Government Plans UPI-like Model for Cybersecurity; ‘Smart’ Digital Regulation in the Works, Says Ashwini Vaishnaw”

The Indian government is developing a comprehensive framework for digital regulations aimed at fostering innovation while ensuring citizens are protected from the potential risks of emerging technologies, Union Minister of Railways, Electronics, and Information Technology, Ashwini Vaishnaw, announced during the FE CFO Awards event on Friday.

Highlighting the fast-evolving digital landscape, Vaishnaw emphasized India's intent to carve out a "niche" in digital regulation by introducing a smart digital regulation framework.

He mentioned that this approach would include horizontal laws that cut across all sectors, such as the Data Protection Bill, and vertical legislation to address industry-specific challenges. According to him, this system will strike a delicate balance between innovation and regulation in the rapidly growing tech industry.

UPI-like Framework for Cybersecurity

In an effort to strengthen cybersecurity, the government is also planning to implement a UPI-like framework to provide the necessary resources for MSMEs and smaller entities to protect their systems from growing cyber threats. This will help businesses that may not have the resources to tackle advanced cyberattacks on their own.

“The government is formulating this digital regulation framework by taking into account the risks posed by emerging technologies, such as artificial intelligence (AI), which has led to challenges like deepfakes, content manipulation, and cybersecurity breaches," Vaishnaw explained. He further remarked that traditional institutions, built over centuries, are being disrupted by the rise of AI-generated data, which is increasingly detached from reality. The minister noted that more needs to be done to address these risks comprehensively.

India to Lead the Way in Digital Regulation

Union Minister of Railways, Electronics, and Information Technology, Ashwini Vaishnaw stated that India is well-positioned to set a global precedent for digital regulation. With its vast talent pool, innovative startups, and robust tech infrastructure, India can pave the way for a digital regulatory environment that safeguards both innovation and societal interests. He further emphasized that consultations with industry stakeholders are ongoing to finalize the Digital India Act, a comprehensive law expected to address issues around digital intermediaries and guardrails for new-age technologies.

"It is critical to strike a balance between self-regulation, moderate regulation, and strict enforcement for specific activities," Vaishnaw explained. He noted that certain areas of content regulation will require a nuanced approach, starting with self-regulation and escalating to more stringent measures where necessary.

Rising Cybersecurity Concerns

With cybersecurity breaches becoming increasingly common, the government is keen on introducing harsher penalties for cybercrimes. The UPI-like framework for cybersecurity will also focus on providing businesses with better tools to defend against these growing threats.

Future Outlook for the Indian Economy

On the broader economic front, Vaishnaw projected a real GDP growth rate of 6-8% over the next four to five years, paired with a moderate inflation rate of 4-6%. He credited the Narendra Modi government's investment-led strategy for positioning India as the fastest-growing major economy, especially after the pandemic-induced slowdown.

Had the government followed advice to stimulate the economy by printing money, it could have resulted in short-term benefits, but with long-term consequences such as high inflation, Vaishnaw argued. He cited the Centre’s budgetary capital expenditure (capex), which increased from Rs 3.4 lakh crore in FY20 to Rs 11.2 lakh crore in FY24. This significant investment, according to Vaishnaw, has yielded an investment multiplier of 3.6, with about 60% of its benefits flowing to MSMEs.

Conclusion:

India is gearing up to establish a pioneering digital regulatory framework, designed to address the dual challenge of fostering innovation while protecting citizens from the growing risks of emerging technologies. With a UPI-like cybersecurity model in the works, the government aims to provide resource-constrained MSMEs with the tools to protect against cyber threats. The proposed smart digital regulation will be critical in addressing challenges posed by technologies like AI, deepfakes, and misinformation.

Minister Ashwini Vaishnaw's remarks highlight India's potential to lead the global conversation on digital regulation and cybersecurity, leveraging its talent pool and thriving startup ecosystem. As the Digital India Act moves forward, the country is poised to become a global leader in balancing innovation and regulation in the digital era, ensuring a secure and prosperous digital future for all stakeholders.