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Year end rant 2016: Technology has never been this political in India


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There’s something deeply worrying with where we’re going with digital, when the founder of India’s (self-proclaimed) largest fintech company stands up on a stage and, in a manner that resembles a rallying cry and all the passion that comes with it, calls it his company’s “pious mission” to make India cashless.

The religiosity of that phrase – “pious” – invariably invokes thoughts of “white man’s burden”, imperialism and conversion that comes with it. Let’s call it “digital man’s burden”, for the lack of a better phrase. What we’ve seen over the last few of years is this concerted push to convert people to digital: the visible aspect of it has been incentives: cashbacks, cheaper products, cheaper cab rides, free calling. The growth in commerce leads to growth in content, leads to growth in usage of the Internet. It’s all good, because at least for the time being, it gives consumers choice. The growth that is now coming in, and is set to come in, is not through incentives but enforcement: people aren’t being given a choice.

We’re seeing this “digital conversion” manifest itself in two ways, both related: firstly, the way Aadhaar is being made mandatory despite how its execution is impacting the poor, in violation of Supreme Court orders. Second, is the way delegitimisation of 86% of the currency in circulation is forcing people to switch to digital currency, despite it being more expensive for citizens, and our infrastructure being incapable of dealing with it. There’s a remarkable lack of empathy – from both the state and the opportunistic founders of companies, or their religious leaders seeding this “pious mission” – when the pain it causes people is being looked at as an “inconvenience”, a period of disruption. There is this bizarre, tech-startup mindset, that the government (or the RBI. Is there a difference?) is being agile with its notifications: that it’s put a plan out there, and based on quick feedback, is iterating. Unfortunately for them, economies aren’t software or products. People don’t starve when Facebook doesn’t upgrade its newsfeed. That entire move-fast-and-break-things philosophy cannot apply to the real world, when it’s people that can get hurt, and lives that get impacted. People have died.

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We’ve gone from technology giving people choice to technology robbing people of choice: the way technology is being implemented by our government today is an attack on freedom and choice.

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Have you heard this phrase “digital colonisation”? The other side of this crusade is this demand for protection against competition for the same businesses, and it has come from the same sources: the fear of digital colonisation in case of Net Neutrality (not a rationale I was comfortable with, by the way), digital colonisation in Ola versus Uber, and in case of Software Patents. There aren’t many places where the phrase “digital colonisation” turns up online in the Indian context, but if you’re in conversation with an iSpirt executive, the phrase invariably does come up, and it goes something like this: In a few years, our authentication will be using fingerprints on Google (Android) and Apple, and to retain India’s sovereignty, we have to ensure that that authentication is ours.

Colonisation is an emotional subject for us in this country, but when you point out that Google and Apple authentication are choices (not mandatory) and the citizen has little protection against the might of the sovereign state (as evidenced by demonetization, by the way), none against the theft or misuse of data, there isn’t a cogent response.

The protectionist angle also came up when it was used to seek government support, as Flipkart’s Sachin Bansal said: “I think what we need to do is what at some level China did: [tell foreign players that] we need your capital, but we don’t need your companies”. Ola’s Bhavish Aggarwal followed it up by asking for protection against “capital dumping”. Both these companies benefited from having raised more capital than others, and did their own capital dumping, allowing their competition to bleed. Now that both are faced with competition which deeper pockets, they want protection. Lets not forget that Flipkart wanted FDI in inventory based ecommerce until they became a marketplace. Now they speak against it, in order to prevent Amazon from bringing its core business to India. There’s a reason why Paytm founder Vijay Shekhar Sharma can say that “The Uber of India is Uber. The Google of India is Google. I can sign it on a wall that the PayPal of India will not be PayPal.” It’s because the company, which has a Payments Banks license, has a regulatory moat which not only protects it from Paypal, but also most of local competition. Payments Banks have another regulatory advantage: they can integrate UPI for payments while wallets are barred. They can raise money while wallets (for the time being), can’t. Their regulatory future is certain, while that of wallets is not. Of course, this is possibly not of their choosing, but they’re making the most of this opportunity.

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Technology has never been this political in India before, and the dog-eat-dog competition in tech becomes a battle between a beast and a pup when politics enters it.

In an interview a year ago, Nandan Nilekani said, India is going through a period of disruption, and “it is up to individual players to take advantage”. There is a window of a digital opportunity in India right now, to make multi-billion dollar businesses. When that opportunity goes to a chosen few who appear on stage on “Startup India, Standup India”, it’s reminiscent of when Russia privatised its factories, and the oligarchs took ownership of key industries to and built multi-billion dollar businesses out of it.

At a private meeting in Bangalore in earlier this year, a key member of a think tank shouted me down when I raised the issues of lack of privacy protection in the (then draft) Aadhaar Bill: “You can’t do anything about the Act. It will be passed before you know it, and nobody will be able to do anything about it.” A couple of weeks later, that’s what happened. They knew.

It’s discomfiting how close the technology industry and government have gotten this year. Lets take iSpirt as an example: unlike most organisations, iSpirt benefits from proximity to TRAI Chairman RS Sharma – the Chairman served along with many iSpirt volunteers in Aadhaar, including Nandan Nilekani. They got early access to Ravi Shankar Prasad, who was pitched to for support for Indian product startup shortly after he became IT Minister in 2014, and Jayant Sinha, current Minister of State for Civil Aviation (previously, Finance), appears to be a regular at iSpirt events. They get meetings at the PMOFlipkart’s payments application was the first to use IndiaStack, which has been set up by iSpirt, and is being used by the National Payments Council of India for enabling UPI payments, but in a manner that is closed to others. As a think tank, iSpirt is doing an exceptional job of pitching to the government and non-government bodies such as the NPCI, which impacts payments.

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It was something to celebrate when this government came into power, because it promised support for growth and “Digital India”. What I’m worried about is that the direction being chosen doesn’t appear to have been decided in a manner that is open and participatory, and there’s a distinct attempt to ignore concerns of those who represent how it impacts people. That the government speaks against a right as fundamental as privacy, to protect a project that is a privacy nightmare, is worrying. That people are dying in queues, or are being deprived of their pensions because of authentication failure, is distressing. These are not inconveniences. We’re heading down the wrong path if we’re compromising on rights in exchange for the growth.

This is a country low on resources, high on demand, always jostling for space. Life here is often like trying to get into a train at Mumbai’s Dadar Station at peak times: you get sucked in and have no control over whether you’ll get in. Unfortunately, I’m idealistic, and I want there to be openness in the way that technology gets deployed; not in a manner that it is an attack on choice. There are questions to be asked about how policy is being made, and who knows that it is going the way it is? Who’s defining the standards, the protocols, and under what circumstances are these choices being made? How does it impact citizens and why are civil society concerns being ignored? We need more openness and transparency, especially because – to invoke another religious metaphor – this push to become digital – has become a crusade.

Lastly, I know that we, as journalists, aren’t doing a good enough job of asking these questions (and more), and this is our failure as well; we’re all jostling for space and struggling for survival too.

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This is the last post on MediaNama this year. Here’s to more freedom in 2017.

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  • srini K

    Excellent rant this! Loved reading it. Technology must facilitate choice and ease of adoption. The desire to change can’t come at the cost of choice. Also, technology is all about democratisation. Was amused to see Flipkart and Ola argue for protectionism now that they have ‘made’ it. They don’t want to give the same stepping stones to others which helped them grow in the first place. The term tech colonisation is so apt!

  • Saurabh Jain

    Inspite of being a fan of Modi’s economic policies in the past and personally knowing Vijay Shekhar Sharma (I am even his big fan), I think this forced digitisation is bad. It will make people hate digital technology just like they started hating population control measures after emergency.

    • Subodh

      If its being forced then I must be living in a different country. Since Nov 8, 70% of my transactions are in cash, and the rest using debit or credit card. I don’t have Paytm on my phone and haven’t felt the need to install it.

      • Saurabh Jain

        Subodh : PayTM is very convenient to use. I am not against it. I am against Government. It did not plan this move and is becoming draconian by the day.

        • Subodh

          You are using words like ‘forced’ and ‘draconian’ loosely. Tell me one draconian step it has taken that is not a temporary measure due to cash crunch.

    • SSR

      Dude who the hell is forcing anything. I do not understand this. Right now cash is low on circulation which will eventually ease in a month or so and then you have all the freedom to use cash where and when you want to. The govt. during this cash crunch is just incentivizing plastic cash so that the habit stays on when the cash shortage is over. This hyperbole is exactly what is disconerting. There is a big difference between less cash economy and a cashless economy and the govt. in the pursuit of a cashless economy hope to settle down to a cashless economy

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  • Sharad Sharma

    Nikhil Pahwa – I wish you’d stop being an armchair critic. Would love it if you and your team offer a better solution.

    Here is how I see things:
    1. Would India go mostly cashless one day (like China and parts of West have done already)? Yes.
    2. If there is no IndiaStack, would India use the Visa/MC system or China (Alipay) system? Yes.
    3. Would that constitute digital colonization? Yes.
    4. Does UPI have a bad design? No.
    5. Has RBI favored UPI or Visa/MC? No.
    6. Have UPI APIs have had a public consultation? Yes.
    7. Has UPI sandbox been given to only a few players? No.
    8. Have PayTM or FK received preferential treatment? No.
    9. Has the overall process related to UPI been open and participatory? Hell, yes!
    10. Was UPI off to a good start even before demonetization? Yes.
    11. Do we need domestic think tanks in India to engage with the Govt. on new country-scale systems? Yes.
    12. Does iSPIRT have anything to do with demonetization? No.
    13. Should going cashless be forced on people? No.
    14. Should Aadhaar be voluntary? Yes.
    15. So, what are we objecting to in this rant? Beats me! IMHO it’s an objection to change in status-quo. Everybody trying to make things better – Banks, Payment Service Providers, Think Tanks, Payment System Provider, Regulator – is a bad guy in this rant.

    Tell me which of these 15 points is wrong.

    Nikhil, finally an emotional plea… You know I respect you. I know you’re trying to make India better. A group of selfless technology volunteers is trying to do the same. Their methods are different from yours but their passion for a better India is no less than yours. Respect them rather than taint them. You have a big bullhorn. Don’t make them your easy targets. You’re bigger than this.

    • I agree with Sharad…and technology is democratizing India–not politicizing it. The country already was politicized to the extreme by corrupt and incompetent governments. Now the populace is being connected and receiving access to the same technologies as the people who held them back.

    • Observor

      1. Would India go mostly cashless one day (like China and parts of West have done already)? Yes – Whoa! China and parts of West are mostly cashless? Since when? Cash to GDP Ratio – China 9% to India’s 13%). China and India had near similar levels till a couple of year s ago. The natural progression of Internet businesses resulted in the ration going down in China.
      2. If there is no IndiaStack, would India use the Visa/MC system or China (Alipay) system? Yes. – Maybe, maybe not; marketplace would adopt the better system, played out on a level playing field without use of political muscle.
      3. Would that constitute digital colonization? Yes. Well yes, we want to use android, have google help us build UPI because it was expedient then, and now suddenly it si digital colonization?
      4. Does UPI have a bad design? No. – Of course it does. By its very construct it seeks to create a ‘layer’ in front of the ‘true owner’ of the customer (i.e. the bank) and allow monetzation by any alternative PSP. That’s a blatant way to transfer shareholder value out of incumbent banks to new players. From a customer experience perspective, UPI is not a patch on existing market solutions of p2p transfer. From a merchant perspective, the current design seeks to lock in the merchant to any one bank. how can all this be good?
      5. Has RBI favored UPI or Visa/MC? No. – Take a look around and see how UPI has gotten pushed irrespective of bank objections to the open items of customer-grievance handling etc.
      6. Have UPI APIs have had a public consultation? Yes – With whom? Maybe with google to help fix the UPI on Android aspects…if it was so discussed, then why would banks have a problem implementing it?
      7. Has UPI sandbox been given to only a few players? No.
      8. Have PayTM or FK received preferential treatment? No….you really want to go there? Is PhonePe’s integration with UPI and the handle associated, the standard way everybody else has been allowed?
      9. Has the overall process related to UPI been open and participatory? Hell, yes! – Has everyone’s viewpoint been given the due weightage?
      10. Was UPI off to a good start even before demonetization? Yes. – Care to share the numbers?
      11. Do we need domestic think tanks in India to engage with the Govt. on new country-scale systems? Yes. This i agree on; we need to have broad based think tanks drawn from amongst market participants
      12. Does iSPIRT have anything to do with demonetization? No. Ok.
      13. Should going cashless be forced on people? No. Ok – and what is your read on what is happening now? Look at Delhi metro.
      14. Should Aadhaar be voluntary? Yes – except that the discrimination by way disadvantaging the non-aadhar person is set to be so high that it is effectively non-voluntary.
      15. So, what are we objecting to in this rant? Beats me! IMHO it’s an objection to change in status-quo. Everybody trying to make things better – Banks, Payment Service Providers, Think Tanks, Payment System Provider, Regulator – is a bad guy in this rant. – In which case you missed the whole point of the article. The debate is around the process and the lack of choice; that is what that makes it draconian!

  • Vinita

    Didn’t expect such a one-sided rant (or a rant, at all!) from Nikhil Pahwa.

  • Choice is an illusion created between those with power and those without. Rest is emotions trapped in Logic.

  • Ajay Kamath

    Its not a rant, its called whining by Nikhil who has made trolling Modi is only profession rather write about events. This write up is sans any logic or evidence, period.

  • Grimmjow

    Rant is a bit incoherent. Some of what you talk about (iSpirit) is not understandable / relatable to most people.

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  • firasd

    I agree completely about the disturbing trends for tech in India. I discuss this issue a bit more here and quote similar recent articles by Jean Dreze & Aruna Roy https://medium.com/@firasd/i-boycott-paytm-5df93d189356