Preserving Equality in Online Education

The silver bullet of technology has not only managed to pierce sectors like finance, law, healthcare, etc. but also the predominantly conservative sector of education. Pandemic was the catalyst for steering a range of investments and innovation in the online learning space. Not surprisingly, the industry is set to grow by $2.28 billion during 2022-2026, progressing at a CAGR of 19.50% during the forecast period.[1]

The rapid adoption and need of online education platforms have inspired pedagogical approaches to make tech-based education more engaging and interactive. It is anticipated that integration of blockchain, gamification, artificial intelligence, immersive technologies, learning analytics, etc. will make the online learning experience more adaptative and personalised to the needs of each individual student.

While the world of virtual education may have opened lucrative avenues, its impact dwells differently on students, teachers, schools, parents, and the industry as a whole. 

 

Supreme Court’s View on Online Education

During the pandemic, schools switched to the digital medium, and as such, the right to education was virtually denied to children belonging to the disadvantaged group (DG) or economically weaker section (EWS). The Supreme Court, headed by a three-judge bench of Justices D.Y. Chandrachud, Vikram Nath and B.V. Nagarathna in October 2021, stated that the digital divide, against the backdrop of the COVID pandemic, has produced “stark consequences.”

The top court was hearing a plea by the Action Committee on Unaided Recognised Private Schools in connection with the access to technology by children who are attending online classes and the funding needed for the same. It was a petition filed by the private school managements challenging the Delhi High Court order of September 2020 directing them to provide their 25% quota of EWS/DG students online facilities free of charge. The High Court had said that the schools could get themselves reimbursed from the government.

The Delhi government appealed to the Supreme Court against the High Court’s order, saying it had no resources to reimburse the school for the online gadgets. Though the Supreme Court had stayed the High Court order in February 2021, the bench led by Justice Chandrachud said both the Centre and states like Delhi could not bow out of their responsibilities towards young children.

The court observed that the disparity exposed by online classes had been heart-rending. The technology gap caused by online classes defeated the fundamental right of every poor child to study in mainstream schools. The court also ruled that the right to education for little children hinged on who could afford gadgets for online classes and who could not. Many students had to take temporary breaks, and in the worst case, drop out, due to a lack of resources to access the internet, for online education as their families could not afford them. Moreover, the risk of the children, who dropped out of school, being drawn into child labour or child trafficking was high. The needs of young children, who are the future of the country, cannot be ignored, it said. Though schools were gradually opening due to the receding curve of the pandemic, the need to provide adequate computer-based equipment and access to online facilities for children is of utmost importance.

The needs of young children who represent the future of the nation cannot simply be ignored. A solution must be devised at all levels of Government – State and Centre to ensure that adequate facilities are made available to children across social strata so that access to education is not denied to those who lack resources. Otherwise, the entire purpose of the Right to Education Act, allowing EWS students to learn alongside mainstream students even in unaided schools, will be defeated.

The court further held that Article 21A (the right to free and compulsory education for children aged between 6 and 14) must be a reality. It directed the Delhi government to develop a plan to help children in the EWS category and added that the Centre and State governments should jointly work to develop a realistic and lasting solution to ensure children are not denied education due to lack of resources. The said bench further said: “It is necessary for the Delhi government to come with a plan to uphold the salutary objective of the RTE Act. Centre to also coordinate with state governments and share concurrent responsibilities for the purposes of funding.”

It also appreciated the Delhi High Court’s order directing the Delhi government to provide computer-based equipment and an internet package free of cost to EWS children in private and government schools. The Bench asked the Delhi Government to come out with a plan to effectuate the ‘salutary object’ upheld in the High Court’s decision. The court said the Centre should join in the consultations. The issues raised in the present proceedings will not only cover unaided schools but also government and aided schools. The Bench issued notice in the private school’s management petition and ordered it to be tagged with the pending Delhi Government petition.

 

Guidelines for Digital Education

COVID 19 accelerated the adoption of technology and brought about a dynamic shift in the sector. However, it was also realised that technology may improve the quality of dissemination of education; but it can never replace the classroom teaching and learning experience. While adopting the blended and hybrid model of education, a balance needs to be struck in learning and taking advantage of technology, and helping children become socially and emotionally healthy individuals and responsible citizens.

Bearing that in mind, Pragyata Guidelines for Digital Education were released by the Ministry of Human Resource Development’s Department of School Education and Literacy. At the beginning of the academic year 2021-22, the school education department informed all the schools to follow these guidelines while conducting online classes. According to the guidelines, the maximum screen time per day for kindergarten/preschool students has been limited to 45 minutes. However, for classes 1 to 5, schools can conduct two sessions of 1.5 hours per day for not more than 5 days in a week. For classes 6 to 8, screen time has been limited to 2 hours and for classes 9 to 12, limited to a maximum of 3 hours per day.

 

The Two Sides of Online Learning

Online classes offer a comfortable learning environment for students and offer tremendous growth opportunities, but it does instil a sense of isolation. Students, especially those belonging to younger age groups, thrive in a socially simulated environment. However, given the set-up of online classes, children fail to develop the ability to identify social norms and etiquettes. Further, online classes also limit the time and attention teachers can extend to their students. As a consequence, students that require extra attention and guidance fail to perform well. Also, online education may be accessible, but it is not affordable. Virtual learning requires expensive gadgets like computers, laptops, tablets, or smartphones. Hence, students in the economically weaker sections are left behind.

On the plus side, exhaustion and added costs of commuting are avoided in online education. In addition, online learning platforms offers a variety of courses and programmes that empower students to explore opportunities outside the realm of their curriculum. Moreover, since it is not possible for teachers to constantly monitor the activities of all students, online classes instil a sense of responsibility and self-discipline in them as they are made to realise that their actions and negligence will have a long-term impact on their future.

Mapping and understanding the positives and negatives of online education will enable educational institutes and the ed-tech industry to pioneer strategies for more efficient delivery of education. At the same time, the legislature must take a pro-active stance in ensuring that the fundamental right to education is protected in all manner and forms without any compromise on the well-being of learners.

During the pandemic, schools switched to the digital medium, and as such, the right to education was virtually denied to children belonging to the disadvantaged group (DG) or economically weaker section (EWS). The Supreme Court, headed by a three-judge bench of Justices D.Y. Chandrachud, Vikram Nath and B.V. Nagarathna in October 2021, stated that the digital divide, against the backdrop of the COVID pandemic, has produced “stark consequences.”

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Streamlining the Patent Process in Startups: A Pressing Priority

India has leveraged the startup ecosystem by offering a conducive environment to make them powerhouses of innovation. According to the Economic Survey 2021-22, the number of new recognised start-ups increased to over 14,000 in 2021-22 up from 733 in 2016-17. The survey further emphasized that intellectual property (IP), notably patents, was the key to a robust knowledge-based economy.

Similar to any other business undertaking, startups interact with various stakeholders, including employees, who regularly exchange ideas and develop key IP. Hence, business operations that significantly rely on IP exchange need an optimized and watertight structure of intellectual property rights protection, especially when they aspire to cater to international markets. In line with the growing importance of startups and IP, the government of India has launched the “Start-up India, Stand-up India Scheme” to support early-stage startups.

 

Recognition as a ‘Startup’

 

Entities to qualify as a ‘startup’ need to be recognized by the competent authority under the START-UP INDIA initiative and fulfil all the criteria for the same. For the sake of more clarity, the Department of Promotion of Industry and Internal Trade issued a notification in 2019[1] according to which an entity incorporated as a private limited company, a partnership firm, or a limited liability partnership in India can be considered a startup for up to ten years if its turnover since its incorporation has not exceeded one hundred crore rupees.

Further, such an entity should be actively working towards “innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential for employment generation or wealth creation.” Notably, an entity formed due to restructuring or splitting up an existing business cannot be deemed a startup.

A foreign entity can also be considered a start-up if it fulfils the criteria of turnover and specified period of incorporation/registration and submits a valid declaration to substantiate the requisites as per the provisions of the START-UP INDIA initiative.

 

Minding the IP of Business

 

An important criterion for getting startup registration is that the entity should be working to innovate, develop or improve products, processes or services. To protect technical innovation, patent registration is crucial, especially for startups, where the start-up’s success is tied to the novelty of their product and process. The DPIIT has recognised a total of 69,492 startups to date. In addition, startups have filed a total of 6000+ patent applications.7

A product or process with patent protection helps create a solid business model, enabling them to earn a good market reputation, a return on investment (ROI), and access new opportunities for expansion and generate funds.

To this effect, businesses can undertake the following best practices to optimise their inventions and ideas:

  1. Build an IP culture that drives innovation in the organization. For instance, implementing rewarding ownership strategies, implementing IP incentive schemes, encouraging teams to research and identify areas where valuable IP protection can be secured, etc.
  2. Foster IP awareness within the organization.
  3. Build an IP protection system that is driven by strong policy and practice. Organisations should focus on structuring agile protection strategies that prevent knowledge leaks. Undertaking regular IP audits and compressive risk analysis should be the focus.
  4. Once the IP is protected, its commercialization should be the focus. Additionally, organisations should be aware of their IP infringement and take proactive measures to enforce their rights effectively.

 

Gaining Traction with DPIIT Recognition

 

Benefits from Intellectual Property Rights (IPR)

 

A startup recognised by the DPIIT is eligible for tax breaks on:

  • Prior Turnover
  • Prior Experience
  • Earnest Money Deposit

DPIIT recognised startups can now get listed as sellers on the government e-Marketplace.

Self-certification Under Labour & Environment Laws

  • Startups are allowed to self-certify their compliance with nine labour and three environmental laws for 3 to 5 years from the date of incorporation.
  • In respect of three environmental laws, units operating under 36 white category industries (as published on the website of the Central Pollution Control Board) do not require clearance under three Environment-related Acts for three years. Hence, startups can focus on their core business and keep compliance costs low.

Fund of Funds for Startups (FFS)

  • The government has set up a corpus fund of INR 10,000 Cr. INR 5409.45 cr has been committed to 71 VC firms. In total, INR 5811.29 Cr was invested in 443 startups. 

Faster Exit for Startups

  • As per the Govt Notification, startups are now notified as “fast track firms”, enabling them to wind up the operations of their startups in 90 days.

Seed Fund Scheme

  • Grant up to INR 20 lakh to validate proof of concept, prototype development, or product trials.
  • Grant up to INR 50 lakh for market entry, commercialisation, or scaling up.

Tax Relief

  • Recognised startups are exempted from Income Tax for 3 consecutive years out of the 10 years since incorporation.
  • Startups incorporated on or after April 1 2016, but before April 1 2022, can apply for an income tax exemption under Section 80-IAC of the Income Tax Act.

 

Patent Incentives for Start-ups in India

 

Patent Facilitators

 

The government has identified over 226 local patent facilitators[2] to extend their expertise to DPIIT-recognised startups. The government would reimburse these facilitators for their services.

Patent facilitators are responsible for:

  • Providing general advisory services on a pro bono basis
  • Providing pro bono assistance with IPR filings
  • Assisting with the filing and disposal of IP applications at the National IP offices under CGPDTM
  • Drafting specifications (provisional and final)
  • Preparing and filing responses to examination reports and other queries, notices or letters by the IP offices
  • Appearing at hearings as may be scheduled
  • Contesting opposition, if any, by other parties
  • Final disposal of the IP application. 

 

Fee

 

The government has provided 80% rebate on the patent filing fee to make the process more attractive.

 

Expedited patent registration process:

 

Expedited Examination can be made by filing Form 18A accompanied by Form 9 (Publication). A request filed under a Regular Examination request via Form 18 (rule 24B) can be converted to an Expedited Examination by submitting Form 18A and Form 9.

The IPO has significantly reduced the duration of the patent timeline.

  • Publication: Within 1 month from the date of filing of Form 9.
  • Issuance of the First Examination Report (FER) to the Applicant: Within one month, but no more than two months, from the date the patent application is assigned to the Examiner; and within 45 days from the date, the Examiner submits the FER to the Patent Controller.
  • Response to the First Examination Report by Applicant: Within 6 months of receiving the FER from the IPO.
  • Disposal of the First Examination Report (FER) by the Controller: Within 3 months from the receipt of the last reply from the Applicant.

 

Conclusion

 

The objective of innovation and promoting patent filing by startups is simple, i.e., a patent is directly related to innovation and contributes to significant economic growth for a startup. The upsurge of startups has also led to massive employment generation, with over 5,60,000 jobs in 2016-2020. Hence, it is imperative to have an enabling ecosystem where entrepreneurs are encouraged to file more IPs seamlessly. While launching incentivized schemes and actively working towards reducing the compliance burden for new businesses when filing IP applications is a step in the right direction, there is still a pressing need to address the issues of procedural delays and complex patent processes to tap into the intellectual prowess of the country.

The objective of innovation and promoting patent filing by startups is simple, i.e., a patent is directly related to innovation and contributes to significant economic growth for a startup. The upsurge of startups has also led to massive employment generation, with over 5,60,000 jobs in 2016-2020. Hence, it is imperative to have an enabling ecosystem where entrepreneurs are encouraged to file more IPs seamlessly.

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The Blockchain Push in the Legal Industry

The transformative power of blockchain technology is visible in many areas. The adoption of decentralised blockchain systems that are arguably more tamper-proof than traditional software systems can greatly benefit the legal services industry too. This process has already begun, with a judge in the UK allowing legal documents to be served using blockchain technologies. Earlier this year, a US court too authorised service of the suit via a “hot wallet” in another cryptoasset case.

Fabrazio D’Aloia, the founder of an online gambling company, sued a cryptocurrency exchange and other cryptobrokerage platforms by claiming that his cryptoassets were fraudulently accessed and cloned. D’Aloia’s suit (in a UK court) claims that the perpetrators used their platform to impersonate another platform and led him to transfer money from his cryptocurrency wallets for what he believed to be legitimate trades. The legal documents were served by transferring a token on a blockchain via wallets that originally belonged to D’Aloia but were stolen or exploited by unknown fraudsters.

Implications of such an allowance by the Courts

Traditionally, suits and notices could only be served via the mechanisms agreed upon by the parties in advance; options included post; in person by a representative; fax; email or other forms of electronic communication. These channels were largely adequate when the identity and contact information of the parties were known or easily traceable. However, in the digital world, many frauds are increasingly being perpetrated by “unknown persons”. Especially in such cases, when the identity of fraudsters/cybercrooks is not known but the suit has to be served, the blockchain route is a useful option because it uses the “digital wallets” compromised by the scamsters to reach them.

The other significant aspect of the UK court’s decision goes beyond communication channels: it recognises that the defendants are “constructive trustees.” This essentially means that cryptoasset exchanges and other intermediaries can be held liable for breach of trust if they do not take the necessary measures to ringfence the underlying cryptoasset. This will be a deterrent and force various players in the crypto industry to be more diligent. Indeed, this may also have implications for digital supply chains in the banking and financial services space as well.

Blockchain can transform many more aspects of the legal industry

Blockchain also has applications in other areas, such as litigation, IPR matters (both applying for patents and resolving disputes by providing evidence of creation, first use, rights management, tracking distribution), etc. Smart contracts can make it easier for artists (singers, painters, writers, etc.) to get paid. Each use case will obviously involve different user personas (roles- e.g., the parties and their lawyers, competent authorities, courts, etc.). Maintaining records of events such as birth, health, marriage, adoption, change in citizenship, death, etc. on the blockchain can make it easier to maintain tamper-proof records. Even property records can be maintained on the blockchain.

Such innovations will save parties and lawyers significant time and effort. This is an important benefit in a country like India, where a lot of time is wasted only because of the inefficiencies in accessing records and verifying their authenticity. The risk of forgery increases the presence of false evidence in various cases, thus leading to protracted legal proceedings. Improving the efficiency of various processes in the justice delivery system can speed up court decisions and reviews of appeals.

It appears that the adoption of blockchain-based paradigms can reduce pendency in various courts across the country- a major challenge for the judiciary that affects not only ordinary citizens but also our country’s reputation in terms of the ease of doing business and speed of delivering justice.

There is a sense of inevitability that the digital revolution will accelerate the evolution of different industry sectors in different ways and at varying times. India, with its large pool of technical talent, is well-positioned to take the lead. Just as our DBT/UPI technology stacks, blockchain solutions too can become attractive to a large chunk of the world. But we have to move fast and in a concerted manner at all levels of our complex judicial system.

The adoption of decentralised blockchain systems that are arguably more tamper-proof than traditional software systems can greatly benefit the legal services industry too.

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India is Innovating Faster than Before - and That’s Good News

India needs to radically rethink and modernize delivery of various public services to improve reach, scale, and quality. I believe this process, which began a decade ago, has gathered momentum in recent days. This, I believe, is the direct result of our innovation ecosystem maturing and scaling rapidly. Two news reports I recently read have reinforced my belief that not only has the pace of technology-led innovation has picked up across sectors in India, it has also become more broad-based.

The first report was on how Narayana Healthcare (founded by renowned cardiac surgeon Dr. Devi Shetty) has fitted 700 beds at its cardiac hospital in Bangalore with sensors. When connected to patients using these beds, these sensors can monitor vital parameters. Data such as each patient’s temperature, blood pressure, SPO2/oxygen levels, pulse rate, ECG, breathing etc. are regularly measured and transmitted to dedicated computers and smartphones. Nurses and doctors can monitor each patient’s health and take quick action as and when necessary.

The idea is not new, as many factories in India (and elsewhere) that have embraced “Industry 4.0” have already gone down a similar path. Real-time data from an array of sensors fitted to various machines on shop floors are securely streamed to devices so that supervisors and managers are instantly alerted to breakdowns, abnormal variations in energy consumption or sub-optimal performance in terms of productivity or quality.

What is perhaps new- or at least becoming more visible across India- is the ability to cross-pollinate ideas and best practices across industries and evolve innovative solutions that are powered by technology so that reliability is improved. Dr. Shetty has often spoken about the impending shortage of healthcare professionals in India, and the need to train youth for jobs as medical technicians, so that the load on doctors is reduced and more patients can get their attention for treatment instead of performing tasks such as conducting tests etc. Dr. Shetty also pointed out that with this new system, nurses will no longer need to awaken sleeping patients just to measure and record vital signs. When innovations like this are replicated across hospitals in India, the quality of care will improve- even in government hospitals. The initial investment too will come down as more companies offer such automated, real-time health monitoring solutions.

A second report that provides evidence in support of my view was on drone startups. Thanks to an expanding vista of applications (e-commerce delivery, telecom, energy, disaster management, defence etc.) and various government policies (PLI, Drone Shakti etc.), this sector is attracting significant investments. Reports suggest that the twelve months ending 30 June 2022 saw twice the number of VC deals related to drones as in the preceding twelve-month period. At an estimated US$87 Million, the quantum of investment too in the 1 July 2021- 30 June 2022 period was more than 3.6X the US$24 Million invested in the preceding year. Trends indicate that India will soon be home to a rapidly-growing vibrant drone industry.

As our world grapples with multiple threats including climate change, a reduced emphasis on traditional models of globalization and new geopolitical fault lines, new technologies in critical areas emerging rapidly. These technologies will soon alter societies and security paradigms. In such a milieu, no country can afford to remain dependent on foreign technology. India must ensure that we build a large, robust and sustainable base of domestic capabilities in areas such as AI/ML, robotics, drones, healthcare, high-tech manufacturing etc.

To keep up with the changes (including in laws, business models/strategies, hybrid working arrangements, war for talent etc.), professional services firms too need to evolve to up their game. Siloed capabilities and solution approaches that worked even five years ago are no longer enough- but that’s perhaps a topic for a future write-up.

India must ensure that we build a large, robust and sustainable base of domestic capabilities in areas such as AI/ML, robotics, drones, healthcare, high-tech manufacturing etc.

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There is a Tide in the Affairs of Men…and Nations too

Three decades ago, the mobile revolution helped India overcome its communication challenges. Today, mobile phones have become a commodity in India. At least feature phones have, even if smartphones haven’t. But if you are old enough to remember India during the mid-1990s, you will know that India’s fixed line telephone density was very low at that time. Getting new telephone connections was tough, and involved waiting periods that often extended to several months. Due to ageing cables, making telephone calls was a challenge, and even when calls were connected, the quality was poor.  

Mobile communication technologies unleashed a powerful revolution that changed all this. Even far-off locations where laying fixed-line cables was a challenge got access to mobile towers and signals. So huge has been the transformative power of mobile technologies that an entire generation of regulatory reforms, business models and lifestyle paradigms all depend on the ubiquitous mobile phone.

Why is this relevant now?

Today, the world is on the threshold of a new breed of technologies such as AI/ML, Robotics, IIoT, Blockchain, Cloud, Analytics, Drones, Autonomous Vehicles, the Metaverse etc. Collectively and individually, these technologies have the potential to transform the world as we know it to a much greater degree. Indeed, the next decade may witness the greatest changes driven by technology in the recorded history of humankind.

The reason why it is important to be cognizant of this and take timely action. There are no established leaders in these areas because the sectors, their impact and tech are still evolving. India as a country has the technical and commercial savvy to harness these new technologies and drive innovations. What is needed is the educational and industrial framework to ensure that students get to acquire and sharpen their expertise in these new areas and start applying them to solving real-world problems. The National Education Policy is one step in this direction, but implementing it in the right way is key. Not just the curriculum, but the whole system of education must change. Internships must become more focused and integrated with the learning process, and not just a certificate-driven activity as it largely has been (and is).

It’s not just the central government that needs to act with alacrity and vision; state governments also need to formulate the right policies and rules to ensure that the country as a whole is able to take advantage of the massive disruption that is occurring all around us. Some states have woken up to this need and are putting in place plans to encourage entrepreneurs and attract investments into key sectors. The initial agreement to set up a chip-making facility in Karnataka is one example- but it’s early days yet, and many more hurdles need to be overcome.

The startup ecosystem, too, needs to readjust its approach to backing ventures in these new areas. Yes, the risk will be higher and the failure rate may be higher, but these ventures must be seen as proving grounds for technologies and ideas. Our private sector must also be ready to make the necessary investments to embrace these new technologies and lead innovation and adoption. Our large IT services industry must accelerate the shift to provide offerings built around these new areas. A lot is already happening, but the pace must pick up. India’s public sector, long regarded as a white elephant, can also play a key role by absorbing these technologies and innovatively deploying them in sectors of national importance, such as energy, agriculture, disaster recovery, infrastructure development, defence etc.

Achieving all this requires macroeconomic stability: inflation under control, relatively stable exchange rates and an adequate money supply. For a number of reasons that are outside the control of our government or individual companies, these conditions may not be met immediately. But as responsible citizens, business leaders, regulators, teachers and parents, each one of us has a role to play. Of course, the executive, the legislature and the judiciary also have their own roles to play.

To quote Brutus from Shakespeare’s play “Julius Caesar”,

“There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures”.

This is very much the situation that much of the world finds itself in at this time. If we in India can rise to the occasion, our continued ascendancy as a power is assured. But there is many a slip between the cup and the lip, and if we squander time and energy on needless and irrelevant issues, it is just as certain that we will not realise our potential. Let us make the right choice.

Image Credits: Photo by Pete Linforth from Pixabay 

Today, the world is on the threshold of a new breed of technologies such as AI/ML, Robotics, IIoT, Blockchain, Cloud, Analytics, Drones and Autonomous Vehicles, the Metaverse etc. Collectively and individually, these technologies have the potential to transform the world as we know it to a much greater degree. Indeed, the next decade may witness the greatest changes driven by technologies in the recorded history of humankind. The reason why it is important to be cognizant of this and take timely action. There are no established leaders in these areas because the sectors, their impact and tech are still evolving.

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The Metaverse and its Numerous Concerns

There is a lot of buzz being generated around the “Metaverse,” which can be defined as a virtual reality-based shared digital world in which users (through their “avatars”) can enjoy three-dimensional, multi-sensory experiences. This rapidly-evolving, technology-driven paradigm is a huge shift away from the present, where digital interactions are based on text, audio and two-dimensional images/videos. The excitement around the Metaverse is due to the immense possibilities that exist around how it can be used for social interactions, commerce, media & entertainment, education, manufacturing, healthcare, defense etc. Not surprisingly, many companies, even in India, are investing in Metaverse capabilities.

While the potential for metaverse cannot be denied, it is just as important to recognize and acknowledge that there are several grey areas around this paradigm. If timely actions to prevent the misuse of the metaverse are not taken by the global community, we run the serious risk of opening a new Pandora’s Box. And once the proverbial genie is released from the bottle, it is virtually impossible (pun intended) to put it back inside.

The Potential Dangers of the Metaverse

 
What are the biggest fears surrounding the Metaverse? Concerns have been expressed from different quarters around issues relating to the privacy, safety and well-being of people who are active in the metaverse. In the current scenario, people use social platforms to connect with each other. If someone with whom I do not wish to engage seeks to connect with me in a basic digital world, I can easily deny the friend request. Even after having granted them permission initially, I can choose to block such persons. During the time they have permission to engage with me, the worst that can happen is that they send unwanted texts, audio messages or images and videos.

This is bad enough, but in the metaverse, the kind and nature of obscene or harmful content will change drastically; consequently, so will the impact of such material and experiences on vulnerable segments of society. 

For example, in the metaverse, it is quite possible for complete strangers to enter someone else’s personal space – without the latter being aware of who the former is. Given the multi-sensory capabilities of the metaverse, which includes haptic technology (the sense of touch), the experience and impact can be far worse. Arguably, the metaverse (as it exists currently) lends itself more easily to bullying, sexual abuse or intimidation. Indeed, there have been recent media reports that some VR-based games that are accessible to young children contain inappropriate content. 

AI-driven deep fakes can further muddy the waters by creating and distributing patently false content that is almost impossible to detect as fake. There is enough fake information circulating on Whatsapp as it is, think of the danger of content that purportedly shows politicians or others saying things designed to inflame emotions.

NFTs will be key to the evolution and growth of the metaverse, providing owners of physical assets such as paintings and IPR such as rights to music, movies etc. new avenues to monetize them at scale. Cryptocurrencies and tokens are likely to form the principal currency in the metaverse, powering commerce and payments. As of now, cryptocurrencies are anonymous and independent of mainstream banking and financial systems. 

In the absence of regulations that are uniformly enforced globally, such parallel payment systems can be easily misused for illegal and immoral activities and transactions, including child sexual abuse. It is likely that fraud and crimes will increasingly crisscross between the current digital world and the metaverse (and perhaps the physical world), making them harder to detect and bring the perpetrators to book.

Addressing the Issues Surrounding Metaverse 

 

A multipronged approach is key to addressing the potential dangers of the metaverse. It is vital to frame appropriate legislation and arm various regulatory agencies with the power to catch and punish violators is vital. The basic premise around legislation has to be this: if something is illegal or against the law or generally accepted social mores in the “real”, physical world, it must be treated the same way in any parallel “virtual reality” based universe.

However, legislation alone cannot secure the metaverse. It will be essential to hold creators of content and platforms that enable distribution and access responsible for violations. The metaverse infrastructure needs to be designed with more intent to put in place appropriate safety mechanisms right at the beginning. As a global society, we must learn from our experiences with the downsides of social media platforms (false information, cyber-bullying, digital fraud etc.) and take preemptive actions that can prevent problems before they become common. This is significant because changing processes after people have grown accustomed to them is never easy; also, some damage may have already occurred. It may also be necessary to think of ways to incentivize good behaviour in the metaverse.

The metaverse is expected to surge ahead quickly on its evolutionary path. Its trajectory cannot be predicted in advance, therefore, what is needed is constant vigilance and for global action to be taken in a concerted manner. The UN system is supposed to be the primary keeper of international order. A number of events over the past couple of decades have painfully driven home the point that the UN architecture needs an urgent and major overhaul. As part of this exercise, it may be useful to establish a new global body tasked with the responsibility of overseeing and governing the metaverse. Regional political/economic blocs must be encouraged to ensure that their members comply with rules and regulations related to the metaverse.

The metaverse is expected to surge ahead quickly on its evolutionary path. Its trajectory cannot be predicted in advance; therefore, what is needed is constant vigilance and for global action to be taken in a concerted manner.

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Blockchain Arbitration: The Future of Dispute Resolution

The current buzzword- Blockchain has advanced from being a theoretical concept to reaching the sphere of technology where it is shaping today’s society and the legal profession. The field of legal technology has not only streamlined knowledge management requirements and operational aspects of a legal office, but also transformed the way lawyers practice law!

Smart contracts and blockchains have the potential to alter the way documentation and dispute resolution are approached. Hence the concepts need integration, implementation and recognition with arbitration for a more efficient, cost-effective and automated structure.

Smart Contracts, Blockchain and Arbitration

 

These self-executing, new generation contracts are geared towards the realization of predetermined conditions. With the help of smart contracts, Blockchain Arbitration can facilitate storing and verification of rules and automated execution (upon a particular event constituting a breach of the agreement) by invoking the arbitration clause incorporated in the smart contract.

In case of a dispute, the smart contract will notify the Arbitrator via a blockchain-based dispute resolution interface. A party can digitize the terms of an agreement, lock the funds into a smart contract, and condition the intelligent contract so that the task at hand is fulfilled and the funds will pass through. Upon completion of the process, the self-executable nature of the smart contract will automatically enforce the award and transfer the prescribed fee to the Arbitrator.

However, it is yet to be seen how smart contracts shall interact with data protection and privacy laws, intricacies of dispute resolution, and obligations and rights of the parties involved.

Blockchain Technology: An aid to Arbitration?

 

Arbitration aims to be a time-bound and specialized decision-making process. In this backdrop, Blockchain Arbitration theoretically promises to be an ideal structure for the trial process in the following ways:

  • Briefs, Transcriptions & Document Management: The tool in the blockchain system can quickly and efficiently provide synopsis and briefs of the record which would be beneficial not only to the Tribunal but to the parties.
  • Elimination of intermediaries and cost-effectiveness: There shall be no mechanism requiring approval and control at every stage, and the intermediary institutions are not included in the process. For instance, Banks, involved as intermediary institutions in legal and financial transactions, incur costs at every stage of the transaction and are time-intensive in nature.
  • Automation: A blockchain-based dispute resolution platform would exclude oral hearings and the Arbitrator’s decision and automate other aspects of filing of pleadings, filing of documentary evidence, correspondence with the Arbitral Tribunal.
  • Ease in making the Arbitral Award:  Blockchain tools can assist the Tribunals in preparing awards. The tools ensure that all necessary ingredients to make the arbitral award reasoned and enforceable have been taken care of.  The blockchain will continue to prepare the award from the beginning as the arbitration progresses.
  • Confidentiality / Security of Data: Blockchain is the safest way of storing information. Each block will be authenticated by the Arbitral Tribunal and the party to the proceedings. There is no provision for changing, altering or deleting the data unilaterally. It can only be done when it is authenticated by the Arbitral Tribunal and the party to the proceedings. Since third parties are entirely absent from the proceedings, the possibility of breach of data and information is negligible. Disputes arising out of smart contracts can be made confidential which will limit the exposure of the nature of dispute between the parties. Blockchain has a decentralized structure and the security of the system is protected by cryptography.
  • Removal of human error: The reliability and validity of a transaction depend upon the accuracy of the algorithm underlying the transaction. Since, each transaction is based on algorithms, which are mathematical models, it is free from human influence and intervention and, consequently, human error. 

Security and privacy of data are primary concerns in the conventional Arbitral process. In fact, as a specific case representing the flaws of the present model of international arbitration, in July 2015, the website of the Permanent Court of Arbitration was hacked during an essential hearing of maritime border arbitration between China and the Philippines, in the international arbitration of the “Republic of Philippines v. People’s Republic of China.”[1]  

As far as the credibility of blockchain technology in resolving such issues is concerned, the World Economic Forum, in its 2015 survey recognized that by 2025-27, about 10% of the global GDP would be stored in blockchains, owing to its efficient attributes of data security management. By 2025, even taxes are strongly probable to be collected by employing blockchain technology. Moreover,  in its research published in 2018, World Trade Organisation described at length the opportunities that lie ahead in the future, owing to the efficacy associated with the safeguard mechanisms of blockchains. 

Legal Recognition of Blockchain Arbitration and procedure to be adopted

The UNCITRAL Electronic Model Law on Electronic Commerce (1996 Convention) and the ‘UNCITRAL Convention on Electronic Communications in International Contracts (2007 Convention)’ are the primary legal instruments facilitating blockchain contracts.[3]

Articles 6 and 18 of the 2007 Convention assert the validity of on-chain arbitration by allowing for electronic data records and electronic transactions in the arbitration process, thereby providing legal recognition to on-chain arbitrations.

  1. Appointment of an Arbitrator

 Once the notice of arbitration has been sent, the appointment of an arbitrator can be done through blockchain. Thus, the exchange of documents, e-mails, and messages, etc. are all recorded automatically and replicated at all stakeholder’s computers without the involvement of any third party. The case management conference can be done online using a video conferencing facility of blockchain which is recorded and filed in the computers of all stakeholders in original and thereby removing manipulation.

  1. Pleadings

The pleadings including a statement of claim, statement of defense, counterclaims, and reply to counterclaims and further submissions can be submitted online and are automatically served to the parties & the Tribunal along with automated acknowledgment. This ensures timely submissions and helps in maintaining uniformity in the pleadings thus circulated. Any delay will also be penalized in terms of the penalty prescribed by the Tribunal or as agreed by the parties. The fear of ex-parte communication will also be mitigated when the procedural orders and communication by the Tribunal will be auto-delivered to both parties. 

  1. Interim Measures

Interim measures that are sought from courts can be executed on the blockchain if the judicial system of a particular jurisdiction allows for a seamless digital interface with the parties’ computers. In the case of an automated interface with the judicial system, the execution of court orders can also happen immediately provided the jurisdiction’s administrative machinery is using blockchain. 

  1. Recording of Evidence & Preparation of Award

 The efficiency of blockchain can be seen in evidence-taking and award preparation. Witness conferencing, cross-examination, and taking of oral evidence can be easily done using video conferencing suites, or even if hearings are done physically, they can still be transferred on blockchain and stacked for procedural integrity. Statements of expert witnesses, oral submission by experts, and expert communications can be recorded on the blockchain. 

  1. Security of Data

Blockchain is a secure way of storing information because each block is replicated and authenticated by all stakeholders. The provision to alter or delete any data does not exist until authenticated by all stakeholders. In the absence of intervention of a third party, there is no network administrator or supervisor making the possibility of data breach negligible. 

Globally, blockchain technology is being readily resorted to as an effective means of data storage, management, distribution, and transfer. Blockchain technology has immense potential to enhance the efficacy of Arbitral proceedings, especially owing to its mechanism of encryption, which helps secure data.

Contemporary issues in Blockchain Arbitration

The functioning of blockchain arbitration highlights various concerns. Firstly, in an on-chain arbitration, there would be no requirement for oral hearings which are integral to the current justice system and stand at a juxtaposition with the principles of natural justice.

Secondly, an essential principle of arbitration is the underlying idea of confidentiality. Despite the strong protection afforded by blockchain, data privacy can pose a significant concern when an independent third party gets involved as an oracle in dispute resolution. The General Data Protection Regulation (GDPR) provisions are not currently empowered enough to regulate the intricacies in the decentralized functioning of blockchain, which makes it difficult to impose liability on data controllers. Furthermore, the traceable feature of blockchain is again in conflict with the GDPR’s requirement of the “right to be forgotten“.

Thirdly, The New York Convention on the Enforcement of Foreign Arbitral Awards of 1958 (hereinafter referred to as “the New York Convention”) is the most prominent code on enforcing international arbitral awards with 166 contracting states to the Convention. According to Article II of the New York Convention, an arbitration agreement must be in “writing” and requires the parties’ signature. However, in a virtually operative blockchain arbitration, there is no scope for written agreements or signatures.[4]

Challenges in the enforceability of the Blockchain arbitration award in India

 

Lack of enforceability of the agreement itself under the New York Convention

One problem identified with the enforceability of blockchain arbitration awards is the lack of enforceability of the agreement itself under the New York Convention which requires such agreements to be in writing or through an exchange of telegrams/telefaxes.

Section 7 of the Arbitration and Conciliation Act, 1996 requires that a valid arbitration agreement should be in “writing”. However, unlike Article II of the New York Convention, Section 7 of the Arbitration and Conciliation Act, 1996 clarifies that an agreement would be considered as having been made in writing if it has been communicated through “electronic means”. The allowance for “electronic means” was introduced through the Arbitration and Conciliation (Amendment) Act, 2015, yet remains undefined.

Theoretically, it can be asserted that an award generated in a blockchain arbitration may fall within the ambit of the definition of an ‘electronic record’ under the Information Technology Act, 2000.

Difficulty in determining Awarding Country in a Blockchain Arbitration

India although is a signatory to the New York Convention, only foreign awards made in only certain Contracting States of the Convention (gazetted by the Central Government) can be enforced in view of India’s reciprocity reservation. India has gazetted less than 1/3rdof all of the Contracting States to the New York Convention.[5] 

In the working of a blockchain arbitration, Arbitrators are appointed by a blockchain-based dispute resolution platform. The award is generated on a blockchain and circulated to the parties before the Arbitrator. The parties may be in different countries and the origin/awarding country may be difficult to trace out. In the absence of details of an awarding country, the enforceability of such an award in India becomes a daunting task.

 

Enforcement of Arbitral Award

As per the Arbitration and Conciliation Act, 1996, an application for enforcement of an arbitral award shall be accompanied by an original arbitral award. In a blockchain arbitration, the award is circulated as an electronic record in the blockchain to the parties directly. The concept of a hard copy/original award is alien in blockchain arbitration.

 

Conclusion and Suggestion

A conspectus of the aforesaid facets of the blockchain system shows that the same needs multi-fold reforms before being set to use by the legal fraternity. Even though the blockchain assures, to a great extent, protection of data, but it cannot be forgotten that the hackers also keep updating their own skills and no technology is flawless. The blockchain system has to be made dynamic enough so as to keep abreast with the challenges of new advents in unethical hacking.

Secondly, it is also required that a proper training module is formulated for lawyers of the participating countries which shall ensure unimpeded use of the technology.

Lastly, the author strongly recommends that the use of blockchain should be limited only to procedural aspects in such cases where the dispute involves issues of interpretation of the clauses and or statutes including common law. This may be achieved by adopting a hybrid model of dispute resolution with embedded human intervention modules.

References: 

[1]Gargi Sahasrabudhe, Blockchain technology and arbitration, VIA Mediation & Arbitration Centre, (Nov. 3, 2021, 5:00pm), https://viamediationcentre.org/readnews/ODE1/Blockchain-technology-and-Arbitration

[2]Athul aravind, Blockchain arbitration: the future?, Law and Dispute resolution blog, (Nov. 3, 2021, 5:00pm), https://www.mappingadr.in/post/blockchain-arbitration-the-future

[3] Dena Givari, How does arbitration intersect with the blockchain technology that underlies cryptocurrencies, Kluwer Arbitration Blog, Wolters Kluwer, (Nov. 6, 2021, 8:00pm), http://arbitrationblog.kluwerarbitration.com/2018/05/05/scheduled-blockchain-arbitration-april-17-2018/

[4] Idil Gncosmanoglu, Blockchain-smart contract and arbitration, Mondaq, (Nov. 5, 2021, 5:00pm), https://www.mondaq.com/turkey/fin-tech/967452/blockchain-smart-contracts-and-arbitration.

[5] Ritika Bansal, Enforceability of awards from blockchain arbitrations in India, Kluwer arbitration Blog, http://arbitrationblog.kluwerarbitration.com/2019/08/21/enforceability-of-awards-from-blockchain-arbitrations-in-india/, (2019)

 

 

Image Credits: 

Photo by Launchpresso on Unsplash

The use of blockchain should be limited only to procedural aspects in such cases where the dispute involves issues of interpretation of the clauses and or statutes including common law. This may be achieved by adopting a hybrid model of dispute resolution with embedded human intervention modules.

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Education in India: Time to Connect the Dots and Look at the Big Picture

In the last few days, I read news reports that are seemingly unrelated on the surface. However, I think there exists a deeper connection for those willing to think outside the box. I thought I would use this article to articulate my thoughts on the connections and their possible implications for India. 

India’s New Education Policy expected to gain traction

The first item was about various initiatives announced by the Union government on the first anniversary of India’s National Education Policy (NEP). While internationalization, multiple entry/exit options, and digital education will be key pillars, one other important component is to enable students to pursue first-year Engineering courses in Indian languages.

In the context of the broad-brush changes envisioned to India’s education system, it is time to rethink the role of the UGC as a body that enables the nation’s higher education system in ways beyond disbursing funds to be recognized universities. There also ought to be more harmony between the various Boards that govern school education. The roles of bodies responsible for governing professional education in India- e.g., AICTE, NMC (which replaced the MCI), ICAI, ICSI, ICWAI, Bar Council of India etc. should also be redefined to ensure that India’s professionals remain in tune with the needs of a fast-changing world.

English will play an important role in our continued growth

The second report that caught my attention was on two main points made by Mr. Narayana Murthy (the Founder of Infosys), in a recent media interaction. He stated that it is high time that English be formally acknowledged and designated as India’s official link language, and greater emphasis is given to its teaching and learning in Indian schools. He said that his opinion is based on his first-hand knowledge of many technically qualified students in Bangalore/Karnataka who lose out in the job market largely because they lack a certain expected level of proficiency in English.

In the same interview, Mr. Murthy went on to say that on a priority basis, India needs overseas universities and vocational educational institutions to set up facilities in India to train students and teachers in key areas like nursing. This too makes sense because our healthcare infrastructure needs massive upgrades- and human resources will be critical.

China’s tightening regulations threaten its US$100 Billion EdTechc industry

The third report was on China’s recent decision to tightly regulate its online tutoring companies. The new rules bar online tutoring ventures from going public or raising foreign capital. There are also restrictions on the number of hours for which tutors can teach during weekends and vacations. In fact, the rules go so far as to make online tutorial businesses “not for profit”.

Different views have been expressed on why Chinese authorities have taken this step. Some see it as a means to reduce the cost of children’s education- and thus encourage couples to have more children. They point to this as a logical enabler of the recent relaxations in China’s two-child policy. Others view it as a step designed to clip the wings of Chinese tech companies that are deeply entrenched in many consumer segments, and have, over the past decade, acquired significant financial muscle.

To put into perspective the size of Chinese EdTech companies, consider this data point: Byju’s, arguably India’s largest EdTech company, was valued at over US$16.5 Billion as of mid-June 2021. Despite this high valuation, Byju’s would have been smaller than the top 5 Chinese EdTech players (on the basis of valuations that existed before the recent draconian rules came into effect).

Implications for India

The majority of China’s EdTech ventures are financed through significant venture capital investments from the west. Analysts expect that China’s sudden actions will, at least in the short run, divert capital to other locations. India could be a potential beneficiary because it already fosters a large EdTech ecosystem.

Given our demographics, we have a significant domestic market for education across all levels- primary, secondary, and college. Since digital education will likely become the norm, this space is ripe for newfangled innovations in the days ahead. If online education can bridge the gaps that employers currently perceive in our fresh graduates, unemployability rates shall notably decline. . This will not only contribute directly to our GDP but also indirectly stimulate innovation and entrepreneurship.

India has a large technical skill base. Some of these resources can easily be harnessed to develop next-gen education solutions using cutting-edge technologies such as AI, ML, Language Processing, Augmented Reality, etc. To begin with, Indian start-ups can build, test, and scale EdTech platforms and solutions for our domestic market. Over time, these can be refined and repurposed for global markets. Similarly, features built for the global market can be adapted to Indian markets, thus creating a virtual cycle. Such a trend will not only proffer legs to implementing India’s NEP but will also enable us as a society to improve access to education to underprivileged sections of the society. This is critical to sustaining our growth on the path of socio-economic development.

By taking the right decisions now, we can attract capital, talent, and world-famous institutional brands to this critical sector. EdTech in India has the potential to become a powerful engine of growth for our services sector. Done right, I have no doubt that in a few years, India can become a “Vishwaguru” not just in the spiritual sense, but also literally.

PS: As with many other sectors in India, the legal framework that governs education too needs to be made more contemporary and relevant, but that’s for another time.

Image Credits: Photo by Nikhita S on Unsplash

By taking the right decisions now, we can attract capital, talent and world-famous institutional brands to this critical sector. EdTech in India has the potential to become a powerful engine of growth for our services sector. Done right, I have no doubt that in a few years, India can become a “Vishwaguru” not just in the spiritual sense, but also literally.

 

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Sports and Business: Long Term Thinking is Vital for Success in Both

India’s sportspersons have returned to India after a fantastic performance at the Tokyo Olympic Games. Neeraj Chopra’s javelin throw gave India its first ever gold medal in athletics (and second in an individual event). Weightlifter Mirabai Chanu and wrestler Ravi Dahiya won us two silver medals, while boxer Lovlina Borgohain, badminton player P V Sindhu, wrestler Bajrang Punia and the men’s hockey team won bronze medals. Our overall tally of 7 medals is the highest at any Olympics. Overall, a very creditable performance the nation should be proud of.

As a proud Indian, I too am hopeful that the exposure and “big stage” experience gained by our sportspersons in Tokyo, combined with better training, practice infrastructure and facilities will help India better its 2021 performance. However, I worry about the flurry of speculative discussions in the media about how many medals India will win at the 2024 Paris Olympic Games.

The media is full of expert analysis and recommendations on what the government and sports federations need to do to ensure a higher medal tally in 2024. Sportsperson I am not; nor am I a seer. Therefore, I do not know what individuals and teams need to sustainably enhance their performance and win medals for India in the future. But I do know that ad hoc actions will not suffice.

A structured, long-term approach is essential for sustaining success in sports and business

I see a clear parallel between the world of sports and the corporate world, with which I am more familiar. No matter how talented and skilled an individual athlete or player is, skills alone are not enough to win him/her a medal. They need the right coaching, top quality training facilities, regular opportunities to compete with the world’s best, the right nutrition, inputs on biomechanics, mental conditioning etc. Having all this also does not guarantee a medal-winning performance, because, on the day, anything can happen.

Similarly, individual brilliance or an innovative new idea or product alone will not guarantee success in business. India needs to strengthen its ecosystem for business, with a particular emphasis on startups and young ventures. Coaching and mentoring to give better shape to business ideas, access to risk capital, support during the early stages of the business, tax breaks, the right kinds of sector-specific laws and regulations that will help businesses become viable sooner are all elements of what our business ecosystem requires.

Just as world-class sports infrastructure cannot come up in every state or city in the next year or two, incubators cannot come up everywhere. Junior talent identification and nurturing programs too can take 8-10 years to produce top-class sportspeople who are ready to compete on the global stage. Even if physical infrastructure comes up, finding equally qualified coaches for all locations will not be easy.

Although we know that Artificial Intelligence, Cybersecurity, Clean Energy, Electric Vehicles etc. are all critical emerging areas, it is naïve to expect that overnight India will become a leader in these sectors. The same is true of our performance in sports as well. Countries prioritize participation in those sporting events that afford them their best chances of winning medals; India is no exception. This same thinking needs to be applied to business as well. The first step is to mindfully identify sectors that are critical to our future- for example, clean energy, healthcare, space, drones, defence equipment (aircraft carriers, submarines, 6th generation fighter aircraft, anti-missile systems), electronic chips etc.

Then, just as countries identify individuals with promise in the “priority sports”, the government of India (and the private sector) must identify/agree on ventures with the potential to become world-class and nurture them. Within the national business ecosystem, smaller regional ecosystems need to be created across the country, based on resource availability and other strategic considerations. Individual states must compete with each other to build such ecosystems and attract the best entrepreneurial talent. Doing all this will definitely give India a stronger and more vibrant domestic industry, besides acting as prime movers for overall socio-economic development, employment generation and GDP growth.

Spotting and nurturing young talent in various sports must be part of our education system

Also, our education system has focused on academics, with sports and other activities labeled as “extra-curricular”. This needs to change in two ways. First, right from the primary school level, children must be encouraged to participate in different sporting activities. Trained teachers and specialist staff must spot talent and at the right ages, enable specialized training. This obviously must be done with the parents’ active cooperation. Second, for super talented children who wish to pursue sports as a possible career option, specialized institutions must be set up (either by state/central governments or in PPP mode). Children in these institutions must be given extra coaching and training, while also being allowed to pursue a basic level of academics that will help them once their sporting careers end. Seasoned athletes must be invited to train at these facilities so that young aspirants can learn and benchmark against the country’s best. The National Education Policy 2020 seeks to make sports and physical fitness more central to school education, but the proof of the pudding lies in the eating. Only time will tell how seriously this is taken in a country that values grades and marks over excellence in a chosen field.

Concerted action is essential not just for a US$5 Trillion economy but also a richer medal haul in the future

Winning in sports is not easy- and neither is succeeding in business. If we are not quick to act, flight of entrepreneurial talent to other countries is a distinct possibility, and in time, our businesses (and athletes) may end up competing with rivals who also had their origins in India- and could perhaps have been part of our sports contingents and GDP. What is worse, we may be ranked as poorly on innovation in critical areas as we have been in world sports.

Just as countries identify individuals with promise in the “priority sports”, the government of India (and the private sector) must identify/agree on ventures with the potential to become world-class and nurture them. 

 

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India Needs New Regulations - But Simplification of Compliance is Just as Critical

In earlier posts, I have touched upon the need for Indian laws to be updated to better reflect the current environment and foreseeable changes to it brought about by various forces, primarily technology-led innovation. This is not just because of the need to plug legal loopholes that are exploited to the nation’s detriment but also with the objectives of streamlining compliance and better enforcement.

 

Recently, the union government did exactly this when it announced a new set of rules to govern the operations of drones in India. A new draft of the Drone Rules, 2021, now out for public consultation, will, when approved and notified, replace the UAS Rules, 2021, which were announced in March 2021. The fact that the government has come out with a new set of rules within 4 months of issuing the earlier version is a welcome sign of change, as it signals recognition of a rapidly-changing environment as well as the importance of timely and appropriate responses.

Changes are aimed at simplification and less regulatory control

The new rules are remarkable for other reasons as well. At about 15 pages in length, the new rules are only a tenth of the earlier rules. The changes are not limited to the form; there are substantive changes too. The new rules seek to do away with a large number of approvals (e.g., Unique Authorization Number, Unique Prototype Identification Number etc.).  Licensing for micro drones for non-commercial use has been done away with. Recognizing the immense potential for drones to revolutionize our society and economy, the government proposes to develop “drone corridors” for cargo delivery. Prior authorization of drone-related R&D organizations is being removed. A drone promotion council is to be set up, in order to create a business-friendly regulatory regime that spurs innovation and use of drones. All this augurs well for the development of a robust drone ecosystem in India.

Implementing the “spirit” of underlying regulations is vital

The change to the drone rules is a welcome step- just as the consolidation of 29 of the country’s labour laws into four Codes during 2019 and 2020 was. But rationalization becomes futile if there is no element of reform- e.g., doing away with requirements that have outlived their utility or need significant changes to remain relevant in the current environment? There were many expectations around the Labour Codes, but in the months that followed, it is fair to say that there was also much disillusionment amongst industry stakeholders because sticky issues, such as the distinction between “employees” and “workers”, payment of overtime, role of facilitator-cum-inspector etc., remained.

Simplifying compliance is necessary to improve “ease of doing business” further

The World Bank’s 2020 “ease of doing business” report ranks India 63rd; we were ranked 130 in 2016. The 2020 report considered three areas: business regulatory reforms (starting a business, paying taxes, resolving insolvency etc.); contracting with the government, and employing workers. 

But there are miles to go before we sleep. To ensure that India’s entrepreneurial energies and creative intelligence are directed to areas that will be critical in the years to come- e.g., space, AI, robotics, electric vehicles, clean energy etc. all need new regulations or revamp of existing legislations and rules. But this alone will not suffice. Implementing the spirit, and not just the letter of the law and rules and the simplification of regulatory compliance are important angles that government must pay attention to. These are going to be key determinants in improving our “ease of doing business”.

 

Technology is a necessary enabler but it is not sufficient

All regulatory filings- whether for approvals or compliance- should ideally be enabled in digital format. Digital dashboards in the government and other regulatory bodies should facilitate real-time monitoring. Only exceptions or violations should need further actions. To be sure, the government has initiated some steps in this direction- e,g., “faceless” interactions between business and the Income Tax authorities with the intention to reduce human interventions and thus, the possibility of corruption. But if the underlying income tax portal itself is not working properly, as was widely reported soon after it was launched, the desired outcomes will not be achieved.

Moreover, it is not just about having the right technology platforms in place. It is equally critical to bring about a mindset change in the administrative machinery that helps political leadership formulate policy and thereafter, enable implementation and performance monitoring.

Given India’s large domestic market and attractiveness as a base for exports, we as a nation stand on the threshold of a phase of significant economic growth. Many Indian entrepreneurs are establishing businesses overseas; this means that the benefits of jobs, tax revenues and IPR creation all move to other jurisdictions. The longer anachronistic and irrelevant laws remain on our books, and the harder regulatory compliance remains, the more we stand to lose. In a world where global investment flows, trade and supply chains are facing significant change under the influence of numerous forces, it would truly be unfortunate if India loses out largely because of continued difficulties in regulatory compliance.

Image Credits: Photo by Medienstürmer on Unsplash

The longer anachronistic and irrelevant laws remain on our books, and the harder regulatory compliance remains, the more we stand to lose. In a world where global investment flows, trade and supply chains are facing significant change under the influence of numerous forces, it would truly be unfortunate if India loses out largely because of continued difficulties in regulatory compliance.

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