THE GIST of Editorial for UPSC Exams : 31 JULY 2019 (Going local (The Hindu))

Going local (The Hindu)

Mains Paper 3: Economy
Prelims level : Srikrishna committee report
Mains level : Highlights the Srikrishna committee report on data locatiosation

Context

A high-level government panel has recommended doing away with the requirement of foreign firms needing to store a copy of all personal data within India.
Firms will now be able to store and process data abroad, though critical personal data will have to be processed and stored in the country.
This approach marks a significant departure from the recommendations of the Justice Srikrishna committee report which had suggested that a copy of personal data must be stored in the country.
The panel’s decision comes after a rethink by the Reserve Bank of India, which earlier relaxed its April 2018 circular that had mandated that all payment data generated in the country be stored here.
This decision, which is likely to be welcomed by foreign companies, who would have seen a surge in costs to comply with these regulations, suggests that a more considered view on localisation norms is evolving in India.

Arguments in favour of data localisation

The arguments in favour of data localisation are straightforward , it will address questions on privacy and security, enable greater governmental access to data, and help develop local data infrastructure.
But on each of these issues, it is not very clear if the benefits from localisation outweigh the costs. For instance, in the absence of a strong data protection law, questions of privacy and security are unlikely to be addressed.
And while there are reasonable arguments to be made in favour of law enforcement having greater access to data, especially when it is not stored in India, interventions such as bilateral treaties aimed at addressing specific issues might be a more prudent approach.
This is not to suggest that localisation is never acceptable. There may be cases when it is justified. But these require careful cost-benefit analysis.

Key concerns

The next set of questions are likely to centre around what constitutes critical personal data.
The Srikrishna committee report had classified personal data pertaining to finances, health, biometric and genetic data, religious and political beliefs, among others, as sensitive personal data.
It had envisaged a data protection agency which would list out further categories of sensitive personal data. But it is debatable whether a single agency is best suited to draw up this list.

Concusion

As, globally, the framing of localisation norms has been largely contextual, driven typically by the type of data and the sector it relates to in Canada, any data may be sensitive based on the context sector specific regulators might be better at identifying which data is sensitive.
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Prelims Questions:

Q.1) With reference to the 7th Economic Census, consider the following statements:
1. It is the complete count of all establishments/units located within the geographical boundaries of the country.
2. It is being conducted by the Union Ministry of Finance.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None