A New Digital Revolution in India: Last Week in India | W35 2021

T K Arun

Last week deserves books that are titled, When India Shook the World, and not because of a sudden rush of medals at the ParalympicsMost Indians were too busy to notice, struggling as they were with floods, Covid-imposed restrictions, cringing in revulsion or, in some cases, thrilling, at Whatsapp videos of mobs forcing frail old Muslim men to chant Jai Sri Ram, and other shenanigans Indian politicians perform without end, including pushing the Taliban, otherwise preoccupied in Afghanistan, into a larger-than-life role in the burgeoning election campaign in Uttar Pradesh.

Even as China announced tough measures to control the use of personal data collected by the growing numbers of Chinese digital giants, India set off a quiet revolution to liberate data and empower people to use data about themselves to seek and acquire benefits. Regulated by the central bank, a bunch of Account Aggregators would now allow people and businesses to accumulate their financial data scattered across multiple and varied entities they deal with, present that data—seamlessly, securely and revocably—to other entities that need that information to sanction a loan, fix an insurance premium, assess the track record of operations or, in future, process a visa application.

Eight banks have already joined the Account Aggregator ecosystem. Goods and Services Tax Network, the agency that manages India’s value-added tax system and sits on data as to who sold what goods or services to whom and at what prices and quantities, is on board, in principle. More and more financial entities will sign up.

This is the fourth leg of the digital empowerment program that India kicked off in 2009 with the unique identity project, Aadhaar. The first Aadhaar card was issued in September 2010. In the meantime, the National Payments Corporation of India (NPCI), set up by the RBI in 2009, had been developing a payments switch that would allow funds to flow from one bank account to another anywhere in the country.

Nandan Nilekani, whom the Congress-led UPA government had roped in to head the Aadhaar project, also created, outside the government framework, a bunch of open APIs that allow anyone to build new processes based on the infrastructure that underpins Aadhaar. API stands for Application Programming Interface, and while it is plain English, it is Greek to most of us outside the Geek world. These are open, standardized protocols of code. Those first four letters of any URL that we key in to reach a website, http, stand for hypertext transfer protocol. We are able to build and use the world wide web only because all websites are built in compliance with that protocol.

In 2011, NPCI rolled out the Aadhaar Payments Bridge and the Aadhaar-enabled payment system. All direct benefit transfers from the government to beneficiary bank accounts use this system. In 2016, NCPI launched UPI, or Unified Payment Interface, the world’s most advanced payment system, interoperable across banks, and e-wallets. GooglePay, PayTM and PhonePe, the most popular digital payment apps in India, all make use of UPI. While the Chinese lead the world in the use of e-wallets, these became interoperable only recently. America and Europe still struggle with the first-mover disadvantage of being stuck in a legacy payments system, creaky and expensive, and should move on to something like UPI.

KYC is a term that most Indians, even the illiterate, understand: it is short for Know Your Customer, the details that a bank wants when it opens or decides not to open an account for you. Aadhaar is sufficient KYC. Based on this piece of regulation, and making use of the IndiaStack APIs, e-KYC has been evolved. A telecom company can verify a customer using e-KYC. The DigiLocker, which can store in the Cloud, to be accessed on your smartphone, all your essential documents such as Aadhaar, Driving Licence, the Income Tax Department’s Permanent Account Number, is another product created out of the IndiaStack APIs.

The present, consent management layer that enables Account Aggregators, is the fourth layer IndiaStack hoped to achieve. Small businesses will now be empowered to convert their data into collateral and secure loans from banks rather than from beady-eyed money lenders who charge extortionate rates and employ rough-and-ready types to collect repayments.

Economy sees revival

The other major development was the release of GDP data for the first quarter of the financial year, that is for April-June. The economy rose by 20.1% over the like quarter in 2020. The government declared a V-shaped recovery. The shape is fine, but the upward sloping arm is a little shorter than the downward-sloping one. The economy had plunged 24.4% in Q1 2020-21, so the growth of 20.1% means that Q1 GDP this year is still smaller than it was in Q1 2019-20.

But the economy has turned the corner and has been growing in both manufacturing and services, as revealed by the respective Purchasing Managers’ Index, which, in the case of services, has been more robust for August than for the past 18 months. Strong GST collections, a 45% spurt in exports, and rising power demand all attest to ongoing recovery. However, the collapse in private consumption revealed by Q1 GDP data continues to reflect in distress sales of gold across India.

The hope is that the pace of vaccination would pick up further, and the economy, fire on all cylinders. It would help, if the government were to spend big now, to boost growth. But the government seems to be waiting for its National Asset Monetisation Pipeline to deliver the funds. Tamil Nadu and Chhattisgarh voiced their opposition to the monetization plan.

Foreign funds continued to flow into India. $2.87 billion poured into equity and debt markets. The stock markets continued their unreasonable rise. All kinds of companies are going public, making IPO hay while the liquidity sun continues to shine.

South African technology investor Naspers, now registered in the Netherlands, has a fintech investing arm called Prosus, whose UPay payments ecosystem acquired India’s oldest digital payment platform, Billdesk for $4.7 billion, making billionaires out of its two founders. The profitable exit this accorded Billdesk’s investors encourages more funding of startups in India, reinforcing India’s status as the third most active startup ecosystem behind the US and China. May our startup tribe multiply!

A faceoff in the renewable energy space

Two corporate developments highlighted a coming faceoff in the renewable energy space. TVS Lucas announced major plans to set up Lithium-Ion battery plants in different parts of the country. At the same time, Reliance Industries Ltd announced its ambition to manufacture green hydrogen at a cost of $1 per kg by 2030. The current cost of green hydrogen (the ‘green’ in that name indicates that the energy required to produce hydrogen, either by splitting water into hydrogen and oxygen or by reforming natural gas, comes from non-polluting sources) is anything between $3.5 and $6.

Hydrogen can be burnt as fuel or used in fuel cells to produce electricity for immediate use, say to drive an electric motor inside a car. Plentiful availability of hydrogen and utilization of the pipeline, storage and distribution network currently in place for fossil fuels would drastically cut down on the use of storage batteries. Store generated power in batteries, or use produce and transport green hydrogen, to decarbonize the economy? Watch this space.

Reliance continued its aggressive diversification, acquiring a genomic sequencing company and its Life Science division seeking Phase 1 trial approval for yet another Covid vaccine.

Anti-national industry!

Continuing a trend of disquiet with and resentment of big business within the Sangh Parivar, manifest in the industries minister calling the Tatas an anti-national group (he later took it back, though), and the Confederation of All-India Traders’, another Sangh Parivar arm, labeling e-commerce platforms anti-national, the Hindi mouthpiece of the Sangh, the Panchajanya, called Infosys, the information technology major in charge of revamping the portal of the income tax department and responsible for glitches on the site, anti-national, speculating whether it is trying to disrupt the Indian economy. It might be small comfort for the Tatas, e-commerce platforms, and Infosys to find themselves in the company of Liberals, Leftists, Secularists, and Muslims, all dubbed anti-national.

Even as sections of the powers that be bash industry in India, the Chinese tested out their multimodal logistics link between Chengdu, an important hub in eastern China, to the Indian Ocean. Cargo from a ship from Singapore that docked at Yangon, Myanmar, was loaded onto trucks and moved to Lincang, a border town in China that has a rail link with Chengdu.

Judicial interventions

Nine judges, including three women, were sworn in as Supreme Court justices, bringing up the strength of the Court to 33 out of the sanctioned 34. The Supreme Court collegium also recommended 68 names for appointment as judges across different high courts. The government is reported to have returned 14 names. The Collegium can recommend them again, and the government is supposed to be bound by the second recommendation. In practice, the government can simply postpone action on the recommendation indefinitely.

Chief Justice NV Ramana criticized the media for its sensationalist, often communal reportage. He was particularly concerned that social media did not have any accountability. This has, in fact, been addressed by the Government, with its intermediary guidelines that also effectively censor online media, and are currently undergoing challenge in the courts.

In another salutary move, the Supreme Court directed mental care institutions to protect the rights of women. The Madras High court, in a similar vein, called upon the government to frame rules to punish policemen who maltreat members of the LGBTQIA+.

In an important pronouncement, in a country where 70% of all those in prison are undertrials, rather than convicts, the Supreme Court observed that arrest should not be the automatic choice after framing charges against an accused. In any normal country, unless an accused poses the threat of flight, witnesses intimidation, evidence destruction, and/or committing another crime, he or she would be granted bail. But not in India.

As if confirming the need for such caution, an Allahabad high court judge denied bail to a man accused of killing a cow and has been in jail for three months. The justice said the cow should be declared the national animal and added, for good measure, that scientists believe the cow is the only animal to produce oxygen when inhaling and exhaling.

If the public were unsettled by this display of scientific temper, dinosaur tracks were discovered in the Thar desert, offering some reassurance that relics from the past are not just a metaphor.

Politics in command

In a positive development, a peace deal has been worked out which six militant groups of the Karbi Anglong in northern Assam. A by-election has been announced in West Bengal so that chief minister Mamata Banerjee can secure a seat in the legislature before the expiry of the six-month deadline after being sworn in as chief minister. A fourth defector from the Trinamool Congress to have been elected as a BJP legislator resigned from the BJP and rejoined the TMC.

India sent its foreign secretary to sue peace with the Taliban. Pakistan sent across the chief of the Inter-Services Intelligence to sue peace among Taliban groups and, reportedly, to secure a prominent place for the Haqqani network in the government to be formed.

Kashmiri separatist leader Syed Ali Shah Geelani died. He was a lynchpin of the separatist movement, and took part in the election campaign in Pakistan, as a spokesman of the ultra-conservative Jamaat e Islami, even as he urged a boycott of elections in Kashmir.

The Indian Council for Historical Research, in its 75th anniversary of Independence poster, left out Nehru. Savarkar found favor with the ICHR. Three texts by left-liberal authors were dropped from Delhi University’s English syllabus. The memorial to the massacre at Jallianwala Bagh was renovated, to make it more ‘touristy,’ to the consternation of those who wanted the memoir to remain austere and true to the memory it sought to keep alive.

Farmers continue their agitation and tried to approach the venue of a meeting in Karnal, attended by the Haryana chief minister. The sub-divisional magistrate, a young IAS officer, was heard instructing policemen not to allow any farmer to break the cordon and to break the heads of those who did. The instruction was diligently carried out. The officer was transferred to a minor role in Chandigarh.

Cricketer-turned-comedian-turned-politician Navjot Singh Sidhu continued to make trouble for the Congress, whose high command, meaning the Gandhi siblings, had forced him on the Punjab party as the state unit chief. Sidhu promises to make the BJP’s work easy, come to the assembly election next year. Facing flak, the high command declined to give Sidhu an audience when he hightailed to Delhi rather than meet with the Congress troubleshooter for Punjab, Harish Rawat.

The Congress has put veteran Digvijaya Singh at the head of a committee to chalk out sustained agitation against the government. Another veteran and leader of the reform-seekers within the party, Ghulam Nabi Azad has been included in another committee formed for year-long celebrations of the 75th anniversary of Independence.

India joins Russia, Serbia, Belarus, and five central Asian countries in Zapad exercises in Russia, focusing on anti-terror action, with Pakistan among eight observers, along with China and Vietnam.

A panchayat, village local government, in Palghat, Kerala has decided to dispense with terms of reverence for its officers. Members of the public are no longer required to address officials as Sir or Madam. They can address them by name or by friendly, informal salutations native to the land. Kerala has not taken to the example set by former Chief Justice Bobde, who refused to take up the scheduled hearing of a case before him because the lawyer did not address him as Your Lordship. The state marches to its own democratic metronome.

In a display of all-conquering self-confidence, a group of eminent people — naturally, politicians with no active role today — have come out with an appeal to the Taliban to conduct themselves democratically. We hope that the same group would address the climate next, and ask it to stop warming and spare us ordinary folk the cloudbursts, flash floods, and forest fires it has been causing.

Covid Update

Across India, 50.3 million vaccines were delivered last week, bringing the total number of doses delivered to 684.6 million. While the active caseload actually went up by 33,784, the bulk of that rise was in Kerala, where the health system copes with these numbers quite well and the case fatality rate continues to be the lowest in the country.

First Published in Substack A New Digital Revolution in India on September 6, 2021.

Read another piece on Politics and Twitter by T K Arun titled Stopping Fakes on Twitter! in IMPRI Insights

Read another piece on COVID-19 Vaccine by T K Arun titled Increasing Vaccine Production: India an Answer to Global Woes in IMPRI Insights

Read another piece on COVID-19 Vaccine by T K Arun titled Bold Vaccination Policy Needed in IMPRI Insights

Read another piece on Israel Palestine Conflict by T K Arun titled Netanyahu Culprit of History? The Politics of Israel- Palestine Conflict in IMPRI Insights

Read another piece on Retrospective Tax by T K Arun titled Asset Monetization, Islamophobia in the Background of Terror in Afghanistan: Last Week in India | W34 2021 in IMPRI Insights

About the Author

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T K ArunConsulting Editor, The Economic Times, New Delhi.