After Data Law, India Urgently Needs a Ministry for Data Analytics and Intelligence

The Supreme Court’s recent Aadhaar verdict leaves a lot to be desired for the private players. For many private FinTech entities, who saw opportunities for customer penetration, efficiency in operations, and consequential enterprise expansion, the verdict comes as a typical Bengaluru pothole — needlessly disruptive.

The blame for this disruption lies with the government, as well.

Assuming that a number of FinTech and telecom companies wanted to ensure inclusion for economically backward communities in India by helping them with technology and better credit services, there was also the case of gathering of consumer data by private companies like app-based utility services, and cheap smartphone supply companies from China was a concern that should have been addressed long ago through a data protection law.

Unlike the European Union or the United States, India’s data law cannot be centred on individual consent or business needs alone. Given the current inequality in technological, financial, and educational inclusion, India’s data law, while keeping the interests of the individual as its primary focus, shall have to be sympathetic towards the business sector, as we learn from the Aadhaar verdict of the Supreme Court.

The five pillars of India’s pursuit of a digitised governance structure — Jan Dhan, Aadhaar, Mobile, Modicare, and goods and services tax (GST) — also warrant the presence of a thriving data law. Given the scale of these five projects and the data that has been and shall be gathered through them in the coming years, it makes sense to have a data law that strikes a balance between the need of businesses and individuals, both rural and urban, because years later, user privacy, data literacy and awareness will not be unheard of as it is today.

The work done by India Stack also warrants a mention here. Enabling both public (Jan Dhan-Aadhaar-Mobile trinity, Modicare, Unified Payments Interface) and private entities (eKYC for telecom and banking) to offer services based on four essential components — presence-less, cashless, paperless, and consent-based — this private entity has created a bridge between enterprise and population, and thus, a data law shall be important to protect the transfer of data that occurs across this bridge.

However, a data law will not be enough. For a nation that will have 900 million users online by 2025 and possibly be the biggest in terms of population in a few years, the amount of data gathered will be humungous. Making sense of this data will be critical to policy-making. The Ministry of Statistics and Programme Implementation may throw up enough numbers in excruciating spreadsheets for readers to analyse, but those numbers do not mean anything unless they are seen from a macroeconomic perspective. Thus, India needs a smarter ministry for data analytics and intelligence.

The objective of the ministry should not be to compile spreadsheets but draw elaborate analysis, reports, publications, based on data gathered from different ministries. From agriculture to banking and from education to health care, data from each pocket must be taken into account while constructing an elaborate analysis that can be shared in public space for intelligent policy-making or improvising on current ones. The ministry must think beyond numbers and inculcate predictive analysis and data intelligence.

A similar exercise, though in smaller scale, is carried out by the Ministry of Finance each year in the form of the annual economic survey. The survey, while highlighting the achievements of the government on the economic front, is a reference for investors to gauge the economic health of the nation.

The proposed ministry must engage in the publication of similar surveys, however, far more frequently, and by correlating data from other ministries. For instance, does a healthier state have better credit rating amongst its residents, or is better farm productivity an enabler for credit expansion in a certain region, or is better access to educational facilities directly linked to the creation of Ministry of Micro, Small and Medium Enterprises (MSMEs), and so on.

However, where shall the data for this analysis come from?

The first set of data shall come from the banking sector. According to a report by Morgan Stanley last year, consumer loans are expected to grow at a compound annual growth rate (CAGR) of 17 per cent to Rs 112 trillion from 2018 to 2028. With GST in play, the banks will also have greater data availability on micro, medium, and small enterprises. Thus, while loans to MSMEs grew at less than 10 per cent CAGR across the 2010s, the growth rate shall be in double digits beginning 2020s.

However, data will not come only from MSMEs. With more people having access to credit, thanks to the projects like Jan Dhan Yojana, banks will be motivated to give out consumer loans. During the years of IT boom in 2008-09, banks gave out unsecured loans only to see a significant part of them become non-performing. However, with the introduction of Credit Information Bureau (India) Limited (CIBIL) and over 2,400 banks and non-banking financial corporations using CIBIL as a reference to make loans, one can expect data intelligent to be the driving force of credit expansion in India.

The other point of data collection will be digital payments. While no payment must be attributed to an individual for the sake of data intelligence, the millions of transactions shall indeed offer a data trail for banks to evaluate cash flows of consumers, MSMEs, and other startups when it comes to making a loan. Enterprises can grant consent for banks to access their tax filings within the GSTN network while applying for a corporate loan. Eventually, data shall take quick and efficient banking to every pocket of India.

Assuming the government finds a way to give the private sector access to the Aadhaar infrastructure, one can expect fintech companies, peer-to-peer lenders, and other private banks to generate data patterns that can be evaluated to produce intelligent analysis. Thus, data shall be the driving force for credit expansion, lessening risk, and consumer and enterprise growth.

Modicare or Ayushman Bharat as it has now been named shall be the second pool from where vast quantities of data shall be amassed. While the objective in the initial years will be to reach out to millions of Indians with a health insurance cover, going forward, the idea will be to move towards a model of preventive healthcare. Thus, a significant amount of data pertaining to diseases, both communicable and non-communicable, shall be garnered. Given how healthcare is a personally sensitive issue, the presence of a data law would be necessary.

Another avenue of data collection should be SWAYAM, a digital portal for free education by the Ministry of Human Resource and Development. Sadly, the absence of SWAYAM in government communication has not been conspicuous. If the portal enables certification and diploma courses for professionals, students, and other willing participants, a structure can be created where Aadhaar facilitates a ‘student ID’ for anyone who takes these certifications.

While care must be taken to ensure that these certifications do not end up being like courses of Indira Gandhi National Open University in terms of operational efficiency (delay in results, poorly maintained websites), these certifications and diplomas could help banks profile potential grantees for loans, especially for rural startups and micro enterprises in villages.

The data that can be garnered through this portal can help policymakers improve education across schools, colleges, and universities, given the stagnation the Indian educational system finds itself today in. Skill development programmes by Central and State government can also be linked to this portal for the creation of a centralised digital learning centre accessible to every willing learner amongst 1.3 billion people.

Agriculture, a sector plagued by tech backwardness and operational challenges in the face of climate change needs data analytics. While the government may aim to sell its objective of doubling farmers’ income by 2022, it will achieve no success unless data intelligence is taken into account.

For a greater tenure of this government, the shortcut for leadership across all political spectrums to deal with problems in the agricultural sector has been loan waivers. For instance, Uttar Pradesh saw a loan waiver of Rs 36,500 crore. The Maharashtra government waived off Rs 35,000 crore, Punjab Rs 10,000 crore, Karnataka Rs 8,000 crore, and Tamil Nadu Rs 5,780 crore in farm loans. The total outstanding farm loan in 2017 was projected to be over Rs 12.6 lakh crore.

These waivers are unsustainable for reasons related to fiscal discipline. However, a large number of farmers have now begun defaulting on their loans given how state governments push for waivers before or after the elections.

Data analytics, thus, needs to be inculcated on a central and state level to study climate change, crop patterns, farm productivity, resource usage, and evaluate other parameters. The agricultural sector in India must be driven by data intelligence and not opportunistic waivers.

Given the projected growth for the coming years, India, unlike China, must not embark on a mindless infrastructure spree. While business parks, residential complexes, and other centres of economic activities will be instrumental in the growth of urban India, data intelligence must be taken into account before projects are sanctioned.

Already, certain cities in India are grappling with the problem of unoccupied residential complexes and shopping malls. The delay in occupancy not only harms the builders and their expansion prospects but often the banks who have lent them in the first place, thus negatively impacting credit growth.

There are many other avenues will data intelligence will be required. From other public welfare schemes like UJALA and UJJWALA to preparing for disasters like floods in Kerala or the North-East, the use of predictive analysis will enable the government to take intelligent decisions and consequently avoid wasting monetary and human resources.

It cannot be emphasised enough that the benefits accrued from data intelligence must not come by violating the privacy of an individual. Also, in the longer run, data patterns may emerge that may alienate a few regions in terms of investments or economic projects.

Thus, the objective of the data ministry shall be two-fold, to enable better investments based on data garnered, and two, to ensure that the regions or communities lagging behind for whatever reason are supplied with necessary resources. In this regard, it would be required to work with other relevant ministries to ensure better programme implementation and resource allocation.

Sceptics and needlessly excited activists may attribute the creation of such a ministry to a surveillance state. However, with a thriving data law, robust judicial system (in the words of the outgoing Chief Justice of India), and data literacy programmes, one can expect individuals to be the primary owners of their data while also being the winners of the intelligence that is garnered and used for their betterment, especially in the rural regions.

The proposed ministry, in its initial years, must be structured as a public-private partnership that can work independently as a ministry or an organ under the NITI Aayog. Having experts from the private sector will add to the engineering expertise of the ministry. The long-term objective should be to have public servants working in the realm of data intelligence.

Data, like human waste, will be created. It’s an inevitability in the making. Thus, putting this quintillion and quintillion bytes of data to good use is not an option, but a necessity. The government cannot afford to be a sitting duck when it comes to inculcating data intelligence in its working in the coming years.

Policy-making, today, can no longer suffice with intent alone. Thus, innovation and intelligence need to be on the forefront of any policy-making initiative, and this is where data shall have a significant role to play. Having a governmental organ, therefore, is something that must be debated urgently.