The Next Play- Block Chain, Sports and Tourism

The excitement and intrigue surrounding cryptocurrency might have fizzled out, but alternate use cases of the blockchain have found roots for varied purposes, such as electronic health records, land records, farm insurance, digital certificates, etc., across as many as thirteen states in the country. 

 

In partnership with a platform called Yunometa, the State of Tamil Nadu recently launched the Women’s Chennai Open in the world of Metaverse and NFTs on September 10, 2022 (https://chennaiopen.co/). With this launch, the synergies between sports and technology are being explored further. Sports enthusiasts will now be able to view the Chennai Open (women) in the metaverse and watch it live. 

The Chennai Open Metaverse will have a tennis court where visitors can choose their avatars, including their favourite players, and play a match. There is also a media section where they can visit and get regular updates on the events’ matches. The metaverse will further have two more sections, i.e., an NFT museum section to display tourism and culture for the State of Tamil Nadu and a section for virtual tours of Tamil Nadu’s most well-known tourist destinations, such as Fort St. George, Meenakshi Temple, and Mahabalipuram Temple, amongst others. 

It seems to be a great initiative not only to enjoy sports in a new way but also to showcase the culture of Tamil Nadu, which may have a ripple effect on the tourism industry.

According to a recent study by Finder, released in 2022, India is ranked first in NFT gaming adoption. As per the report, around 34% of the Indian population has played P2E games[1], while 11% have shown a willingness to play them in the future.[2] Further, the size of the Indian eSports industry is expected to grow to INR 11 billion by FY2025 and potentially generate an economic impact of INR 100 billion between FY2021 and FY2025.[3]

While the statistics paint an impressive picture of the industry’s potential, it would be imperative to note that the legal landscape is definitely ‘glitching’ while trying to adopt a legislative pathway that would foster yet effectively regulate the sector.

At present, the policy focus of the government pertains to taxation only. However, with the increase in the participation of gamers, it is also prudent to address user safety issues by creating guidelines and standards for privacy, fraud prevention, structuring appropriate KYC procedures and payment mechanisms, and ensuring overall ease of doing business, regulatory certainty, and taxes.

The policy initiatives undertaken by the government in the recent past, including the Online Gaming (Regulation) Bill, 2022, which failed to address key concerns such as privacy, age-verification of players, defining casual online gaming, and money-based gaming, have shown a lack of a comprehensive approach to resolving the crucial issues. Similarly, the Inter-ministerial Panel on Online Gaming formed in May 2022 has, till now, only issued a slew of suggestions ranging from issuing a cap on deposit and withdrawal limits on the game winnings to recommending forming a regulatory body to distinguish between “games of skill” and “games of chance,” differential GST treatment, blocking prohibited gaming formats, and issuing a stricter stance on gambling websites.

In addition, the Animation, Visual Effects, Gaming, and Comics Task Force (AVGC) was set up in April this year and commissioned to formulate a national AVGC policy to attract foreign direct investment in the sector and to recommend a national curriculum framework, facilitate skilling initiatives, and boost employment opportunities within the sector has yet to submit its first action plan.

The Draft Virtual Online Sports Regulation Bill released by the Rajasthan government in May 2022[4] seems encouraging since it envisages structuring a licensing regime and establishing a Rajasthan Virtual Online Gaming Commission that shall be tasked with recommending conditions for licences, recognising “self-regulatory organisations,” and issuing advisories, caution notices, and recommendations to self-regulatory organisations. However, the Bill only applies to “esports competitions, fantasy sports, and derivative formats as provided by the sports engagement platforms” and leaves poker, rummy, ludo, and other such games of skill outside its purview.

It is safe to conclude that, at present, the central and the respective state governments have fallen short of formulating a cohesive set of legislation on online gaming. Further, with the integration of blockchain with gaming, it would also be crucial for the government to finally take a stand on laws regulating cryptocurrency in the country.

Shaping a comprehensive regulation on blockchain gaming would also necessitate the concerted deliberation and collaboration of various stakeholders in the industry, as current laws largely fail to address important concerns such as privacy, fraud, user safety, and so on.

References:

[1] Games that require cryptoassets and NFTs for gameplays.

[2] https://economictimes.indiatimes.com/markets/cryptocurrency/india-leads-in-crypto-based-p2e-games-can-it-retain-the-throne/articleshow/92129288.cms?from=mdr

[3] https://www.ey.com/en_in/media-entertainment/the-dawn-of-esports-in-india

[4] https://finance.rajasthan.gov.in/PDFDOCS/REVENUE/10746.pdf

 

Image Credits: Photo by Gerd Altmann from Pixabay 

It is safe to conclude that, at present, the central and the respective state governments have fallen short of formulating a cohesive set of legislation on online gaming. Further, with the integration of blockchain with gaming, it would also be crucial for the government to finally take a stand on laws regulating cryptocurrency in the country.

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The Energy Conservation (Amendment) Bill, 2022 – A Retort to Increasing Emissions

On August 9, 2022, the Energy Conservation (Amendment) Bill, 2022 (the “Bill”) passed the muster of the Lok Sabha (lower house of the Indian Parliament). The Government of India had identified new areas to achieve higher levels of penetration of Renewable energy and the bill sought to enhance demand for renewable energy at the end- use sectors such as Industry, buildings, transport etc.

What demanded the introduction of the Bill?

Decarbonization. The Bill, which amends the Energy Conservation Act, 2001 (the “Act”), introduces a series of modifications that opens the door for sustainable development. According to Bill’s statement of objects and reasons, it aims to, among other things, promote the use of green fuels and the growing renewable energy sector, ensure industrial energy efficiency, and establish a domestic “carbon market”, and carbon trading scheme to fulfil the commitments made by India at COP-26 (Conference of Parties -26) in Glasgow in 2021.

 

What are the major changes proposed in the Bill?

 

The Penalty


To enhance the effectiveness of the law and create stronger deterrence, the bill introduced stricter enforcement mechanisms. The changes include new penalties and aggravation of existing penalties for violations of certain provisions relating to the efficient use of energy and its conservation[1], use of deceptive names (introduced in the Bill)[2], and provision of information[3].

A new penalty introduced, for instance, is that if a vehicle manufacturer fails to comply with fuel consumption standards, he will be liable to pay an additional penalty (in addition to the penalties he is liable to under the Act) per unit of vehicles sold in the corresponding year, as follows:

  • twenty-five thousand rupees per vehicle for non-compliance with norms up to 0.2 litres per 100 km.
  • fifty thousand rupees per vehicle for non-compliance with norms above 0.2 litres per 100 km.[4]


Carbon Credit Trading


The Bill seeks to reduce carbon emissions by creating a carbon credit trading scheme. The Central Government is empowered under Section 14AA of the Bill to specify such a scheme.

Interestingly, the Act has enumerated a scheme through which energy savings certificates are issued by the Central Government to those plants or industrial units whose energy consumption is less than the prescribed norms and standards. Units that are unable to comply with the set energy consumption norms are entitled to purchase the energy savings certificate to ensure compliance. The industrial units that fail to meet the energy savings targets even after purchasing the energy saving certificates are liable to be punished with a fine as per the provisions of the Act.

To understand how a carbon credit trading scheme would aid in reducing emissions, we must understand what a carbon credit trading scheme is. A carbon credit is a certificate/permit that gives its holder the right to emit a certain amount (usually a tonne) of carbon dioxide. Based on historical emissions, carbon credits are provided to an organisation in a particular sector. If the organisation goes over its allocated amount of carbon credits, then it would have to purchase more credits from the carbon market, where carbon credits are bought and sold. And the price of the carbon credit is determined by the market forces of supply and demand. Additional factors that influence the pricing of carbon credits include regulations established by the government, international climate change protocols, emission trading schemes, and a carbon tax. This scheme or system of buying and selling carbon credits is, in simplistic terms, a carbon trading scheme. Hence, the carbon trading scheme aims to reduce carbon/greenhouse gas emissions by assigning a financial cost for causing pollution. This implies that for such units, carbon emissions will now be equivalent to any other capital investment like raw materials or labour.


Expanding, Enlarging, and Empowering


  1. Vehicles and Vessels– The Act, under Section 14, empowers the Central Government to set standards to enable efficient use of energy and its conservation for any equipment, appliance that consumes, generates, transmits, or supplies energy. The Bill seeks to include vehicles (as defined under the Motor Vehicles Act) and vessels into the scope of Section 14. Corresponding provisions for penalties have also been included in the Bill for violations of the provisions of the Act.
  1. Buildings- Under the Act, the Central Government and the Bureau of Energy Efficiency have the authority to lay down energy conservation standards for buildings, ascertained in terms of area. The Bill seeks to amend the provision to the effect that, now, the Bureau and the government shall set energy conservation and sustainable building codes, that shall elaborate upon standards for energy efficiency and conservation, use of renewable energy, and other requirements for green buildings.
  1. Residential Buildings– The energy conservation code in the Act has only been made applicable to commercial buildings. The Bill seeks to include residential buildings along with commercial buildings under the scope of the Code. As per the amended provision of the Bill, the State Governments have also been empowered to lower the load threshold. By bringing residential buildings under the scope of the energy conservation code, the responsibility for ensuring mindful energy consumption would effectively fall on citizens as well as industries.
  1. Composition of BEE Governing Council– The governing council of the Bureau of Energy Efficiency (BEE) created under the Act has twenty, not exceeding twenty-six members, which is intended to be expanded to thirty-one, but not exceeding thirty-seven members by the Bill. This expansion is likely intended to improve bureaucratic efficiency in the administration and enforcement of the provisions of the Act.
  2. State Electricity Regulatory Commission– The Act empowers the Bureau of Energy Efficiency to make regulations as necessitated, with the approval of the Central Government[5]. The Bill also envisages empowering the State Commission to make regulations for discharging its functions under this Act[6].


Concluding Thoughts


The amendments that are envisioned under the Bill are strides in the right direction for enabling better regulation of carbon emissions and promoting the objective of sustainable development by encouraging a switch from fossil fuels to renewable energy sources. While the carbon trading scheme under the Bill has the right intentions, it is still lacking in clarifications pertaining to the market structure and incentive scheme for facilitating carbon trading in the country.

As with any other law, strict enforcement and alignment of all the relevant stakeholders contingent on the success of proposed policies under the Bill would be key in ensuring that India achieves its goals towards facilitating a steady shift from fossil fuels to promotion of new and renewable energy (wind, solar, etc.), accomplishes milestones contemplated in the National Green Hydrogen Mission, and actualizes its vision to meet 50 per cent of its energy requirements from renewable sources by 2030, as envisaged under the ‘Panchamrit’ strategy announced at the COP 26 conference in Glasgow.  

References:

[1] Section 14 clause (c) or clause (d) or clause (h) or clause (i) or clause (k) or clause (l) or clauses (n) and (x); and Section 15 clause (b) or clause (c) or clause (h) of the Act.

[2] Sub-section (1) of Section 13A of the Bill.

[3] Section 52 of the Act.

[4] Second proviso to Section 26 (2) of the Bill.

[5] Section 58 of the Act.

[6] Section 13 of the Bill.

Image Credits: Photo by catazul from Pixabay 

The amendments that are envisioned under the Bill are strides in the right direction for enabling better regulation of carbon emissions and promoting the objective of sustainable development by encouraging a switch from fossil fuels to renewable energy sources. While the carbon trading scheme under the Bill has the right intentions, it is still lacking in clarifications pertaining to the market structure and incentive scheme for facilitating carbon trading in the country.

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The Indian Telecommunication Bill, 2022: An Au Courant Approach

Telegraph was first introduced in India in the year 1851 and telephone exchanges were set up in the early 1880s. The Indian Telegraph Act, 1885; the Indian Wireless Telegraphy Act, 1933; the Telegraph Wires (Unlawful Possession) Act, 1950, were enacted to suit the needs of the day. The usage of the telegraph as a telecommunication mode became obsolete in 2013, and today technologies such as 4G and 5G, the Internet of Things, Industry 4.0, M2M communications, Mobile Edge Computing, etc. are revolutionising the sector.

While these technologies create new opportunities for social and economic growth, issues relating to dispute resolution and penalties, data privacy, the infrastructural needs of the industry, etc. become more complex.

With the objective of reforming the telecommunication law and making it more sensitive towards the concerns of this ever-evolving sector, a consultation paper on the “Need for a new legal framework governing Telecommunication in India”[1] was issued by the Department of Telecommunication on July 23, 2022, inviting comments.

The Consultation Paper proposed a new legal framework to address the following:

  1. Simplification of the regulatory framework while ensuring regulatory certainty, minimising policy disruption, promoting investment, and preventing retrospective application.
  2. Spectrum assignment should be to best serve the common good and widespread access, with utilisation of spectrum liberally and neutrally allowed, as should the deployment of new technologies, the repurposing and rearrangement of frequency range, and the authorisation of the central government to share, trade, lease, and surrender spectrum.
  3. Provide a robust regulatory framework to obtain Right of Way and resolve disputes thereby ensuring the deployment of new technologies and ensuring continuous connectivity.
  4. Simplify the framework for mergers, acquisitions, or other restructuring.
  5. Ensure the license is not suspended or terminated during Insolvency while services are being provided, and ensure there is no default on license or spectrum dues.
  6. Expanding the scope of the Universal Service Obligation Fund to address delivery of telecommunications service to underserved rural and urban areas.
  7. Proportionate penalty for offences.
  8. Address situations of public emergency, public safety, or national security.

The draft Telecommunication Bill 2022 was created in response to public feedback on the consultation paper [2].  Further comments on the draft have been invited till 20th October 2022. It intends to replace the Indian Telegraph Act, 1885; the Indian Wireless Telegraphy Act, 1933; and the Telegraph Wires (Unlawful Possession) Act, 1950.

 

Key Takeaways of the Draft Telecommunication Bill, 2022

 

Over-the-top (OTT)

 

There was an interpretational discord as to whether OTT is regulated under the current legal system. The government is of the opinion that OTT is adequately covered under the definition of “Telegraph” in the Telegraph Act. However, there is no explicit legal backing. The proposed bill explicitly clarifies that OTT communication services are a telecommunication service. The bill’s definition of telecommunication service incorporates current technological trends in the industry and includes voice and video communication services, machine-to-machine services, and broadcasting services. Any transmission and receipt of a message through a wire, radio, optical, or electromagnetic system would be telecommunication. Such telecommunication, when intended to be received by the general public, becomes a broadcasting service. Therefore, an OTT service provider, be it broadcasting/streaming services or data/video call services, falls explicitly within the ambit of the Telecommunications Bill, 2022.

 

User-Beneficial Provisions

The bill requires that the identity of the person sending a message be made available to the user receiving the message at all times. Therefore, any call recipient from a landline, cellular, or through OTT platforms like WhatsApp, Facetime, or Zoom calls will have information about the caller. To achieve this end, the KYC of all the users has to be obtained by all service providers, including OTT platforms.  Users are prohibited from providing false information about their identity when obtaining telecommunications services. Any misrepresentation of identity is punishable with imprisonment for one year or a fine of up to 50,000 rupees. An advertisement or promotional message, whether fictitious or real, shall not be sent unless consent is procured from the recipient. Any unsolicited message shall be an offense, and the sender is liable to be penalized. The Bill formulates a mechanism for the preparation and maintenance of the ‘Do Not Disturb’ register. The user-beneficial provisions and the penalty for violation are not substantial enough. When the losses caused to the public because of cyber frauds are more than 1 lakh crore each year, the penalty for such fraud of INR 50,000 is not a deterrent. It is ideal that such offenders are abstained from providing telecommunication services so that repeated cyber frauds or impersonations can be avoided.

 

Spectrum Allocation

 

The Bill provides that spectrum allocation can be done only through auction, directly under circumstances specified in the schedule, such as national security, or in such a manner as mentioned in the rules. The Hon’ble Supreme Court of India, in “Union of India & Ors v. Centre for Public Interest Litigation and other” decided on February 2, 2012, stated that:

“When it comes to the alienation of scarce natural resources like spectrum, etc., it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.”

The Hon’ble Supreme court’s order mandates spectrum allocation only via auction. However, allocation of Spectrum under extraordinary circumstances such as national security and defence by the Central Government is understandable. Nevertheless, the entire list of Schedule I activities wherein the government is authorized to allocate spectrum to BSNL/MTNL or can assign it to “any other function or purpose as determined” is far too wide to defeat the very purpose of the order.  Further, it is ideal that such spectrum allotted under Schedule I, shall not be resaleable but only returnable to the government.

The Bill provides the Central Government rights to repurpose the spectrum frequency for a different use (“re-farm”), rearrange the frequency range (harmonization), or assign part of the assigned spectrum to another entity for efficient spectrum utilization, or if the spectrum remains unutilized.

 

Seamless Transition 

There is a new set of terms and conditions that will be formed after the Act and rules come into force. A telecom service provider and telecom infrastructure provider have a choice on whether to migrate to the new set of terms and conditions under this bill or the existing terms as per their existing license. A wireless equipment provider has to procure new authorisation (instead of a license). The existing spectrum licenses shall continue to remain valid for a period of 5 years or until the date of expiry, whichever is earlier. The existing rules under the old Telegraph enactments shall continue until superseded by the new rules. All Telecommunication Bill provisions are prospective in nature. These mechanisms would allow greater acceptance of the new Act and a seamless transition.

 

Penalties and Offences

In casesof breach of the terms and conditions of a license, registration, authorisation, or assignment, the government can revoke, suspend, or curtail such approvals. Further, the government can impose a penalty based on the severity of the breach after considering whether it is severe, major, moderate, minor, or non-severe. A licensee can provide a voluntary undertaking to the authority with respect to any breach or delay. Acceptance of a voluntary undertaking will put the proceedings on hold. An alternative dispute resolution mechanism for resolving certain disputes or classes of disputes is envisaged. The Bill provides a list of offences covered by it, the imprisonment or fine imposed, and whether such offences are bailable or cognizable.

 

Right of Way

The mechanism for Right of way is differentiated on the basis of whether it is public property or private property. In the case of public property, the authority has to provide permission in a time-bound manner.  In the case of private property, parties may mutually negotiate an agreement. To overcome the issues of the sale of property along with the telecom infrastructure, an explicit provision has been enshrined to state telecom infrastructure is different from the property it is installed on. Therefore, the property owner cannot claim ownership of the tower in his/her property, and it remains independent of any sale or lease. It is ideal that the Right of Way arrangements/agreements be standardized. Further, the legal framework should also encompass penalties in case of violation of the Right of Way by either the telecom infrastructure provider or the property owner.

 

Common Ducts & Cable Corridors

An express provision is planned under which the Central Government will require infrastructure projects to have common cable ducts and cable corridors established and such cable made available to facility providers on an open access basis.

 

Restructuring & Insolvency

A licensee entity undergoing restructuring/merger/acquisition has to merely inform the authority and an explicit prior approval is not required. The restructured entity has to thereafter follow the rules therein. In case of insolvency, service continuity is given priority, and the entity retains control over Spectrum. An enabling framework has been made for the Central Government to intervene and revert the control of the Spectrum to the Central Government in case the entity fails to provide telecommunications services, and has promptly paid the spectrum licensing fees/charges.

 

Regulatory Sandbox

A regulatory framework of simplified license terms and conditions to empower the start-up ecosystem is formulated, whereby such entities can live-test their products and services in a controlled environment.

 

The Telecommunication Bill is a framework that intends to create a comprehensive and centralised legal ecosystem for an industry that is rapidly expanding with the addition of new players in the market, investments, and technology. How the Telecommunication Act, Digital Data Protection Act, and Digital India Act finally shape up to create a legal landscape to address the new technological challenges remains to be seen. The proposed Telecommunications Bill has addressed the concerns of the present while keeping an eye on the future in its simple, light-touch approach- a concrete step in the right direction.

References:

[1] https://dot.gov.in/sites/default/files/Consultation%20Paper%20final%2023072022-1.pdf?download=1

[2] https://dot.gov.in/sites/default/files/Draft%20Indian%20Telecommunication%20Bill%2C%202022.pdf

 

Image Credits: Photo by Mario Caruso on Unsplash

The Telecommunication Bill is a framework that intends to create a comprehensive and centralised legal ecosystem for an industry that is rapidly expanding with the addition of new players in the market, investments, and technology. How the Telecommunication Act, Digital Data Protection Act, and Digital India Act finally shape up to create a legal landscape to address the new technological challenges remains to be seen.

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The Dawning of Data Centres in West Bengal

It is rightly said that “Data” is the new oil in today’s digital world. Data consumption and cloud-based services have grown exponentially in the past decade, and they are increasing their efficiency by making use of cloud computing and artificial intelligence. Consequentially, the requirement for storage and management of data has grown as well. This demand, along with the government initiatives for digitising India, has given rise to the growth of data centres in the country.

The data centre industry is expected to grow further in the next few years to provide support for the upcoming 5G technology. Data centres require round-the-clock uninterrupted availability of power to operate effectively. However, such requirements inevitably increase carbon-di-oxide emissions. Therefore, there has also been a significant push towards the establishment of “Green Data Centres” – a sustainable solution that is dependent only on renewable energy.

In view of the increasing significance of data, data centers, and the associated regulatory requirements of data localization, the Legislature has also brought about various reforms such as the Digital India programme in order to regulate the entire data industry. However, a comprehensive framework specifically aimed at regulating the construction and operation of data centers is still needed.

 

Concept of Data Centres

 

A data centre is a physical facility that houses all virtual activities and is used to store applications and data, for edge computing, hosting content, and delivering cloud-based services. Data centres cover the three sectors of property, energy, and technology, and thus, various segments such as real estate and construction, hardware equipment, utilities (power, water, cooling), networking, and software services all come within their ambit.

 

National and Global Context

 

The last few years have seen rapid growth in the digital industries such as gaming, Edtech, OTT platforms, e-commerce, etc., in India. These industries are heavily dependent on data centre support. Further, the fast growth in cross-border transactions and the digitisation of transactions has impelled the Indian government to implement data localization mandates in order to ensure data protection and sovereignty. Consequently, global players are now looking to invest in establishing data centres in India, which makes it important to examine the facilities offered to the data centre industry by leading nations in this sector.

 

United States

Different states in the US provide different incentives to investors for setting up data centres. For example, Alabama exempts data centres from sales and property taxes, Hawaii offers job creation incentives, Florida offers industry tax refunds through the Florida Enterprise Zone, and so on.

 

China

China is the world leader in internet consumption; hence, data centres have grown there rapidly. At present, it is placed in the second position in the market capacity of data centres, right after the US. The Chinese Government has incentivised the construction of data centres through the allocation of land for the same and making it available at favourable prices. China’s National Development and Reform Commission has launched a project called “Eastern Data Western Calculation,” which aims to move the data collected from developed regions of the country to less developed ones.  Apart from this, several local governments in the central and western regions of the country offer tax benefits for setting up data centres.

 

Singapore

Singapore has several facilities, such as a country-wide fibre network, a corporate tax exemption for a data centre company under the Pioneer Certificate Incentive, a concessionary tax rate of 5% or 10% for a company under the Development and Expansion Incentive, on-site power plants, dual power feeds, etc. to incentivise the setting up of data centres.

 

Regulatory Framework in India

 

The size of the digital economy in India is estimated to grow from $ 200 billion in 2017-2018 to $ 1 trillion by 2025.

Currently, there is no single legal framework regulating the construction and operation of data centres in India. Several guidelines have been issued from time to time by various government departments relating to the data centre industry. One such draft guideline named “Data Centre Policy 2020” was published by the Ministry of Electronics and Information Technology and proposed to give the status of “infrastructure” to data centres, putting the data centre industry on the same pedestal as roads, railways, and power, which would enable them to avail long-term credit from domestic and international lenders at easier terms. Some of the other salient features proposed by this policy are:

  • Data centres are to be declared an Essential Service under “The Essential Services Maintenance Act, 1968” to enable continued service during calamities or crises.
  • Data centres are to be recognised as a separate category under the National Building Code of India 2016 as they require different norms than other commercial spaces.
  • Four Data Centre Economic Zones (DCEZ) are proposed to be set up by the Government of India, which will host an eco-system of both non-IT and IT infrastructures such as hyper scale data centres, cloud service providers, IT companies, and R&D units.
  • Incentives for setting up data centres will be available to both private sector and public sector Data Centre Parks/Data Centre Developers and Data Centre Operators.

The Telecom Regulatory Authority of India (TRAI) had also published a consultation paper on “Regulatory Framework for Promoting Data Economy Through Establishment of Data Centres, Content Delivery Networks, and Interconnect Exchanges in India,” which provides a list of clearances required to build a data centre, some of which are listed below:

  • Environment Clearance from the Ministry of Environment, Forestry and Climate Change
  • Consent to Establishment from the Metropolitan Development Authority and Central Pollution Control Board
  • Provisional Fire No Objection Certificate (NOC) from the State Fire and Rescue Services/National Fire Protection Association
  • Storm Water Permits and Sewage Discharge Approval from the State Pollution Control Board
  • Tree Cutting NOC from the Central Pollution Control Board: Forest Department
  • Drainage/Garden NOC from the Metro Water Supply and Sewage Board
  • Building Permit/Approvals, and Commencement Certificate from the Metropolitan Development Authority
  • Telecom Permit from the state’s Service Provider/Controller of Communication Accounts
  • Water Supply from Metro Water Supply and Sewage Board
  • Power Connection Feasibility, Design, and Sanction from the State Electricity Board
  • Traffic Approval NOC from the Commissioner of Traffic
  • NOC for High-Rise Structure from Airport Authority of India
  • Registration with DIC from the Director of Industry
  • IEM Registration with the Ministry of Commerce
  • 220kV power connection cable laying from a substation to project premises and 220kV power connection substation testing and charging from the State Electricity Board
  • Form V Approval (Labour) from the Labour Department: State Government
  • Plinth Checking Certificate from the Metropolitan Development Authority
  • Electricity Safety License from the Central Electricity Authority/Chief Electrical Inspector to the Government/Public Works Department Electrical Inspector
  • Elevator Permits and Certification from the Central Electricity Authority/Chief Electrical Inspector to the Government/Public Works Department (PWD) Electrical Inspector
  • Diesel Generator System Approval from the Central Electricity Authority/Chief Electrical Inspector to Government/PWD Electrical Inspector
  • High Speed Diesel (HSD) License from the Petroleum and Explosives Safety Organization/Chief Controller of Explosives Department/PWD: Electrical Inspector
  • Lift Operating Permits from the PWD Lift Inspector
  • Occupancy Certificate from the Metropolitan Development Authority
  • Completion Certificate from the Metropolitan Development Authority
  • Consent to Operate Certification from the Central Pollution Control Board
  • Preliminary Explosive License and Final Explosive License for HSD from Petroleum and Explosives Safety Organization/Chief Controller of Explosives Department

Several states have promulgated their own data centre policies, such as Maharashtra, through its IT/ITES Policy of 2015; Telangana, through its Telangana Data Centre Policy of 2016; Uttar Pradesh, through the Uttar Pradesh Data Centre Policy of 2021; Tamil Nadu, through the Tamil Nadu Data Centre Policy of 2021; Karnataka, through the Karnataka Data Centre Policy, 2022-27 and West Bengal, through the West Bengal Data Centre Policy of 2021.

 

Regulatory Framework in West Bengal

 

On September 6, 2021, the Department of Information Technology and Electronics, Government of West Bengal, introduced the “West Bengal Data Centre Policy 2021,” which will be valid for a period of five years from the date of the notification.

The nodal agency for the proper implementation of this policy is WBEIDC Limited (WEBEL), and they will promote it at both a national and international level.

In 2022, it was announced that the Bengal Silicon Valley Tech Hub being developed at New Town, Rajarhat, is expected to become the main area for the development of the data centre units in the state. The biggest advantage for West Bengal is that the new submarine cable landing station is being developed at Tajpur in West Bengal and ancillary units will be created in the two electronics manufacturing clusters at Kalyani and Falta for supporting the data centres.

Data centre organisations will be classified as “Essential Services,” as has also been proposed in the National Policy.

In order to attract data centre companies to set up data centres in West Bengal, various other incentives have been proposed in the policy. The companies setting up data centres in West Bengal will be entitled to a hundred per cent exemption of stamp duty and registration fees for any transaction relating to the setting up of data centres in the state, and there will also be a waiver of electricity duty from the commencement of commercial activities up to five years.

Among the non-financial incentives, the data centres will also be entitled to:

  • Dual-power grid networks to ensure electricity supply without interruption
  • “Industrial” status is given to electricity supplied to data centres
  • Affordable power backup infrastructure
  • Companies who wish to establish captive firms will get single-window approvals and permits
  • Quality power and internet facilities are to be provided to Edge Data Centres being set up at various IT parks or industrial parks
  • Uninterrupted Power Supply and Internet Connectivity
  • Uninterrupted and high-speed water supply
  • A support system to be provided to set up captive water treatment plants for the Data Centre Parks
  • Extra FAR for data centre buildings.

West Bengal is becoming a lucrative option for setting up new data centres, and various corporate houses such as Reliance Jio, Adani Enterprises, and Hiranandani Group are also in the process of setting up data centres in the state. Several factors need to be taken into account before setting up a Data Centre and real estate is a significant one among them because data centres are one of the most expensive real estate investments. Extensive due diligence should be performed on the project site to ensure that it has a clear title and easy access to transportation and other utilities. In addition to this, all the relevant licenses and permissions should be obtained from the competent authorities to avoid legal issues in the future. Considering the progressive policies implemented by governments at both the central and state levels, it will be interesting to see how the data centre industry develops and how these policies affect it. 

Image Credits: Photo by Akela999 from Pixabay 

West Bengal is becoming a lucrative option for setting up new data centres, and various corporate houses such as Reliance Jio, Adani Enterprises, and Hiranandani Group are also in the process of setting up data centres in the state. Several factors need to be taken into account before setting up a Data Centre and real estate is a significant one among them because data centres are one of the most expensive real estate investments. Extensive due diligence should be performed on the project site to ensure that it has a clear title and easy access to transportation and other utilities.

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Indian Diaspora Being Chosen to Lead Global Companies is No Accident

Mr. Laxman Narasimhan, former CEO of Reckitt Benckiser, was recently appointed CEO of Starbucks Inc. A few days later, advertising and PR giant Ogilvy (part of WPP, the global marketing and communications group) announced the appointment of Ms. Devika Bulchandani as its global CEO. These two are only the latest additions to an already impressive list of Indian-origin CEOs of global business organizations. This list includes blue chip names like Microsoft, Alphabet/Google, Adobe, Deloitte, IBM, Twitter, Bata, FedEx, Arista Networks, Vertex Pharma, Chanel and many more. Leading global VC firms including Masayoshi San’s Softbank have a number of Indians at the helm.

Ms. Indira Nooyi became Pepsico’s CEO in 2006 (and remained in that powerful position till 2018). However, it’s fair to say that the currently visible trend of Indian-origin leaders being appointed CEOs of global enterprises with headquarters outside India began about a decade ago, with the appointment of Mr. Ajay Banga as CEO of Mastercard. Since then, a number of other leaders who were born/raised and studied in India (at least their undergraduate degrees) have been chosen to lead global organizations across industries. All of them qualified with advanced degrees abroad and have spent a significant chunk of time working in overseas markets; most of them are no longer Indian citizens. Nonetheless, it is a matter of pride that no other non-G7 country has contributed as many executives to C-suites across the globe. Admittedly, the technology sector has the highest number of such leaders as CEOs, but companies from other sectors too are following suit.

To me, this trend is not a fad. It is also testament to more than just the intellectual capabilities, global experience or proficiency in English that these Indian-origin executives offer. I believe this phenomenon is also an acknowledgement of the innate ability and willingness of Indians (I use the word loosely because many of these business leaders are no longer Indian citizens) to deal with adversity, crises and rapid changes- all of which are dominant characteristics of our emerging world. These are the very same elements that have shaped the first 25 years of their lives, and taught them to adapt. This point was made more than two decades ago by the late Dr. C. K. Prahalad, who pointed out that those growing up in India quickly learn to be “natural managers” because they have to deal with infrastructural inadequacies, insufficient capacities and other constraints. This helps them develop a solution mindset and think outside the box.  

Given India’s inherent cultural diversity, Indians are more used to coping with diversity in multiple spheres; this helps leaders work in multi-cultural organizations and environments. Such a complex, competitive environment imbues individuals with a certain level of humility- something that probably also has a cultural dimension. Add to all this the fact that Indians working abroad have to work extra hard to prove themselves at every step- and you have a near-perfect recipe for leadership success. Of course, I must also acknowledge the critical role played by the US and other western nations in allowing Indian-origin talent to evolve, mature and shine. Although no society has as yet achieved the perfect balance, these countries are more proactive in promoting merit and providing equal opportunities.

But it would be unfair if I paint a universally rosy picture. Not every Indian leader who has become a CEO has been successful. There will naturally be variations based on a host of factors including the company, industry, external events, timing of becoming the CEO etc. For example, Vishal Garg, CEO of Better.com did not exactly cover himself in glory when he fired 900 employees on a Zoom call. He is back in the saddle of the company he founded. A couple of months ago, Ms. Sonia Syngal resigned as the CEO of Gap Inc. But there have been claims (supposedly backed by studies) that in corporate America, women leaders typically have shorter tenures and are more likely to be forced out when things start going wrong- irrespective of what causes the unravelling and to what extent the CEO could control those factors. But that’s another topic and I must not digress.

New sectors are emerging, driven by scientific and technological innovation. Combined with India’s burgeoning ecosystem and large talent pool, and changes to our education system and shifts in operational models and organizational development paradigms, we as a nation stand at the cusp of a huge opportunity to accelerate our socio-economic progress. It is time for organizations across sectors to rethink how they engage with talent in order to create enriching work environments that remain productive and mutually beneficial at a time when mindsets and aspirations are shifting more rapidly than ever before. Only then can we ensure that home-grown enterprises too are led by committed, dynamic and visionary leaders who can propel India to the US$5 Trillion league at the earliest.

Given India’s inherent cultural diversity, Indians are more used to coping with diversity in multiple spheres; this helps leaders work in multi-cultural organizations and environments.

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Exodus of Indian HNIs: Risk to Aspirations

India’s economy continues to be on a path of sustained growth. Especially over the last decade and a half or so, several factors have contributed to this growth. These include globalization, a large domestic market, policy reforms, technology-driven disruptions, and much greater levels of entrepreneurial activity than in the past fifty years. On the back of a robust start-up ecosystem and a flow of risk capital, 44 unicorns were created in India during 2021; the first four months of 2022 have seen 14 more Indian ventures get that coveted status. This is truly a remarkable achievement in the face of the large-scale shocks the global economic system has suffered in recent times.

It is estimated that over the next decade, the number of Indian millionaires and billionaires (in terms of US dollars) will rise by over 80%. This represents a significantly higher growth rate than that which will be seen by the US, UK, Germany or France. While this is undoubtedly good news, there is also some sobering news: an estimated 8000 high-net-worth Individuals (HNIs) are likely to relocate from India in 2022 alone. In 2019, an estimated 7000 Indians left India.

At different points in time, different destinations have attracted Indian HNIs. At this time, Singapore, Australia and the UAE are the top destinations, although European nations such as Portugal and Greece are also seeing a rise in the number of Indian HNWIs relocating to their jurisdictions given the benefits of lower costs, the mobility advantages of EU member nations and less stringent physical residency requirements. Just as important are the tax regimes of these countries vis-à-vis what prevails in India. More HNIs staying in India for an adequate number of days in each financial year is helpful in bringing their global income under Indian tax. However, it must also be kept in mind that even when families stay in India for shorter durations to minimise their income tax liabilities here, they will end up paying GST on various goods and services they consume.           

A growing number of Indian business families are taking a considered view of where their members should be based, what citizenship(s) they should hold and where their companies should be registered for regulatory and tax purposes. The travel bans imposed at short notice to curb the pandemic has provided one more reason for many to reconsider where their home bases should be. While reasons will naturally vary with specific individuals and families, this trend of wanting to move out is more evident amongst first-generation entrepreneurs, compared to more-established business houses. It is also more prevalent in new age businesses that are built on new technology paradigms and require clarity and relative stability in the regulatory frameworks. This is not to say that western countries are automatically better in this regard: the EU recently announced that device manufacturers must move to standard mobile charging ports (for phones, tablets, cameras, earbuds, etc.) in the next 2 years – a decision that is expected to significantly impact Apple.

As governments take more action against climate change, to protect data privacy and to regulate AI, 5G, etc., new regulations will come into existence at a faster pace than before. More changes to existing rules and regulations can also be expected. There’s also a greater likelihood of new trade blocs forming and countries becoming members of multiple blocs. There is also likely to be greater harmonisation of tax rates (the first steps have already been taken). In the face of such changes, families need to more carefully think through decisions such as the location of businesses, holding structures, governance and multi-jurisdictional estates in order to ensure smooth inter-generational wealth transfers.

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Photo by Monstera: https://www.pexels.com/photo/anonymous-person-magnifying-view-of-coins-shaped-in-world-map-7412098/

A growing number of Indian business families are taking a considered view of where their members should be based, what citizenship(s) they should hold and where their companies should be registered for regulatory and tax purposes. 

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