National

Telangana 1st state to block Modi’s data bill

NEW DELHI/HYDERABAD, Sep 13 (Agencies) | Publish Date: 9/13/2018 11:48:16 AM IST

Telangana has become the first state to raise concerns over the proposed data protection bill — submitted by the Justice BN Srikrishna Committee — as it fears implementation of certain clauses, especially one on data localisation, will isolate Indian startups and hurt investments in the state and the country. 

The state’s IT minister KT Rama Rao is expected to write a letter to Union minister for electronics and IT Ravi Shankar Prasad expressing concerns that the draft bill’s excessive notice requirements, its restrictive grounds of processing and harsh crossborder transfer norms could threaten Telangana’s startup initiatives and hurt its business-friendly image. 

Certain proposals in the draft data protection bill including one that recommends global internet companies host user data locally could increase operational expenses and impact business growth, according to a top official in the state government. 

“Yes, these are our concerns,” the minister told ET. 

The Centre is seeking public opinion until September 30 to the draft bill and is expected to introduce it in Parliament by December. 

Youngest state fears investments will be hit 

In response to ET’s queries, an official spokesperson of the union ministry for electronics and IT said, “We are working out a monumental law. Views of state governments and public response are being sought. Data protection law would also be placed for Cabinet’s approval before finalising the legislation.” “The exercise is aimed at having a model law that has blend of security, privacy, safety and innovation,” the person said. 

Telangana, India’s youngest state founded in 2014, has attracted investments worth $11.5 billion since 2015 and is currently the country’s second highest contributor to IT exports. Hyderabad, the capital of Telangana, houses engineering and back offices of multinational firms such as Facebook, Microsoft and Google. In 2016, it successfully wooed Apple to set up its map development centre in the city. 

Data localisation would raise the cost of doing business in Telangana along with discouraging foreign investments in the state, the state official said. 

The Srikrishna Panel suggested that every data fiduciary in India shall ensure the storage of at least one serving copy of personal data on a server or data centre located in India. It also stated that the government can notify some categories of personal data as critical personal data that have to be stored in a server or data centre located only in India. Separately, the Reserve Bank of India has mandated payment companies to host user data locally from October. 

US internet and payment firms have opposed data localisation and called for cross border movement of data. 

Last week, Google told the Indian government that it favours crossborder flow of data which would help startups to expand globally, besides companies such as Google contribute to the Indian economy.  “Free flow of data across borders — with a focus on user privacy and security — will encourage startups to innovate and expand globally and encourage global companies to contribute to India’s digital economy,” Google’s India-born CEO Sundar Pichai said in a letter to Prasad last week. 

 

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