. In the absence of an exhaustive list of information to be collected, some Registrars are permitted to collect extra and unnecessary information. Also, storage of data for elongated periods with Enrollment agencies creates security risks. These vulnerabilities need to be prevented through specific provisions. It should also be mandated for all entities including the Enrolment Agencies, Registrars, CIDR and the requesting entities to shift to secure system like PKI based cryptography to ensure secure method of data transfer.
Precisely Define and Provide Legal Framework for Collection and Sharing of Biometric Data of Citizens: The Bill defines “biometric information” is defined to include within its scope “photograph, fingerprint, iris scan, or other such biological attributes of an individual.” This definition gives broad and sweeping discretionary power to the UIDAI / Central Government to increase the scope of the term. The definition should be exhaustive in its scope so that a legislative act is required to modify it in any way.
Prohibit Central Storage of Biometrics Data: The presence of central storage of sensitive personal information of all residents in one place creates a grave security risk. Even with the most enhanced security measures in place, the quantum of damage in case of a breach is extremely high. Therefore, storage of biometrics must be allowed only on the smart cards that are issued to the residents.
Chain of Trust Model and Audit Trail: As one of the objects of the legislation is to provide targeted services to beneficiaries and reduce corruption, there should be more accountability measures in place. A chain of trust model must be incorporated in the process of enrolment where individuals and organisations vouch for individuals so that when a ghost is introduced someone has can be held accountable blame is not placed simply on the technology. This is especially important in light of the questions already raised about the deduplication technology. Further, there should be a transparent audit trail made available that allows public access to use of Aadhaar for combating corruption in the supply chain.
Rights of Residents: There should be specific provisions dealing with cases where an individual is not issued an Aadhaar number or denied access to benefits due to any other factor. Additionally, the Bill should make provisions for residents to access and correct information collected from them, to be notified of data breaches and legal access to information by the Government or its agencies, as matter of right. Further, along with the obligations in Section 8, it should also be mandatory for all requesting entities to notify the individuals of any changes in privacy policy, and providing a mechanism to opt-out.
Establish Appropriate Oversight Mechanisms: Section 33 currently specifies a procedure for oversight by a committee, however, there are no substantive provisions laid down that shall act as the guiding principles for such oversight mechanisms. The provision should include data minimisation, and “necessity and proportionality” principles as guiding principles for any exceptions to Section 29.
Establish Grievance Redressal and Review Mechanisms: Currently, there are no grievance redressal mechanism created under the Bill. The power to set up such a mechanism is delegated to the UIDAI under Section 23 (2) (s) of the Bill. However, making the entity administering a project, also responsible for providing for the frameworks to address the grievances arising from the project, severely compromises the independence of the grievance redressal body. An independent national grievance redressal body with state and district level bodies under it, should be set up. Further, the NIAI Bill, 2010, provided for establishing an Identity Review Committee to monitor the usage pattern of Aadhaar numbers. This has been removed in the Aadhaar Bill 2016, and must be restored.

Endnotes

[1] See: http://cis-india.org/internet-governance/blog/Flaws_in_the_UIDAI_Process_0.pdf.

[2] See: http://planningcommission.nic.in/reports/genrep/rep_privacy.pdf.

[3] See: http://164.100.47.134/lsscommittee/Finance/15_Finance_42.pdf.

For more details visit https://cis-india.org/internet-governance/blog/list-of-recommendations-on-the-aadhaar-bill-2016

Iron out contradictions in the Digital India programme

sumandro — 2015-07-28T01:04:28Z

The Digital India initiative takes an ambitious 'Phir Bhi Dil Hai Hindustani' approach to develop communication infrastructure, government information systems, and general capacity to digitise public life in India. I of course use 'public life' in the sense of the wide sphere of interactions between people and public institutions.

The article was published in the Hindustan Times on July 15, 2015.

The 'Phir Bhi Dil Hai Hindustani' approach involves putting together Japanese shoes, British trousers, and a Russian cap to make an entertainer with a pure Indian heart. In this case, the analogy must not be understood as different components of the initiative coming from different countries, but as coming from different efforts to use digital technologies for governance in India.

It is deploying the Public Information Infrastructure vision, inclusive of the National Optical Fibre Network (now renamed as BharatNet) and the national cloud computing platform titled Meghraj, so passionately conceptualised and pursued by Sam Pitroda. It has chosen the Aadhaar ID and the authentication-as-a-service infrastructure built by Nandan Nilekani, Ram Sewak Sharma, and the team, as the identity platform for all governmental processes across Digital India projects. It has closely embraced the mandate proposed by Jaswant Singh led National Task Force on Information Technology and Software Development for completely electronic interface for paper-free citizen-government interactions.

The digital literacy and online education aspects of the initiative build upon the National Mission on Education through ICT driven by Kapil Sibal. Two of the three vision areas of the Digital India initiative, namely 'Digital infrastructure as a utility to every citizen' and 'governance and service on demand,' are directly drawn from the two core emphasis clusters of the National e-Governance Plan designed by R. Chandrashekhar and team, namely the creation of the national and state-level network and data infrastructures, and the National Mission Mode projects to enable electronic delivery of services across ministries.

And this is not a bad thing at all. In fact, the need for this programmatic and strategic convergence has been felt for quite some time now, and it is wonderful to see the Prime Minister directly addressing this need. Although, while drawing benefits from the existing programmes, the DI initiative must also deal with the challenges inherited in the process.

Recently circulated documents describes that the institutional framework for Digital India will be headed by a Monitoring Committee overseeing two main drivers of the initiative: the Digital India Advisory Group led by the minister of communication and information technology, and the Apex Committee chaired by the cabinet secretary. While the former will function primarily through guiding the implementation works by the Department of Electronics and Information Technology (DeitY), the latter will lead the activities of both the DeitY and the various sectoral ministries.

Here lies one possible institutional bottleneck that the Digital India architecture inherits from the National e-Governance Plan. Putting the DeitY in the driving seat of the digital transformation agenda in parallel with all other central government departments indicate an understanding that the transformation is fundamentally a technical issue. However, most often what is needed is administrative reform at a larger scale, and re-engineering of processes at a smaller scale.

Government agencies that have addressed such challenges in the past, such as the department of administrative reforms and public grievances, is not mentioned explicitly within the institutional framework, and instead DeitY has been trusted with a range of tasks that may be beyond its scope and core skills.

The danger of this is that the Digital India initiative will end up initiating more infrastructural and software projects, without transforming the underlying governmental processes. For example, the recently launched eBasta website creates a centralised online shop for publishers of educational materials to make books available for teachers to browse and select for their classes, and for the students to directly download, against payment or otherwise. The website has been developed by the Centre for Development of Advanced Computing and DeitY. At the same time, the ministry of human resource development, which is responsible for matters related to public education, has already collaborated with the Central Institute of Educational Technology and the Homi Bhabha Centre for Science Education in TIFR to build a comprehensive platform for multi-media resources for education – the National Repository of Open Educational Resources. The initial plans of the DI initiative are yet to explicitly recognise that the key challenge is not in building new applications and websites, but aligning existing efforts.

This mismatch, between what the Digital India initiative proposes to achieve and how it plans to achieve it, is further demonstrated in the 'e-Governance Policy Initiatives under Digital India' document. The compilation lists the key policies to govern designing and implementation of the Digital India programmes, but surprisingly fails to mention any policies, acts, and pending bills approved or initiated by any previous government. This is remarkably counter-productive as the existing policy frameworks, such as the Framework for Mobile Governance, the National Data Sharing and Accessibility Policy, and the Interoperability Framework for e-Governance, are suitably placed to complement the new policies around use of free of open source softwares for e-governance systems, so as to ensure their transparency, interoperability, and inclusive outreach. Several pending bills like The National Identification Authority of India Bill, 2010, The Electronic Delivery of Services Bill, 2011, and The Privacy (Protection) Bill, 2013, are absolutely fundamental for comprehensive and secure implementation of the various programmes under the Digital India initiative.

The next year will complete a decade of development of national e-governance systems in India, since the launch of National e-Governance Plan in 2006. Given this history of information systems sometimes partially implemented and sometimes working in isolation, a 'Phir Bhi Dil Hai Hindustani' approach to digitise India is a very pragmatic one. What we surely do not need is increased contradiction among e-governance systems. Simultaneously, we neither need digital systems that centralise governmental power within one ministry on technical grounds, or expose citizens to abuse of their digital identity and assets due to lack of sufficient legal frameworks.

(Sumandro Chattapadhyay is research director, The Centre for Internet and Society. The views expressed are personal.)

For more details visit https://cis-india.org/internet-governance/blog/hindustan-times-july-15-2015-sumandro-chattapadhyay-iron-out-contradictions-in-the-digital-india-programme

India’s digital check

sunil — 2015-09-15T14:55:47Z

All nine pillars of Digital India directly correlate with policy research conducted at the Centre for Internet and Society, where I have worked for the last seven years. This allows our research outputs to speak directly to the priorities of the government when it comes to digital transformation.

The article was originally published by DNA on July 8, 2015.

Broadband Highways and Universal Access to Mobile Connectivity: The first two pillars have been combined in this paragraph because they both require spectrum policy and governance fixes. Shyam Ponappa, a distinguished fellow at our Centre calls for the leveraging of shared spectrum and also shared backhaul infrastructure. Plurality in spectrum management, for eg, unlicensed spectrum should be promoted for accelerating backhaul or last mile connectivity, and also for community or local government broadband efforts. Other ideas that have been considered by Ponappa include getting state owned telcos to exit completely from the last mile and only focus on running an open access backhaul through Bharat Broadband Limited. Network neutrality regulations are also required to mitigate free speech, diversity and competition harms as ISPs and TSPs innovate with business models such as zero-rating.

Public Internet Access Programme: Continuing investments into Common Service Centres (CSCs) for almost a decade may be questionable and therefore a citizen’s audit should be undertaken to determine how the programme may be redesigned. The reinventing of post offices is very welcome, however public libraries are also in need urgent reinventing. CSCs, post offices and public libraries should all leverage long range WiFi for Internet and intranet, empowering BYOD [Bring Your Own Device] users. Applications will take time to develop and therefore immediate emphasis should be on locally caching Indic language content. State Public Library Acts need to be amended to allow for borrowing of digital content. Flat-fee licensing regimes must be explored to increase access to knowledge and culture. Commons-based peer production efforts like Wikipedia and Wikisource need to be encouraged.

e-Governance: Reforming Government through Technology: DeitY, under the leadership of free software advocate Secretary RS Sharma, has accelerated adoption and implementation of policies supporting non-proprietary approaches to intellectual property in e-governance. Policies exist and are being implemented for free and open source software, open standards and electronic accessibility for the disabled. The proprietary software lobby headed by Microsoft and industry associations like NASSCOM have tried to undermine these policies but have failed so far.

The government should continue to resist such pressures. Universal adoption of electronic signatures within government so that there is a proper audit trail for all communications and transactions should be made an immediate priority. Adherence to globally accepted data protection principles such as minimisation via “form simplification and field reduction” for Digital India should be applauded. But on the other hand the mandatory requirement of Aadhaar for DigiLocker and eSign amounts to contempt of the Supreme Court order in this regard.

e-Kranti — Electronic Delivery of Services: The 41 mission mode projects listed are within the top-down planning paradigm with a high risk of failure — the funds reserved for these projects should instead be converted into incentives for those public, private and public private partnerships that accelerate adoption of e-governance. The dependency on the National Informatics Centre (NIC) for implementation of e-governance needs to be reduced, SMEs need to be able to participate in the development of e-governance applications. The funds allocated for this area to DeitY have also produced a draft bill for Electronic Services Delivery. This bill was supposed to give RTI-like teeth to e-governance service by requiring each government department and ministry to publish service level agreements [SLAs] for each of their services and prescribing punitive action for responsible institutions and individuals when there was no compliance with the SLAs.

Information for All: The open data community and the Right to Information movement in India are not happy with the rate of implementation of National Data Sharing and Accessibility Policy (NDSAP). Many of the datasets on the Open Data Portal are of low value to citizens and cannot be leveraged commercially by enterprise. Publication of high-value datasets needs to be expedited by amending the proactive disclosure section of the Right to Information Act 2005.

Electronics Manufacturing: Mobile patent wars have begun in India with seven big ticket cases filed at the Delhi High Court. Our Centre has written an open letter to the previous minister for HRD and the current PM requesting them to establish a device level patent pool with a compulsory license of 5%. Thereby replicating India’s success at becoming the pharmacy of the developing world and becoming the lead provider of generic medicines through enabling patent policy established in the 1970s. In a forthcoming paper with Prof Jorge Contreras, my colleague Rohini Lakshané will map around fifty thousand patents associated with mobile technologies. We estimate around a billion USD being collected in royalties for the rights-holders whilst eliminating legal uncertainties for manufacturers of mobile technologies.

IT for Jobs: Centralised, top-down, government run human resource development programmes are not useful. Instead the government needs to focus on curriculum reform and restructuring of the education system. Mandatory introduction of free and open source software will give Indian students the opportunity to learn by reading world-class software. They will then grow up to become computer scientists rather than computer operators. All projects at academic institutions should be contributions to existing free software projects — these projects could be global or national, for eg, a local government’s e-governance application. The budget allocated for this pillar should instead be used to incentivise research by giving micro-grants and prizes to those students who make key software contributions or publish in peer-reviewed academic journals or participate in competitions. This would be a more systemic approach to dealing with the skills and knowledge deficit amongst Indian software professionals.

Early Harvest Programmes: Many of the ideas here are very important. For example, secure email for government officials — if this was developed and deployed in a decentralised manner it would prevent future surveillance of the Indian government by the NSA. But a few of the other low-hanging fruit identified here don’t really contribute to governance. For example, biometric attendance for bureaucrats is just glorified bean-counting — it does not really contribute to more accountability, transparency or better governance.

The author works for the Centre for Internet and Society which receives funds from Wikimedia Foundation that has zero-rating alliances with telecom operators in many countries across the world

For more details visit https://cis-india.org/internet-governance/blog/dna-sunil-abraham-july-8-2015-india-digital-check

How does the government track all its legal cases?

praskrishna — 2016-09-14T10:17:07Z

The Legal Information Management and Briefing System , an integral part of the digital India initiative, aims to be a database of all the ongoing cases with the government.

The article by Shreeja Sen published by Livemint on September 13, 2016 has quoted Sunil Abraham.

More than one lakh cases currently exist on a law ministry platform curated in the last 13 months.The Legal Information Management and Briefing System (LIMBS), aimed to be a database of all the ongoing cases with the government as a party, is part of the government’s push towards digital India.

Law secretary Suresh Chandra said this is a big step under the Digital India project, intended to monitor and ultimately reduce spending on government litigation.

“The aim is to conduct cases properly. If our system works, along with the national litigation policy, we will be able to prevent 50% cases before they are even filed,” Chandra said.

According to the government, the project will help reduce delays in filing responses in cases , contempt notices because of such delays and consequent monetary penalties.

The website has also undergone the required security audit under the NIC (national informatics centre), to ensure the data is safe and protected. However, a database like this on the internet comes with its challenges.

“To ensure client confidentiality, communication should be bilateral between lawyer and client and should be encrypted and even watermarked. If this project allows access to documents by multiple stakeholders without encrypting it for the recipient, then if there is any leak, the documents cannot be traced back to the person who was responsible,” said Sunil Abraham, executive director at Centre for Internet and Society, a non-profit research organisation.

The LIMBS project began internally at the ministry of railway sometime in 2013, but was soon expanded as a single platform across ministries. In July 2015, it was hosted on the NIC server. The law ministry, by a gazette notification on 8 February, formally launched LIMBS to monitor cases filed against the Union government.

As of now, there is no special budget allocated for this project, which is being handled in house with a team of eight people – four developers on the technology side and four implementers for the case details. The development of the website is being handled by Ajay Gupta, deputy chief vigilance officer, northern railway. From the law ministry, Spriha Johari is the project director responsible for the website.

As of 12 September, the five ministries with the most uploads on the website were railways (69,469 cases), communications and information technology (7,830), finance (4452), environment (3,189) and defence (2,565).

Every day, nearly 400-500 cases are added to the portal. In all 58 ministries and their 202 departments have been brought under the LIMBS project.

For more details visit https://cis-india.org/internet-governance/news/livemint-september-13-2016-shreeja-sen-how-does-govt-track-all-its-legal-cases

FAQ on the Aadhaar Project and the Bill

Elonnai Hickok, Vanya Rakesh, and Vipul Kharbanda — 2016-04-13T14:06:43Z

This FAQ attempts to address the key questions regarding the Aadhaar/UIDAI project and the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 (henceforth, Bill). This is neither a comprehensive list of questions, nor does it contain fully developed answers. We will continue to add questions to this list, and edit/expand the answers, based on our ongoing research. We will be grateful to receive your comments, criticisms, evidences, edits, suggestions for new answers, and any other responses. These can either be shared as comments in the document hosted on Google Drive, or via tweets sent to the information policy team at @CIS_InfoPolicy.

To comment on and/or download the file, click here.

For more details visit https://cis-india.org/internet-governance/blog/aadhaar-project-and-bill-faq

Fake Narendra Modi apps aplenty, but it’s up to users to protect themselves

praskrishna — 2016-12-10T04:24:24Z

The app, hosted on Google Play store, automatically gets excessive permission including full network access and ability to take pictures and videos once downloaded.

The article was published by Indian Express on December 2, 2016. Pranesh Prakash was quoted. Also see Nandini Yadav's blog post in BGR on December 3, 2016.

The app, hosted on Google Play store, automatically gets excessive permission including full network access and ability to take pictures and videos once downloaded.

A “Narendra Modi” app, purportedly offered by the Government of India, caught the attention of Internet expert Pranesh Prakash on Thursday as the app developer was found to be using a Bangladesh-based web host and e-mail address. Suggesting that this could be the work of a con-artist, Prakash underlined that granting access to fake apps could lead to security breach. The app, hosted on Google Play store, automatically gets excessive permission including full network access and ability to take pictures and videos once downloaded. The original NaMo, however, only gets access to read, modify and delete the user’s media files. The “fake” app was downloaded more than 1 lakh times and has an average rating of 4.4 from over 2,000 reviews. A simple search on the play store throws up dozens of Narendra Modi apps, some even calling themselves fake apps. The original app was published by Narendramodi.in and Government Of India. But there are scores of other apps trying to imitate the original.

Pranesh, who is Policy Director at The Centre for Internet and Society, also questioned how users can differentiate between fake and genuine apps when even the official app was registered using a gmail address. While the Government of India Narendra Modi app has been published using info@narendramodi.press, the one by Narendramodi.in has been published using a simple Gmail app. He also highlighted how the play store was flooded with fake banking apps, with one such “SBI app” gaining full access to the user’s files. Incidentally, the fake Modi Ki Note app which has been in the limelight since the demonetisation on high value notes and issue of new ones itself has many duplicates.

In the last two days, the Congress and its vice-president Rahul Gandhi fell victim to hacking as their verified Twitter accounts were compromised. Profane content was shared from both accounts, targeting the Gandhi and his family. This lead to the Congress questioning Prime Minister Narendra Modi’s digital India push as security remains a huge concern.

For more details visit https://cis-india.org/internet-governance/news/indian-express-december-2-2016-fake-narendra-modi-apps-aplenty-but-it-is-up-to-users-to-protect-themselves