India’s Big Data Strategy

Image Courtesy – Pixabay

‘Big data’ is the hottest topic in the world of technocrats, economists, statisticians and policy makers. The data are assimilated from various sources like financial institutions, government departments, companies, regulators, internet and various other data generators. The analysts structure the data, analyze the trends and information, predict the behavior and aid in decision-making. Indian government is pushing the big data analysis very hard since demonetization of November 2016. This blog quoted earlier

“Narendra Modi’s government would be known for formalization and digitalization”

“In his [budget] speech, the [finance] minister used the word ‘data’ (in relation to data mining or analysis) four times, which would probably be the highest since the budget ritual. The government is using data mining and analytics tools for understanding the patterns and trends of data collected post demonetization. GST [Goods and Service Tax] would expose complete transactions and help government to check veracity of all transactions.”

The Support of Aadhaar

Unique Identification Authority of India (UIDAI) was established in January 2009 to provide unique identity cards (called as Aadhar Cards) to every Indian national. In November 2012, the government launched an Aadhaar-linked direct benefit transfer scheme to transfer subsidies directly to the bank accounts of the poor. National Payments Corporation of India launched an Aadhaar-based remittance system too. In March 2015, the Aadhaar-linked DigiLocker service was launched, where Aadhaar-holders can scan, save and share their documents on the cloud with the government officials. The government also linked bank accounts and mobile phones with Aadhaar card to boost financial inclusion. The Parliament passed the Aadhaar (Targeted Delivery of Financial and other Subsidies, benefits and services) Act, 2016 the last year. The Act gave Aadhaar Cards a statutory backing and converted UIDAI into a statutory body under the Ministry of Electronics and Information Technology.

Today, Aadhaar is the world’s largest biometric ID system, with over 1 billion enrolled members constituting more than 90% of India’s population and regarded as ‘the most sophisticated ID programme in the world’ by the World Bank. The government intends to make Aadhaar authentication mandatory for various welfare schemes and utility services like getting subsidies, filing income tax returns, getting telephone and mobile connections and so on. Extending Aadhaar based authentication would ensure efficient delivery of welfare schemes and ease in Know Your Customer (KYC) formalities. The natural fallout of the Aadhaar project would be the big data analysis (the government itself hinted it by establishing UIDAI under the Technology Ministry). With large volumes of personal data, the government would be able to mine and analyse the trends, choices and behavioural patterns of the people. This would help in setting policies, reduce corruption and plug leakages in the system.

One Nation, One Tax

India’s most awaited tax reform, Goods and Service Tax (GST) is finally a law after its decade long controversial journey. GST would replace all the indirect taxes except customs duty. It would be an invoice-level matching system. This means that the buyer’s invoice would not be validated unless it matches with the details of seller’s invoice. Billions of invoices would be matched on a monthly basis. This would require real-time invoice matching capability and a robust IT infrastructure. GST Network (GSTN) is an IT infrastructure for handling this entire taxation system.

The massive scale and spread of the tax data would be useful to the nation in numerous ways. It would induce compliance discipline among businesses. It is also believed that the data analysis would help the government to know the trends in companies, banks and other organizations earlier than the current set-up. Currently, official statistical data like Wholesale Price Index (WPI) and Index of Industrial Production (IIP) are generated after a few weeks’ gap. With the help of GST and big data, the government and the Reserve Bank of India (RBI) could get a real-time economy update and thus make the decision-making process faster.

Big Benefits

The Indian government has applied data analytics during and after the demonetization phase (8th November to 30th December 2016) by scrutinizing various types of transactions in banking, real estate, jewellery and automobile industries. The income tax department has appointed two data analytics firms to analyze bank deposits made before and after demonetization. The firms would link individuals who have deposited large sums of money and have multiple bank accounts or Permanent Account Numbers (PAN). The firms would cross verify the deposits data with the income tax returns and earlier deposits trends. It would help to detect anomaly and possible tax evasion. The department have also analysed accounts showing suspicious pattern of deposits or having some common linkage like common address, PAN, telephone number, email address or name. The official said that the department would continue the data churning process for at least two years. The department has sought explanations from the individuals and will take necessary action against those who do not respond satisfactorily to the department’s notices.

Big data analysis was also used in making of The Economic Survey 2016-17 of India. Chief Economic Advisor Mr Arvind Subramanian said, “We did a lot of new research on the Indian economy for the economy survey; and for the first time, we used a lot of big data to analyse certain things.” He added, “Within India, 8-9 million people migrate every year – almost double what the government had previously thought.” He also stated that there was an impression that it was very difficult to move goods within India and the internal trade-GDP ratio would be smaller. However, inter-state trade data revealed that it is about 54 percent which is comparable to that in other large countries.

Big Concerns

Technology always behaved like a double-edged sword. Its success lies in intentions of the users. Security and privacy are the two important concerns for implementing big data technology. It is exposed to the perils like viruses, hackers, terrorists and enemy nations. GSTN, which would handle financial data of businesses and Aadhar, which carries very personal data of individuals are at the epicentre of such possible risk. Banks would remain as the main channel for every transaction and analysis in the entire scenario. Rise of cyber-crimes, credit card frauds and ineffective laws on cyber security in India would worsen the situation further if not addressed.

In 2015, according to National Crime Records Bureau, 11,592 cases of cyber-crimes were registered in India. On February 12, 2017, the home ministry website was reportedly hacked. While officials denied claims of hacking, the ministry data showed that 39 government websites were hacked in January and February 2017 alone. Pavan Duggal, cyber law expert at the Supreme Court said, “It is indicative of two things – cracks in India’s cyber security armour and the subtle warning by cyber criminals that if government websites are not safe, then nothing is.” He also added that as per the information technology law in India only cyber terrorism and child pornography were non-bailable offences, while the rest are bailable. This calls for stricter and effective cyber laws and infrastructure to reduce the vulnerability of such incidents because even a minor mistake or negligence would keep citizens’ Right to Life at stake.

Human resources and skills remain a challenge in this journey. Two kinds of skill sets are required in big data analysis. One, performing analytics, typically requiring an engineer and the other, understanding and analysing the data. Srikanth Velamakanni, cofounder and CEO of Fractal Analytics expressed his concern on the latter. He said, “In the second category, we need better quality, and India is going to be short of a million data consultants soon.”

The Big Path

Planning on a macro-level using micro-level data is possible with the help of this technology. The analysis stage would unfold new paradigm of planning and policy making. It might transform the way of doing businesses, jobs and daily chores in future. The advantages are numerous. But without discerning its possible threats, the path to success is incomplete.

India would be lucky to enjoy democracy and big data before the economic development. If successful in her attempt, India would set a benchmark for the world while she enters the new horizon of technology transformation.

 –  Swapnil Karkare

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