December 5, 2023

Recently, the Indian government integrated its homegrown AI language tool
–Bhashini with ChatGPT. So, we decided to do it too. This
month’s introductory opener is brought to you by internet’s
most popular AI chatbot!

“Welcome to the latest issue of our tech policy newsletter!
This edition explores budget takeaways for tech, online gaming
regulation, the fight against fake news, and other key topics that
impact the way we interact with technology. Our aim is to provide
you with concise, informative content that will help you stay
up-to-date on the ever-evolving world of technology policy.”
– ChatGPT

On that freakishly accurate note, let’s dive in!

Budget for tech – the Amrit Kaal version

In tandem with the previous year’s budget, the 2023-34 version too has a deep focus on
technology. From data to fintech to startups to foreign investment
to emerging tech – this budget has something for everyone.
The finance minister’s speech also gave a special mention to
India’s unique digital public infrastructure such as CoWin,
UPI, and Aadhar. Read Ikigai’s top tech takeaways from the

Allocation to the IT ministry: The
ministry saw a 47.10% rise in allocations with INR 14,300 crores
sanctioned. The Digital India Mission makes up most of MeitY’s
budget with INR 10,676 crores earmarked for the government’s
flagship digitalisation initiative.

Data embassies enter the chat: Apart
from introducing the ‘National Data Governance Policy’ to
enable access to anonymized data and encourage research and
innovation – the government will also set up ‘data
embassies’. These embassies allow foreign countries to store
data in data centers located in host countries while retaining
jurisdiction over them. They are similar to a diplomatic embassy
– which enjoys immunity from the host country’s laws and
regulations. Countries like Estonia, Bahrain, Monaco, and Luxembourg already have such “embassies” in
place. The Indian government is likely to come out with a policy to govern this. The
how, what and who of these embassies are yet to be defined.

The emerging-tech push: For AI, the
government has placed value on building capacities, encouraging
research, and building cutting-edge applications. It will establish
three AI Centers of Excellence focusing on developing scalable
solutions in sectors such as agriculture, health and sustainable
cities, among others. Also, 100 labs will be set up to develop 5G
applications focusing on smart classrooms, precision farming, and
healthcare. Meanwhile, a national digital library will provide
access to content and books across geographies, languages, genres
and levels.

DigiLocker and KYC: Documents
available in DigiLocker will be expanded and opened to use by
businesses. Now, they can easily share documents with various
authorities, regulators, etc. The KYC process for the financial
sector is expected to be simplified through a risk-based mechanism
– instead of a one size fits all approach.

Online gaming: The government has
introduced new sections to tax net winnings on gaming platforms. It
has removed the TDS threshold of INR 10,000 for online gaming. This
means all winnings will now be taxed at 30% at the end of the
financial year with losses being offset. The government has also
indicated that the GST policy for the sector will be clarified

Welcome to the internet – what would you like to

On 17 January, the IT ministry held a consultation with online
gaming companies, industry associations, and law/policy experts
– on the online gaming amendments to the Information
Technology (Intermediary Guidelines and Digital Media Ethics Code)
Rules, 2021 (IT rules).

Catch up quick: Released in December
2022, the proposal seeks to establish a central framework to protect users
from risks like addiction and financial loss. It introduces due
diligence obligations for online gaming companies – which are
defined as a new and separate class of intermediaries. It also
proposes to develop a self-regulatory mechanism for the sector.
Notably, all intermediaries such as social media platforms, app
stores, etc. must ensure that the online game is registered with a
self-regulatory body before they ‘host, publish or
advertise’ them.

What happened at the consultation? At
the consultation, stakeholders discussed what ‘online
games’ really mean? Would a spin the wheel contest on
an e-commerce platform be covered? The industry called for clarity
around the who, what, and how of self-regulatory bodies. The need
for a graded approach for compliances was also discussed.
Meanwhile, the jury is still out on whether a stringent RBI-like
KYC mechanism for online gaming makes sense. Stakeholders also
sought clarity on the proposal’s conflict with state gaming

Legislative intent: The minister of
state IT, Mr. Rajeev Chandrasekhar shared the government’s
intent to encourage self-regulation in the sector. He clarified
that the proposal aims to completely rule out wagering –
irrespective of whether an online game is that of skill or chance.
For example, betting on a game of chess is prohibited, even if
chess itself is a game of skill. Largely, the government is open to
comments from stakeholders on the definition of ‘online
games’ and other issues.

A consultation, extension and a few days later – attempt
to censor fact check?

Right after the online gaming consultation, the IT ministry released an updated proposal to amend the IT
rules. Now, the government proposes fact-checking you and wants the
Press Information Bureau (PIB) to be the truth referee. Inputs on
this and the gaming amendments can be shared by 20 February.

Satire news channels on YouTube, no
According to the proposal, any content flagged
by PIB or other ‘authorized authority’ as fake or false
will have to be taken down by platforms like Instagram and YouTube.
The government is also open to considering a self-regulatory body
that’ll certify ‘trusted’ fact-checkers. However,
PIB’s fact checking mechanism has been called out in the past
for incorrect flagging of content. For instance, in 2020, Newslaundry listed several social
media posts and news articles that PIB’s fact-checking unit had
‘debunked’ without any valid basis.

The industry view: The Editor’s Guild of India is of the view
that leaving determination of fake news only at the
discretion of the government will lead to censorship of the press.
They have also said that the proposal will make it ‘easier to
muzzle the free press’ and would give PIB limitless powers to
‘force online intermediaries’ to remove content that the
government ‘may find problematic’.

In case you missed it!

  1. Inter-ministerial committee to study need for
    digital competition law:
    The corporate affairs
    ministry has reportedly set up an inter-ministerial
    committee for studying the need for a digital competition act. This
    comes on the heels of the Parliamentary Standing Committee on
    Finance’s report on ‘Anti-competitive practices by
    bigtech companies’. The committee will examine the existing legal framework, the need
    for ex-ante regulations, international best practices to regulate
    digital competition, and practices of ‘Systemically Important
    Digital Intermediaries’. It will be headed by the corporate affairs
    secretary and include other experts and government officials from
    various departments (e.g., IT ministry and consumer affairs

  2. Got a problem with a social media
    The grievance redressal committee under the
    IT rules approved last year has been finally operationalized. The
    IT ministry has appointed officials to the three-tiered
    grievance redressal mechanism which will hear appeals against
    content related decisions of social media platforms. This includes
    officials from the IT ministry, home ministry, and information and
    broadcasting ministry. It also has diverse representatives from
    banks, the Indian Navy and L&T. However, these committees’
    functioning and processes remain unclear.

  3. A common license? The Telecom
    Regulatory Authority of India (TRAI) has published a consultation paper that deals with
    convergence of broadcasting and telecom services owing to emerging
    technologies in the sector. For instance, OTT Communication apps
    provide services similar to fundamental telephony services but are
    not subject to licensing. The paper observes that once 6G comes
    out, satcom players could use the same infrastructure as
    terrestrial telecom players, without the same regulatory
    requirements. The paper lauds the government’s forward thinking
    on the subject with the Draft Indian Telecommunication Bill (Bill).
    With several services covered under the same umbrella, the Bill may
    potentially have the scope of dealing with the converged market. At
    the same time, the paper examines whether there is a need for a
    separate uniform code that provides a wholistic regulatory model to
    deal with convergence of technologies. While regulation is
    critical, TRAI notably recommends putting ease-of-doing-business at
    the heart of such a code, by creating an inter-governmental
    structure with clearly defined roles and responsibilities for each
    stakeholder. Inputs on the paper can be sent by 27 February 2023

  4. Influencer guidelines: The consumer
    affairs ministry released a guide for celebrities and
    ‘virtual influencers’ to ensure they do not mislead their audiences when endorsing products
    or services. Put simply, next time your favorite influencer
    recommends you to buy a moisturizer they received as a PR package
    or got paid to review – they will have to tell you in those
    many words. Interestingly, this comes at a time when the latest
    viral trend on TikTok #de-influencing, which has over 76 million
    views, has thrown open the debate on overconsumption caused by
    social media influencers.

  5. Where are the bills? The budget
    session of the parliament started from 01 February. The Competition
    Amendment Bill 2022 (which was recently examined and adopted by
    the standing committee on finance
    ) has been listed for consideration. Other bills that
    might be discussed include the draft Digital Personal Data Protection Bill and the
    Telecommunication Bill. In addition, the
    Digital India Act is also in its final stages of drafting and may be released
    for public consultation soon. In fact, the government is planning a
    state tour across multiple cities to discuss

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.


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