Also in this letter:
■ How creators and NFTs are fuelling the Digital Renaissance
■ Banning crypto would encourage non-state players: industry body
■ BlackRock, Canada Pension bought more Paytm stock after rout
Social media platforms must be accountable for content: Rajeev Chandrasekhar
Rajeev Chandrasekhar, MoS for IT and Electronics
Hi, it’s Surabhi. I report on internet and tech policy for The Economic Times. Today I will take you through some of the highlights of an interesting interview we did with Rajeev Chandrasekhar, Union minister of state for electronics and IT.
The candid and comprehensive interview is important for many reasons. It comes right after the Joint Committee of Parliament finalised and adopted the Data Protection Bill. Chandrasekhar’s comments on some of the provisions of the bill on social media, data localisation, non-personal data and Section 35 are very important. He was a member of the committee before he was appointed to the Union Cabinet in July.
Once the bill comes up for debate in the winter session of parliament, which starts next week, it will be interesting to see him defend the bill’s recommendations as part of the government.
Chandrasekhar brings a lot to the table. In his early career, he worked with Intel as a senior design engineer on the Pentium chip, before returning to India to start BPL Mobile, one of the first telecom service providers in the country. He then delved into venture capital before donning the hat of a Parliamentarian and now a minister in the Union Cabinet.
So, his comments on tech-related issues—be it India’s semiconductor ambitions, the current IPO frenzy among Indian startups, the challenges of the Internet ecosystem, or the Data Protection Bill—come from a vantage point. What remains to be seen, however, is how he walks the talk on many key issues such as social media regulation, getting a semiconductor fab set up in India, and making India the largest connected country in the world.
Here are some of the highlights of the interview:
On social media: “I have always maintained…that social media platforms are publishers, because…they are publishing content.
“Millions and billions of people are posting content. Some of the content is either wrong or defamatory or illegal. It is abusive, or it is outright predatory and exploitative of people. You can’t have a situation where nobody is held responsible for it.”
“[Platforms] allow a consumer to be anonymous, they don’t want to take the responsibility of publishing the content. And, [they] also will not identify the first originator of illegal content. That’s like utopia for criminals.”
On the JPC: “But there cannot be any argument or doubt about the reasonableness of the need to keep sensitive personal data in India, and not have that exported by intermediaries who are based in the US, Europe or China. I think that is an acceptable formulation for our country and is good for us in terms of data autonomy and data security.
“The government will accept the recommendations of the Joint Parliamentary Committee. There is no reason for the government not to accept the recommendation of 20 Parliamentarians or 30 Parliamentarians, because they are the ones who would pass the bill anyway in Parliament.
“Section 35 is not seeking blanket exemption. Under the Constitution of India, every fundamental right has exceptions—they are not absolute. Actually, Section 35 is not an issue. I don’t understand the concern with Section 12, we will study it.”
Future of tech: “We have developed and are creating a strategy note around digital government, which is really about meeting the Prime Minister’s vision of accelerating the digitalisation of government.”
Electronics manufacturing: “The manufacturing ecosystem in India had been hammered and almost shattered by all these FTAs pre-2014…we are now at Rs 5 lakh crore, which is gross revenues of electronics manufacturing.
“It is clear post-Covid-19 that there is an increasing desire for those who are headquartered in certain countries, which have dominated the supply chains, to diversify… And they are looking at India as a very real alternative to that country.”
Opinion: How creators and NFTs are fuelling the Digital Renaissance
I’ve been a creator longer than being a creator was a “thing”.
Having created first on Quora, then LinkedIn, then Twitter, and finally A Junior VC, I have been digitally native for almost a decade. The joy of creating and connecting with millions of people has been a huge motivator.
I have personally seen creating as a way to help people at scale.
Every creator has motivations that are primarily social. That’s because they began creating on platforms that had zero or little monetary incentive. What they earned is what I call social capital, in the forms of likes, followers and comments on platforms such as Instagram, YouTube, TikTok, LinkedIn, Twitter and Facebook. Each of these platforms has scaled to millions, even billions of users, on “user-generated content”.
For the first decade of the platforms’ existence, creators loved them because they offered an unprecedented canvas. With millions of users available at a push of a button, creators began committing hours to these platforms.
But as the platforms started to become money-spinning machines, creators began to get the raw end of the bargain.
Enter NFTs, or non-fungible tokens: Money is fungible, which means one rupee is equivalent to another rupee. A non-fungible token is by definition not equivalent to another non-fungible token. What this means is that every NFT is unique.
Who makes unique stuff? Digital creators, of course.
Anything digital can thus become an NFT. It could be in any of the four storytelling formats—image (Beeple’s record-breaking NFT), audio (the Grimes NFT), text (Jack Dosey’s first tweet) or video (the Crossroads NFT).
These NFTs are “minted”, or added to a blockchain, to ensure that there is just one original digital copy.
Digital creators can thus sell their work directly as NFTs. Fans can buy their work and support them directly. Where are the big tech platforms? Nowhere.
With almost $11 billion worth of NFTs sold in the last quarter, they are becoming an important way of financing creators. Platforms such as Open Sea have democratised access to creators beyond the biggest celebrities.
Also Read: NFTs and their uses beyond art
Being a full-time creator is going to become a viable career for many people in the near future. Those who give them the shovels for their careers will be part of the “creator economy”. The gold that the creators will find with these shovels will very likely be in the form of NFTs.
We are entering the Digital Renaissance. Aviral Bhatnagar, founder, A Junior VC
Banning crypto would encourage non-state players, says industry body
A blanket ban on cryptocurrencies would encourage non-state players, leading to more unlawful usage of such currencies, the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI), said today.
The remark comes as the government is set to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for consideration and passing in the upcoming winter session of the parliament.
Tell me more: The IAMAI, in its submission before the Supreme Court earlier, listed several possible negative outcomes of a ban, such as zero accountability and traceability of the origin and end usage of cryptocurrencies, besides a complete evasion of taxes. A ban will also adversely affect retail investors, it said.
Quote: “The council has always argued in favour of prohibiting the usage of private cryptocurrencies as a currency in India by law since usage as currency is likely to interfere with monetary policy and fiscal controls. On the other hand, the council has advocated their use only as an asset,” BACC said in a statement.
The industry body said that a smartly regulated crypto sector would protect investors, help monitor Indian buyers and sellers, lead to better taxation of the industry, and curb the illegal use of crypto.
- “Crypto exchanges based in India offer an effective instrument of monitoring and are dedicated to creating an ecosystem that guarantees investor protection besides bringing both the investors and exchanges under proper tax laws,” BACC said.
Cryptic crypto bill: According to a Lok Sabha bulletin published on Tuesday, the crypto bill “seeks to prohibit all private cryptocurrencies in India but allows for “certain exceptions to promote the underlying technology and its uses”.
Then came the panic selling: Indian holders of cryptocurrency went into panic-selling mode on Tuesday, flooding the exchanges around midnight after being spooked by the wording of the government release, which could be interpreted as a ban on all cryptocurrencies. Prices of the highest-valued cryptocurrencies such as Bitcoin and Ethereum fell as much as 15%. Crypto exchanges took to calming investors, urging them not to rush into selling.
Tweet of the day
ETtech Done Deals
■ Tech Mahindra has announced a partnership with Cogniac, a San Jose, California-based provider of enterprise-class Artificial Intelligence (AI) image and video analysis. The companies will simplify data management for enterprises globally by providing AI-based Machine Vision Solutions.
■ Tata Consultancy Services has won a contract from South32 to enhance the Perth-based mining company’s IT infrastructure. Under the new contract, management of critical infrastructure—which was earlier with multiple service providers—has been consolidated with TCS for end-to-end accountability.
BlackRock, Canada Pension bought more Paytm stock after rout
Many of the biggest investors in Paytm’s record-breaking initial public offering increased their stakes in the Indian fintech giant after shares plunged by as much as 41% in the first two days after listing, according to people familiar with the matter.
Doubling down: BlackRock Inc. and Canada Pension Plan Investment Board were among so-called anchor investors in the IPO that bought more Paytm shares on Tuesday and Wednesday.
Taking stock: The stock climbed for a third day on Thursday, rallying as much as 7% to Rs 1,875 in early trading. That’s still a fair distance away from its issue price of Rs 2,150. The size of this week’s purchases by anchor investors wasn’t immediately known. Representatives for BlackRock and CPPIB declined to comment.
So, why? Paytm’s early tumble ranked among the worst debuts by a major technology company since the dotcom bubble in the late 1990s. Any sign that influential money managers like BlackRock are doubling down on the company may help ease concerns about the sustainability of an Indian stock-market boom that has lured $17 billion of foreign inflows over the past year and stoked a trading frenzy among local individual investors.
While Paytm’s shareholders include big-name investors such as Warren Buffett’s Berkshire Hathaway Inc. and Masayoshi Son’s SoftBank Group Corp., some analysts have questioned the company’s valuation and path to profitability. Macquarie Capital Securities (India) Ltd. has a price target of Rs 1,200, about 32% lower than the stock’s closing level on Wednesday.
Paytm CEO Vijay Shekhar Sharma said last week that the stock’s early tumble was “no indicator of the value of our company”. He said in an interview, “We are in it for the long haul. We’ll put our heads down and execute.”
Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.