The Personal Data Protection Bill, 2019: How it differs from the draft Bill

Anurag Vaishnav - December 27, 2019

The Personal Data Protection Bill, 2019 was recently introduced in Parliament. The Bill has been referred to a Joint Parliamentary Committee for detailed examination, and the Committee is expected to submit its report by the last week of Budget Session, 2020. The Bill seeks to provide for the protection of personal data of individuals (known as data principals), and creates a framework for processing such personal data by other entities (known as data fiduciaries). It provides the data principal with certain rights with respect to their data, such as seeking correction, completion or transfer of their data to other fiduciaries. Similarly, it sets out certain obligations, and other transparency and accountability measures to be undertaken by the data fiduciary, such as instituting grievance redressal mechanisms to address complaints of individuals. Processing of personal data is exempted from the provisions of the Bill in certain cases, such as security of state, public order, or for prevention, investigation, or prosecution of any offence. The Bill also establishes a Data Protection Authority to ensure compliance with the provisions of the Bill and provide for further regulations.

As per the Statement of Objects and Reasons of the 2019 Bill, the provisions of the Bill are based on the recommendations of the report of the Expert Committee (Chair: Justice B. N. Srikrishna) which examined issues related to protection of personal data and proposed a Draft Personal Data Protection Bill, 2018.

In a previous blog, we provided a brief background to the 2019 Bill, explained why a Bill was brought for personal data protection and what are some of the key provisions of the Bill. In this blog, we look at how the 2019 Bill differs from the 2018 Draft Bill.

Table 1: Comparison of the provisions of the 2018 Draft Bill with the 2019 Bill

Provision	Draft Personal Data Protection Bill, 2018	Personal Data Protection Bill, 2019
Definition of personal data	Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.	The Bill retains the definition and adds that such characteristics or traits will also include any inference drawn from such data for the purpose of profiling.
Sensitive personal data	Sensitive personal data includes personal data related to health, sex life, sexual orientation, financial data, passwords, among others. The Data Protection Authority can categorise any other personal data as sensitive personal data.	The Bill removes passwords from the category of sensitive personal data. The power to further categorise personal data as sensitive personal data will lie with the central government (in consultation with Data Protection Authority and the sector regulator concerned).
Rights of individual (data principal)	The data principal has certain rights with respect to their data such as obtaining confirmation on whether their data has been processed, seeking correction, transfer, or restriction on continuing disclosure of their data.	The Bill provides the right to erasure of personal data which is no longer necessary for the purpose for which it was processed, as an additional right for the data principal.
Non-consensual processing of personal data	Personal data may be processed without obtaining the consent of the individual on certain grounds. These include: (i) any function of Parliament or state legislature, (ii) if required by the State for providing benefits to the individual, and (iii) for reasonable purposes specified by the Authority, such as fraud detection, debt recovery, and whistle blowing.	The Bill removes the provision on any function of Parliament or state legislature as a ground for non-consensual processing of personal data. The Bill adds ‘operation of search engines’ as a reasonable purpose for which non-consensual processing of personal data may be allowed by the Authority.
Social media intermediaries	The draft Bill did not contain this term.	The Bill defines a social media intermediary as an intermediary which enables online interaction between users and allows for sharing of information. All social media intermediaries which are classified as significant data fiduciaries (fiduciaries with users above a notified threshold whose actions can impact electoral democracy or public order) must provide a voluntary user verification mechanism for all users in India.
Exemptions for the government for processing of personal data	The State is exempted from the provisions of the Bill while processing personal data in the interest of national security. However, such processing must be permitted by a law and must be proportionate to the interests being achieved. Further, such processing must be done in a fair and reasonable manner.	The government can exempt any of its agencies from any or all provisions of the Act, for processing of personal data in certain cases. These include: (i) in interest of security of state, public order, sovereignty and integrity of India and friendly relations with foreign states, and (ii) for preventing incitement to commission of any cognisable offence relating to the above matters.
Exemptions for manual processing by small entities	Transparency and accountability measures and certain other obligations will not apply to small entities. These are fiduciaries which: (i) have annual turnover below Rs 20 lakh (or such lower amount as prescribed), and (ii) did not process data of more than 100 individuals in any one day in the last year.	The Bill retains the exemption for small entities. However, it does away with the prescribed limits and allows the Authority to classify fiduciaries as small entities based on the annual turnover of fiduciary and the volume of data processed by such fiduciary.
Transfer of personal data outside country	One serving copy of all personal data should be stored in India.	The Bill removes the provision for mandatory storage of all personal data in the country. It provides that sensitive personal data must continue to be stored in India. Such data can be transferred outside India if explicitly consented by the individual, and subject to certain additional conditions.
Composition of Data Protection Authority of India	The chairperson and members of the Authority will be appointed by the central government on the recommendations of a selection committee. The selection committee will be comprised of: (i) Chief Justice of India or a Judge of Supreme Court as the chairperson, (ii) Cabinet Secretary, and (iii) an expert in field of data protection, information technology and related subjects.	The Bill provides that the selection committee will be comprised of: (i) Cabinet Secretary as the chairperson, (ii) Secretary, Department of Legal Affairs, and (iii) Secretary, Ministry of Electronics and Information Technology.
Offences and penalties	Under the Bill, offences such as: (i) obtaining, disclosing, transferring, or selling personal data in contravention of the Act, and (ii) re-identification and processing of de-identified personal data (data from which identifiers have been removed) without consent, are punishable with imprisonment.	Under the Bill, re-identification and processing of de-identified personal without consent is the only offence punishable with imprisonment.
Non-personal and anonymised personal data	No provision of the Bill would apply to non-personal data used by government for formulation of policies for digital economy, growth or security.	The Bill retains the provision and further provides that the government can direct data fiduciaries to provide it any: (i) non-personal data and (ii) anonymised personal data (where it is not possible to identify data principal) for better targeting of services and formulation of evidence-based policy.

Sources: The Draft Personal Data Protection Bill, 2018; The Personal Data Protection Bill, 2019; PRS.

Policy

What is Fuelling Power Sector Losses?

Tanvi Vipra - May 10, 2024

Last week, the Power Finance Corporation reported that state-owned power distribution companies across the country made financial losses amounting to Rs 68,832 crore in 2022-23. This is four times higher than the losses witnessed in 2021-22, and roughly equivalent to the annual budget of a state like Uttarakhand. This blog examines some of the causes and implications of such losses.

Overview of financial losses

For several years now, electricity distribution companies (discoms), which are mostly state-owned, have witnessed steep financial losses. Between 2017-18 and 2022-23, losses accumulated to over three lakh crore rupees. In 2021-22, discom witnessed substantial reduction in their losses, primarily because states released 1.54 lakh rupees in subsidies to clear pending dues. State governments provide discoms with subsidies, so that domestic and agricultural consumers receive affordable power. These payments are typically delayed which creates cash flow constraints, and leads to an accumulation of debt. In addition, costs incurred by discoms in 2021-22 remained unchanged.

Note: Data from 2020-21 onwards does not include Odisha, and Dadra & Nagar Haveli and Daman and Diu since their distribution function was privatised in 2020-21. Data for Ladakh is available from 2021-22 onwards. Data for Jammu and Kashmir is not available. The Delhi Municipal Council Distribution Utility has been included from 2020-21 onwards.
Sources: Power Finance Corporation reports for various years; PRS.

As of 2022-23, losses have increased again to reach Rs 68,832 crore. This increase has been driven by rising costs. At a per unit level, the cost of supplying one kilowatt of electricity rose from 7.6 rupees in 2021-22, to 8.6 rupees in 2022-23 (See Table 1).

Table 1: Financial details of state-owned power distribution companies

Details	2019-20	2020-21	2021-22	2022-23
Average cost of supplying power (ACS)	7.4	7.7	7.6	8.6
Average revenue realised (ARR)	6.8	7.1	7.3	7.8
Per unit loss (ACS-ARR)	0.6	0.6	0.3	0.7
Total losses (in Rs crore)	-60,231	-76,899	-16,579	-68,832

Purchase of electricity from generation companies (gencos) forms about 70% of a discom’s total costs, and coal is the primary source for generating electricity. The following chain of events took place in 2022-23: (i) consumer demand for electricity rose by 10% over the previous year, as compared to a 6% year-on-year increase in the past 10 years, (ii) coal had to be imported to meet the increased demand, and (iii) global coal prices were elevated.

Coal imported at elevated prices to keep up with rising electricity demand

In 2022-23, demand for electricity increased by 10% over 2021-22. Between 2008-09 and 2018-19, demand increased at an annual growth rate (CAGR) of 6%. Electricity demand grew as the economy grew (at 7%), and largely came from domestic and agricultural consumers. These consumer categories account for 54% of the total electricity sales, and their demand rose by 7%.

Sources: Central Electricity Regulatory Commission; PRS.

Electricity cannot be stored at scale, which means that generation must be scheduled depending on anticipated demand. The Central Electricity Authority anticipates annual demand for each year. It estimated that demand in 2022-23 would be at 1,505 billion units. However, the actual demand was higher than anticipated in the first few months of 2022-23 (See Figure 3).

To meet this demand, electricity generation had to be ramped up. Coal stocks had already depleted from 29 million tonnes in June 2021 to eight million tonnes in September 2021, on account of high demand in 2021-22. To ensure uninterrupted supply of power, the Ministry of Power directed gencos to import coal. The Ministry noted that without imports, widespread power cuts and blackouts would have occurred.

Sources: Load Generation Balance Report 2022 and 2023, Central Electricity Authority; PRS.

Coal imports rose by about 27 million tonnes in 2022-23. While this constituted only 5% of the overall coal used in the sector, the price at which it was imported significantly impacted the sector. In 2021-22, India imported coal at an average price of Rs 8,300 per tonne. This rose to Rs 12,500 per tonne in 2022-23, a 51% increase. Coal was primarily imported from Indonesia, and prices shot up due to the Russia-Ukraine war, and demand surge by countries like India and China.

Sources: Ministry of Power; Ministry of Statistics and Programme Implementation; PRS.

Coal import situation going forward

In January 2023, the Ministry of Power advised gencos to import 6% of the required coal, to ensure sufficient stock until September 2023. It noted that due to floods and variable rainfall in various parts of the country, hydro generation capacity reduced by about 14%. This put additional burden on coal based thermal generation in 2023-24. Following this, in October 2023, the Ministry directed all gencos to continue using at least 6% imported coal until March 2024.

Sources: Ministry of Coal; PRS.

Structural issues in the power sector and its impact on state finances

Discoms witness persistent financial losses due to certain structural issues. Their costs are typically high because of old contracts with generation companies (gencos). Power purchase costs in these contracts do not account for production efficiencies over the years, and costs remain unchanged. Tariffs are only revised every few years, to ensure that consumers are protected from supply chain shocks. As a result, costs are carried forward for a few years. In addition, discoms sell electricity to certain consumers such as agricultural and residential consumers, below cost. This is supposed to primarily be recovered through subsidy grants provided by state governments. However, states often delay subsidy payments leading to cash flow issues, and accumulation of debt. In addition, tariff recovery from the power sold is not optimal.

Losses reported in the generation sector have also increased. In 2022-23, state-owned gencos reported losses worth Rs 7,175 crore, as compared to the Rs 4,245 crore in 2021-22. Rajasthan accounted for 87% of these, at Rs 6,278 crore. Note that under the Late Payment Surcharge Rules, 2022, discoms are required to make upfront payments to gencos.

Risk to state finances

Persistent financial losses, high debt and guarantees extended by states continue to pose a risk to state finances. These are contingent liabilities for state governments, i.e., in the event a discom is unable to repay its debt, the state would have to take it over.

Several such schemes have been introduced in the past to bail discoms out (See Table 2). As of 2022-23, discoms have an outstanding debt worth Rs 6.61 lakh crore, 2.4% of the national GDP. Debt is significantly high in states such as Tamil Nadu (6% of GSDP), Rajasthan (6% of GSDP), and Uttar Pradesh (3% of GSDP). Previous Finance Commissions have recognised that strengthening discom finances is key in minimising the risk to state finances.

Table 2: Key government schemes for the turnaround of the distribution sector over the years

Year	Scheme	Details
2002	Bailout Package	States take over the debt of state electricity boards worth Rs 35,000 crore, 50% waiver of interest payable by state electricity boards to central PSUs
2012	Financial Restructuring Package	States take over 50% of the outstanding short-term liabilities worth Rs 56,908 crore
2015	Ujwal Discom Assurance Yojana (UDAY)	States take over 75% of the debt of discoms worth Rs 2.3 lakh crore and also provide grants for any future losses
2020	Liquidity Infusion Scheme	Discoms get loans worth Rs 1.35 lakh crore from Power Finance Corporation and REC Limited to settle outstanding dues of generators, state governments provide guarantee
2022	Revamped Distribution Sector Scheme	Central government to provide result-linked financial assistance worth Rs 97,631 crore for strengthening of supply infrastructure

Sources: NITI Aayog, Press Releases of the Ministry of Power; PRS.

For more details on the impact of discom finances on state finances, see here. For more details on structural issues in the power distribution sector, see here.

ANNEXURE

Table 3: Cost and revenue structure of discoms on energy sold basis (in Rs per kw)

Details	2019-20	2020-21	2021-22	2022-23
Average cost of supplying power (ACS)	7.4	7.7	7.6	8.6
of which
Cost of procuring power	5.8	5.9	5.8	6.6
Average revenue realised (ARR)	6.8	7.1	7.3	7.8
of which
Revenue from sale of power	5.0	4.9	5.1	5.5
Tariff subsidy	1.3	1.4	1.4	1.5
Regulatory income and revenue grant under UDAY	0.3	0.1	0.0	0.2
Per unit loss	0.6	0.6	0.3	0.7
Total financial losses	-60,231	-76,899	-16,579	-68,832

Sources: Power Finance Corporation reports for various years; PRS.

Table 4: State-wise profit/loss of power distribution companies (in Rs crore)

State/UT	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23
Andaman and Nicobar Islands	-605	-645	-678	-757	-86	-76
Andhra Pradesh	-546	-16,831	1,103	-6,894	-2,595	1,211
Arunachal Pradesh	-429	-420	NA	NA	NA	NA
Assam	-259	311	1,141	-107	357	-800
Bihar	-1,872	-1,845	-2,913	-2,966	-2,546	-10
Chandigarh	321	131	59	79	-101	NA
Chhattisgarh	-739	-814	-571	-713	-807	-1,015
Dadra & Nagar Haveli and Daman & Diu	312	-149	-125	NA	NA	NA
Delhi	NA	NA	NA	98	57	-141
Goa	26	-121	-276	78	117	69
Gujarat	426	184	314	429	371	147
Haryana	412	281	331	637	849	975
Himachal Pradesh	-44	132	43	-153	-141	-1,340
Jharkhand	-212	-730	-1,111	-2,556	-1,721	-3,545
Karnataka	-2,439	-4,889	-2,501	-5,382	4,719	-2,414
Kerala	-784	-135	-270	-483	98	-1,022
Ladakh	NA	NA	NA	NA	-11	-57
Lakshadweep	-98	-120	-115	-117	NA	NA
Madhya Pradesh	-5,802	-9,713	-5,034	-9,884	-2,354	1,842
Maharashtra	-3,927	2,549	-5,011	-7,129	-1,147	-19,846
Manipur	-8	-42	-15	-15	-22	-146
Meghalaya	-287	-202	-443	-101	-157	-193
Mizoram	87	-260	-291	-115	-59	-158
Nagaland	-62	-94	-477	-17	24	33
Puducherry	5	-39	-306	-23	84	-131
Punjab	-2,760	363	-975	49	1,680	-1,375
Rajasthan	-11,314	-12,524	-12,277	-5,994	2,374	-2,024
Sikkim	-29	-3	-179	-34	NA	71
Tamil Nadu	-12,541	-17,186	-16,528	-13,066	-9,130	-9,192
Telangana	-6,697	-9,525	-6,966	-6,686	-831	-11,103
Tripura	28	38	-104	-4	-127	-193
Uttar Pradesh	-5,269	-5,902	-3,866	-10,660	-6,498	-15,512
Uttarakhand	-229	-808	-323	-152	-21	-1,224
West Bengal	-871	-1,171	-1,867	-4,261	1,045	-1,663
State Sector	-56,206	-80,179	-60,231	-76,899	-16,579	-68,832
Dadra & Nagar Haveli and Daman & Diu	NA	NA	NA	242	148	104
Delhi	109	657	-975	1,876	521	-76
Gujarat	574	307	612	655	522	627
Odisha	NA	NA	-842	-853	940	746
Maharashtra	NA	590	1,696	-375	360	42
Uttar Pradesh	182	126	172	333	256	212
West Bengal	658	377	379	398	66	-12
Private Sector	1,523	2,057	1,042	2,276	2,813	1,643
All-India	-54,683	-78,122	-59,189	-77,896	-13,766	-67,189

Note: Minus sign (-) indicates loss; Dadra & Nagar Haveli and Daman & Diu discom was privatised on April 1, 2022; New Delhi Municipal Council Distribution utility has been added from 2020-21 onwards.
Sources: Power Finance Corporation reports for various years; PRS.

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The Personal Data Protection Bill, 2019: How it differs from the draft Bill

What is Fuelling Power Sector Losses?

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