On June 15, the Minister of State for Finance and Corporate Affairs Anurag Thakur held a pre-budget consultation meeting with representatives of digital economy and start-ups in Delhi to focus on the use of big data, and regulation of the digital economy, amongst other issues. The representatives of digital economy and start-ups highlighted two big challenges before the Indian economy: scaling-up and incentivising research and development within India, and building digital infrastructure.

Participants

  • Government representatives included:
    • Anurag Thakur, Minister of State for Finance and Corporate Affairs
    • Subhash C. Garg, Finance Secretary
    • Girish Chandra Murmu, Expenditure Secretary
    • Ajay Bhushan Pandey, Revenue Secretary
    • Atanu Chakraborty, Secretary, Department of Investment and Public Asset Management
    • Ajay Prakash Sawhney, Secretary, Department of Electronics and Information Technology
    • Aruna Sundarajan, Secretary, Department of Telecommunications
    • Pramod Chandra Mody, Chairman, CBDT
    • P.K. Das, Chairman, CBIC
    • Sanjeev Sanyal, Principal Economic Advisor
  • Educational institutions: Raj Nehru, Vice Chancellor, Shri Vishwakarma Skill University; Dheeraj Sharma, Director, IIM Rohtak
  • Industry associations:
    • H.A.C. Prasad, Secretary General, FKCCI
    • Debjani Ghosh, President, NASSCOM
    • Subho Ray, President, IAMAI
    • Rajiv Mehrotra, Chairman, TEMA
    • T.V. Ramachandran, President, Broadband India Forum
    • Mandeep Singh Puri, Chairman, Electronic and Computer Software Export Promotion Council
    • George Paul, CEO, MAIT
    • Amrit Manwani, President, ELCINA
    • Pankaj Mohindroo, Chairman, India Cellular and Electronics Association
  • Industry: Ujjwal Mathur, Vice President and Country Head, TCS; Prateek Aggarwal, CFO, HCL Technologies Ltd.; Jatin Dalal, CFO, WIPRO; Vishakha Saigal, Vice President, Jio
  • Start-ups: Suraj Sharan, COO, Delhivery

Here are the key talking points:

Digital infrastructure, big data, and the role of government

  • Use big data to improve forecasts of economic, financial and climatic phenomena
  • Enhance public services through data analytics
  • Build big data capacity for MSME sector
  • Develop public services applications to enable efficient citizen-government interactions (NB: This pre-budget discussion occurred a day after Vice President M. Venkaiah Naidu stated that ‘delivery of [government] services needs to significantly streamlined and made as citizen[-]friendly as possible’ using digital technology.)
  • Use AI to streamline health services

Regulation of digital economy, especially privacy

  • Inter-linkages and data sharing within the government, and with private entities (NB: The Aadhaar Amendment Bill, that has been approved by the Union Cabinet and will be introduced in the first session of the Parliament, aims to change how Aadhaar data is shared between the government and private players. If ratified into an act, this will allow private bodies to use Aadhaar for authentication and verification purposes, and simultaneously will abolish Section 57 of the Aadhaar Act that allowed private entities to collect Aadhaar data of individuals.)
  • Continuation of existing tax benefits to digital companies: This ostensibly refers to tax benefits offered to start-ups in the country
  • Differential tax structure for assembled and manufactured goods
  • Reduction in Corporate Tax
  • Angel Tax: In January 2019, industry bodies, including NASSCOM and TiE Global, had written to the government, asking it to abolish the ‘angel tax’. Investments of up to ₹10 crore for start-ups are exempted from the tax.
  • Legislation for data governance
  • Assessing and dealing with digital frauds, especially cross-border digital frauds and deceptive practices; set up an agency to deal with them (NB: The Personal Data Protection Bill, 2018, which is still in the draft stage, focuses on many of these issues. The bill’s focus on data localisation, that the government is actively hailing, both at home and abroad, has emerged as one of the most contentious aspects of the bill.)

Software products

  • Reduce dependence on international software service providers and increased support to domestic software providers (Readers should note that the focus of this discussion aligns with motives of the National Policy on Software Products that seeks to make India a net exporter of software products and heavily invest in the development of native intellectual property.)

Research and Development

Telecom

  • Institute advanced mobile communication
  • Need for separate mobile and fixed landline bandwidth for business and entertainment
  • Industry-friendly review of spectrum auction norms (It is to be noted that in the last fortnight, telecom industry bodies GSMA and COAI have separately called for reasonable spectrum pricing, incentivising investments, and supportive tax policies while allocating 5G spectrum.)