How govt's desire to appease its core voter base could affect businesses

At a recent technology event in the national capital, off-stage conversations were nothing like the usual banter one hears at such gatherings. 

"I hope this Delhi election gets over soon. Actually, it feels like election season all the time. There is no movement on any important policy and we just can't plan," said a policy executive from an online e-commerce firm. The others around the table nodded and agreed. 

This is increasingly the sentiment you will come across if you were to speak to anyone who runs a technology-based business in India today. 

Technology has always been political, but even large corporations are now increasingly investing time and effort in understanding the politics of the country to lobby effectively for their issues. 

For instance, the long-awaited Personal Data Protection Bill. It has been in the works for almost three years now and there is still no clarity on when the Bill will finally become law, and what form it will take. 

The core issue with the legislation — that of data localisation — was being spoken of by the ruling Bharatiya Janata Party (BJP) even before it won the General Election in 2014. At the time, a BJP functionary had said: “We are not forcing them, but it is our opinion that they (tech companies) should bring the data to India.” The party also promised regulatory support. 

In the following six years, the campaign for data localisation, or storing data locally, has gathered steam. While the first draft of the Personal Data Protection Bill mandated local data storage by all data processing entities, the final draft softened the blow on certain conditions. 

The idea of "data is the new oil" has also gathered momentum and the need to control, surveil, and have more access to data has become an important theme, with several policies being introduced by the government. 

The final Bill was introduced in the Lok Sabha on December 11, and referred to a Joint Select Committee, instead of being sent to the Parliamentary Committee on Information Technology, which is headed by Shashi Tharoor, an Opposition leader. 

While Tharoor registered his protest with the Lok Sabha speaker against the move, the technology policy circle was quick to understand the political undertones of the episode. 

"The government knows someone like Tharoor will take a more nuanced view of the Bill. It also knows the joint committee, with a majority of its members from the ruling party and its allies, will likely ensure most of the issues important to the ruling party are not diluted," said a senior policy executive with one of the large technology firms. 

The joint committee is being headed by Meenakshi Lekhi, who is a member of the BJP. In the days immediately after the joint panel was announced, policy circles were abuzz with how things will pan out. 

One of the contentious issues of the Bill is the overarching powers given to the central government to exempt any agency from the provisions of the proposed law. 

"A lot of companies invested in India looking at the state of the economy in the last 10-15 years. Now it just seems like we are going back to the pre-liberalisation era," said a company executive at the technology event mentioned earlier. 

The buzz in technology circles is that the joint panel will probably amend a few rules but not back down on some issues — data localisation, providing anonymised non-personal data to the government for policymaking and better targeting of service delivery, and verification of users by social media firms. 

Other technology experts feel the desire to appease a core voter base will also be detrimental to businesses. "Take for instance what happened when the commerce minister said at an international conference about Amazon investing in India. We all understood he was trying to please the traders before the Delhi Assembly elections, but that is not how the world saw it. This impacts investor sentiment. This may work for the government in the short term, but it will have no long-term gains," said another executive at a top enterprise software company. 

Goyal had said Amazon wasn't doing India any favour by investing a billion dollars in the country. Even though he later clarified and said he was quoted out of context, several national and international publications wrote opinion pieces about the dampening of investor sentiment because of such statements. 

At the end of the day, all that technology firms want is certainty in their business plans. "A long-term certainty in the policy framework is good for innovation and growth because it helps them plan. Business decisions are made for the long term and things have to be defined in clear, unambiguous terms in policies. Multiplicity of agencies and ministries sometimes makes it more difficult. In most cases, growth of the digital economy is guided by light-touch regulation and defining principles than mandatory regulations," said Kumardeep Banerjee, global technology industry trade group ITI (Information Technology Industry) Council's country manager.