The Andhra Pradesh government issued an Ordinance on October 15, 2010, which stipulated conditions for the microfinance activities in the State. This Ordinance was ratified two months later on December 15, 2010 by the lower house of the Andhra Pradesh assembly. The key features of the Bill are: •All MFIs should be registered with the district authority. •No person should be a member of more than one SHG. •All MFIs shall make public the rate of interest charged by them on the loans extended. •There would be a penalty on the use of coercive action by the MFIs. •Any person who contravenes any provision of the Ordinance shall be punishable with imprisonment for a period of 6 months or a fine up to the amount of Rs 10,000, or both. The State assembly accepted most of the features from the earlier Ordinance in the Bill. However, the demand for a cap on the interest rates charged by the MFIs for the loans extended to the SHGs was rejected during the ratification.
Recently, the Personal Data Protection Bill, 2019 was introduced in Parliament. The Bill has been referred to a Joint Parliamentary Committee for detailed examination, and the report is expected by the Budget Session, 2020. The Bill seeks to provide for protection of personal data of individuals, create a framework for processing such personal data, and establishes a Data Protection Authority for the purpose. In this blog, we provide a background to the 2019 Bill, and explain some of its key provisions.
What is personal data and data protection?
Data can be broadly classified into two types: personal and non-personal data. Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual. Non-personal data includes aggregated data through which individuals cannot be identified. For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data. Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.
Why was a Bill brought for personal data protection?
In August 2017, the Supreme Court held that privacy is a fundamental right, flowing from the right to life and personal liberty under Article 21 of the Constitution. The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy. In July 2017, a Committee of Experts, chaired by Justice B. N. Srikrishna, was set up to examine various issues related to data protection in India. The Committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018. The Statement of Objects and Reasons of the Personal Data Protection Bill, 2019 states that the Bill is based on the recommendations of the report of the Expert Committee and the suggestions received from various stakeholders.
How is personal data regulated currently?
Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000. The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data. The Expert Committee in its report, held that while the IT rules were a novel attempt at data protection at the time they were introduced, the pace of development of digital economy has shown its shortcomings.3 For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract. Further, the IT Act applies only to companies, not to the government.
What does the Personal Data Protection Bill provide?
The Bill regulates personal data related to individuals, and the processing, collection and storage of such data. Under the Bill, a data principal is an individual whose personal data is being processed. The entity or individual who decides the means and purposes of data processing is known as data fiduciary. The Bill governs the processing of personal data by both government and companies incorporated in India. It also governs foreign companies, if they deal with personal data of individuals in India.
Will individuals have rights over their data?
The Bill provides the data principal with certain rights with respect to their personal data. These include seeking confirmation on whether their personal data has been processed, seeking correction, completion or erasure of their data, seeking transfer of data to other fiduciaries, and restricting continuing disclosure of their personal data, if it is no longer necessary or if consent is withdrawn. Any processing of personal data can be done only on the basis of consent given by data principal.
Are there any restrictions on processing of an individual’s data?
The Bill also provides for certain obligations of data fiduciaries with respect to processing of personal data. Such processing should be subject to certain purpose, collection and storage limitations. For instance, personal data can be processed only for specific, clear and lawful purpose. Additionally, all data fiduciaries must undertake certain transparency and accountability measures such as implementing security safeguards and instituting grievance redressal mechanisms to address complaints of individuals. Certain fiduciaries would be notified as significant data fiduciaries (based on certain criteria such as volume of data processed and turnover of fiduciary). These fiduciaries must undertake additional accountability measures such as conducting a data protection impact assessment before conducting any processing of large scale sensitive personal data (includes financial data, biometric data, caste, religious or political beliefs).
What is the grievance redressal mechanism if the above restrictions are not followed?
To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a Data Protection Authority. The Authority will be comprised of members with expertise in fields such as data protection and information technology. Any individual, who is not satisfied with the grievance redressal by the data fiduciary can file a complaint to the Authority. Orders of the Authority can be appealed to an Appellate Tribunal. Appeals from the Tribunal will go to the Supreme Court.
Are there any exemptions to these safeguards for processing of personal data?
Processing of personal data is exempt from the provisions of the Bill in some cases. For example, the central government can exempt any of its agencies in the interest of security of state, public order, sovereignty and integrity of India, and friendly relations with foreign states. Processing of personal data is also exempted from provisions of the Bill for certain other purposes such as prevention, investigation, or prosecution of any offence, or research and journalistic purposes. Further, personal data of individuals can be processed without their consent in certain circumstances such as: (i) if required by the State for providing benefits to the individual, (ii) legal proceedings, (iii) to respond to a medical emergency.
Is the Bill different from the draft Bill suggested by the Expert Committee?
The Bill has made several changes from the draft Bill. For instance, the Bill has added a new class of significant data fiduciaries, as social media intermediaries. These will include intermediaries (with users above a notified threshold) which enable online interaction between users. Further, the Bill has expanded the scope of exemptions for the government, and additionally provided that the government may direct data fiduciaries to provide it with any non-personal or anonymised data for better targeting of services.
In a follow-up blog, we will provide a detailed comparison of the key provisions of this Bill with the Draft Personal Data Protection Bill 2018, released by the Justice B. N. Srikrishna Committee.
