Artificial Intelligence (AI) has grown and transformed remarkably in recent years. AI’s proliferation in the payments industry will likely transform how we process payments in the digital economy. Currently, most payment solutions primarily cater to digitally savvy users who own smartphones and have Internet connectivity. This leaves out many underserved users who lack smartphone access and is, thus, not inclusive. This white paper, developed jointly with the National Payments Corporation of India (NPCI), highlights a solution to improve inclusivity and become a game changer in the payments space.
The white paper was first launched at the Global Fintech Fest in Mumbai, India, on 7th September 2023.
India’s female labour force participation rate (FLFPR) has increased marginally from 32.5% in 2020-21 to 32.8% in 2021-22. But is this pace fast enough? How can women’s participation in the labour force increase to match the global average of 47%?
While India continues to have one of the highest increasing GDP per capita growth at 6.3% in 2022 as compared to other South Asian counterparts, some neighbouring countries like Bhutan (53.8%) and Nepal (40%) have a higher female labour force participation rate as compared to India in 2022.
Women can have a tremendously positive impact on India’s economy. By 2025, if the FLFPR of women increases at the same rate as men, it can add USD 770 billion to India’s GDP. But how close are we to achieving this goal?
Policymakers have increasingly emphasised bringing women into the workforce through policies and programs to build their skills while addressing normative barriers that deter women from taking up jobs. Some barriers result from higher dropout rates among girls, limited job opportunities, and wage discrimination. Moreover, social norms around mobility, decision-making, and household responsibilities can also hinder the extent to which women seek employment in the first place. And after childbirth, re-entering the workforce becomes even harder.
Oxfam India research suggests that while similar norms persist in other South Asian countries, there are far more barriers that hinder women going to work in India. A pertinent example is the correlation between increased development rates and higher household income in urban Indian settings, which paradoxically impacts a woman’s ability to pursue work opportunities outside her home. This trend is fueled by societal preferences for women to remain in domestic roles, particularly as their status advances. Alongside challenges related to safety and mobility, additional factors such as the limited availability of white-collar positions for the growing number of educated women contribute to these barriers. In contrast, countries like Bangladesh offer more formal avenues for women’s employment, particularly in expanding international trade sectors
Moreover, the informal nature of many Indian industries, especially manufacturing, inhibits women’s participation in the burgeoning job market, leading to a predominantly male-dominated environment. A significant factor contributing to this situation is that women in India often experience their first pregnancy before the age of 22, assuming primary responsibilities for childcare, especially in urban areas. Consequently, women are often forced to leave their jobs, opt out of the workforce, or navigate the challenge of providing unsupervised care for their children. This emphasis on early years childcare supersedes career pursuits, and urban women, distinct from their rural counterparts, lack the robust community support systems that enable them to balance work and child raising responsibilities effectively.
While women have access to institutional support, it remains limited to rural programs for pregnant women and post-childbirth care. The Pradhan Mantri Matru Vandana Yojana (PMMVY) is a wage compensation program that provides financial support to pregnant and lactating women to improve maternal and child health. Meanwhile, the Janani Suraksha Yojana (JSY) offers financial support and resources to pregnant women for safe delivery and post-delivery care.
Additionally, India has policies that mandate employers to provide on-site childcare facilities under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). The country also has several policies that authorise childcare for organisations with 50 or more employees. However, most such provisions focus on women in rural areas. Inadequate support in semi-urban and urban spaces remains a missing link for women when they attempt to reenter the workforce post-childbirth.
So, what is the way forward to galvanise women’s labour force participation? One way is to formalize the care economy by investing in the childcare system. Although crèches under the National Creche Scheme understandably reduced during COVID-19, from 18,000+ in 2017-18 to 6,000+ in 2020, available data does not explain if these numbers have shifted between 2021-2023. Increasing crèches at scale will require more childcare professionals, teachers, healthcare professionals, and other associated people. Moreover, if the number of crèches increases, it would enable convergence between upskilling women through government programs, such as the Swarna Jayanti Shahari Rozgar Yojana (SJSRY), which supports women’s self-employment.
Government policies can prioritise encouraging initiatives, such as starting local childcare crèches. Upskilling programs, such as the National Urban Livelihoods Mission, can train women in specific areas, such as health, nutrition, and education, to evolve them as childcare professionals as a career starting point. India can take note of countries, such as Mexico, that run large-scale subsidised childcare programs to encourage women to return to work.
Another approach would be for the government to incentivise private firms that employ more women with tax rebates and other forms of recognition. Some industry players in the manufacturing sector have 100% women employees. Female employment enables government involvement while allowing industries to direct their corporate social responsibility ventures to benefit their output and productivity rates.
Investing in the childcare ecosystem, building engagements with the private sector and civil society, and creating policies that enable women’s participation in the formal economy can help overcome existing normative barriers and limited economic opportunities. Together, these interventions can chart new heights for women and build milestones for India’s growth story.
Digital payments in India grew phenomenally in the past decade and are expected to rise over USD 10 trillion by 2026. The digitization of bill payments and collections will comprise a significant part of this growth while it improves access to financial services.
BBPS intends to use its standardized, interoperable, and secure payment solution. It, thus, remains at the core of India’s collections ecosystem. It seeks to become the country’s de facto collections platform. In this new white paper, MSC traces BBPS’s journey and examines its potential in the next decade.
The publication discusses lessons and insights from MSC’s study to decode the extent and exposure of financial fraud among digital financial services’ (DFS) customers. It summarizes major trends in digital fraud, implications for various demographic segments, and the interplay between technology, awareness, and user vulnerabilities. The publication highlights vital lessons for policymakers to design proactive measures, streamline complaint resolution systems, and integrate technology with grassroots outreach for effective fraud prevention. It builds on various stakeholders’ experiences, from victims to financial service providers, and gives a holistic view of the digital financial landscape and its challenges.
The study uncovered the status of access to banking services in rural India, banking and digital financial services usage, and customer perspectives on the delivery of banking services. This report provides insights on these aspects. The updated version of the report was uploaded on October 6, 2023.
The Cambridge Analytica scandal of 2018 rocked the world and grabbed headlines as one of the most massive data privacy breaches ever. Cambridge Analytica accessed data from millions of Facebook users without explicit consent and used it for targeted political advertising. The breach stemmed from a personality quiz app that collected data from both users and their Facebook friends. And the numbers were shocking—the breach impacted up to 87 million people.
India’s new Digital Personal Data Protection (DPDP) Act intends to prevent data privacy breaches such as this. The DPDP Act was designed to counteract such unauthorized data collection and misuse, with strict consent and user rights provisions. It holds promise to bolster our digital security framework and ensure citizens’ privacy.
Over the past years, India has sought to build this system through expert discussions, reports, and the introduction of two earlier versions of the bill in2019 and 2022. The Indian parliament approved the DPDP Bill in 2023, six years after the important case of Justice K.S. Puttaswamy v Union of India. In the case, India’s Supreme Court established the right to privacy, including personal data protection, as a fundamental right under the Indian Constitution’s “right to life.” The Supreme Court, comprising nine judges, recommended that the Indian Government establish a well-structured system to safeguard personal data.
This blog outlines the key provisions of the DPDP Act and the exemptions granted to various entities:
Scope of DPDP: The DPDP Act addresses several aspects, much like the EU’s General Data Protection Regulation. It broadly defines “personal data” to encompass various types of information about individuals. Furthermore, this Act applies to all entities that handle personal data, regardless of their size or whether they are private.
Purpose limitation: The DPDP law sets clear guidelines for the online use of personal data. It permits the use of this data only for specific reasons. The data must be erased once those reasons are fulfilled. Additionally, individuals have rights regarding their personal data. They are entitled to be informed about its use, access it, and request its deletion.
Establishment of Data Protection Board: The Data Protection Board plays a significant role to ensure the proper implementation and enforcement of data protection regulations. The board serves as a regulatory authority that oversees and supervises the protection of personal data in the country. Its key roles and responsibilities will include regulation and oversight, data audits and assessments, handling and complaints, research and development, and penalties.
Additional responsibilities for significant data fiduciaries: The DPDP Act empowers the government to label certain companies as “significant data fiduciaries” (SDFs). This categorization of SDFs will be based on factors, such as the volume and sensitivity of data they handle and the potential risks to the country. When companies are designated SDFs, they have increased responsibilities. One important responsibility is to assign a Data Protection Officer (DPO) who works in India. This person is the contact for complaints. SDFs must have an independent data auditor who ensures compliance with the DPDP Act and evaluates their data protection measures regularly.
Data transfers: The DPDP Act currently does not restrict the transfer of personal data outside India. Instead of defaulting to limitations, the Act assumes that data transfers are permissible unless the government specifically restricts transfers to certain countries or imposes other limitations. The Act does not provide clear criteria to impose such restrictions. Additionally, the DPDP Act clarifies that it will not change any existing data localization requirements.
Consent management: The DPDP Act requires that consent for data processing be “clear, specific, informed, and unequivocal.” Companies (data fiduciaries) must use personal information only for lawful purposes. They can use this data only with the individual’s (data subject’s) permission or for a justified reason.
Companies must use personal data exclusively for the purpose they inform the individual about. If they want to use it for a different purpose, they need to seek permission again. This ensures companies cannot obtain blanket approvals for multiple uses. Individuals can decline data use at any point, and rejection should be as straightforward as consent.
If someone opts out, their data must be deleted unless a specific law mandates its retention. The DPDP Act would allow individuals to grant, review or deny data use through a “Consent Manager” which will be registered with the data protection board. Consent Managers are tasked to ensure compliance and manage individuals’ data preferences.
Grievance resolution: The DPDP also allows people to seek grievance resolution, which means the company should provide an easy way to complain if customers feel their data was shared or processed without consent. The law does not specify the turnaround time for companies to respond to complaints. This decision will be made through separate rules, and various companies may have different timeframes. The DPDP gives customers the right to “appoint a nominee,” which allows individuals to select someone to act on their behalf if they cannot do so themselves.
Fine and penalty: The DPDP Act removes section 43 A of the IT Act, 2000, which provides for compensation if a company leaks an individual’s sensitive personal data or information. DPDP imposes fines on entities, including companies, banks, and even government data handling agencies, if they process citizens’ online data beyond the lawful purpose. These organizations can only use citizens’ online data for “legal reasons.” If they break the rules, they could face penalties that range from INR 50 crore to INR 250 crore (USD 6 million to USD 30.2 million), and their platform might be blocked.
The DPDP outlines specific responsibilities for users. Individuals must not impersonate others when they provide personal information, not omit crucial details when they submit personal data for government documents, and refrain from false or trivial complaints. Failure to adhere to these responsibilities may lead to fines up to INR 10,000 (up to USD 120).
Data protection for minors: The DPDP Act establishes important responsibilities on how to handle children’s personal data. It defines “children” as anyone younger than 18 years. The Act mandates that companies that handle data cannot process children’s data in a way that might harm their well-being. The Act also makes it illegal for companies that handle data to track or monitor children’s behavior or show them specific ads.
Exemptions: The law has some exceptions for government entities and includes specific exceptions. For example, the government is permitted activities related to national security, relationships with other countries, public order, and those that prevent crime. The law also says that Indian companies do not have to follow some important rules, such as giving people the right to see or delete their data if they handle data of people from outside India and have a contract with a foreign company. These Indian companies mainly have to focus on keeping the data secure. Personal data processed for research, archiving, or statistical purposes will also be exempted.
Significantly, the Act does not distinguish between sensitive and non-sensitive personal data and does not limit processing data outside the country unless the new rules identify specific restricted areas.
Conclusion
The DPDP Act is a concise document that uses simple words and illustrations to explain the provisions. This is a big change from the long and complicated ways data protection laws have usually been written.The DPDP represents a major effort to enhance online privacy and ensure data security in India. It intends to transform the privacy domain by emphasizing transparency, explicit consent, data minimization, and adherence to usage restrictions. Companies must allocate resources to understand and implement the DPDP Act’s provisions and anticipate associated compliance costs.
Companies can navigate the new regulations more effectively by adapting to these changes. While both houses of the parliament have approved the DPDP Bill, its specific rules will become clearer once it is enacted. This will occur when the government declares the official date for the law’s enforcement.
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