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India's IT Sector- Caught Between Social Innovation And Government Surveillance

Posted by: admin on Wed, 2010-09-29 21:29

A new effort by the Indian government to monitor electronic communications has gained international attention. Critics warn that it could dampen innovation. Gayatri Murthy looks at the argument that a more restrictive environment might hamper ICT advances that have often helped development goals as much as the individual corporations’ bottom line.

By Gayatri Murthy

The Indian government may be on the brink of slowing down its information technology revolution by dramatically increasing electronic surveillance in an effort to prevent terrorist attacks. Critics warn that the country risks alienating the very businesses that have fueled the development of technological innovation. This technology boom has also fueled initiatives (both private and in collaboration with government and NGOs) that have often helped its most disempowered and marginalized citizens.

India’s Push to Increase Surveillance
In the past few months, the Indian government has been criticized for its demands to monitor digital encrypted messages on national security grounds. The government’s rationale alludes to the concern that militants might be using advanced communication technology to plan attacks. India is no stranger to terrorist attacks carried out through sophisticated communications technology. Most notably, the Mumbai attackers of 2008 were in constant contact with their counterparts via satellite phone and the internet during the actual hostage situation. Earlier this year, Chinese hackers infiltrated India’s confidential military networks. For many in India, these incidents are sufficient evidence that the Indian state has a legitimate argument for lawful interception of such attacks in the future.

One of the most controversial elements of these efforts, however, has been the government’s threat to block encrypted BlackBerry services, widely used by local and international businesses in India, unless service providers and Blackberry give access to the data in a readable format. Although the government has been able to access calls to identify terrorists (especially in the Mumbai attacks of 2008), it is not yet able to monitor secure encrypted services like Blackberry messaging and e-mails, or virtual private networks (VPN) that transfer encrypted data such as Skype, Yahoo and Google. Similar demands are expected to be made of Google and Skype; although the government has not said when.

Last month, the government warned the Canadian makers of Blackberry-Research in Motion (RIM) that if it wanted to continue to offer full services beyond November, it had 60 days (until October 31, 2010) to agree to set up a local server giving the government access. On September 23, 2010, the leading Indian newspaper, Hindustan Times, reported that two Indian service providers, Bharti Airtel (which recently acquired Africa's Zain) and Tata Teleservices Ltd., had both sent compliance reports to the Department of Telecommunications confirming they had carried out the upgrading work on their end that was necessary to allow law enforcement to monitor messages sent through Blackberry devices.

Critics have said that these measures, in addition to some equipment import restrictions introduced in the past, will deter foreign investors and businesses from setting up shop in India. These measures could also alienate India’s own very successful companies that have been rapidly expanding on a global stage. The growth of the information and communication sector in India is a tremendous success story -- India has close to 600 million cell phone users, and this number is predicted to increase to 800 million by 2012. But this boom was aided by the presence of secure networks in India for leading global companies to set up software development, BPO and R&D centers. The new legislation could change that.

Implications for Development and Social Innovation
The Indian government also risks disrupting an atmosphere that has spurred innovation in the past. Many ICT innovations have been silently and rapidly increasing basic access to information and communication for India’s poorest and disenfranchised citizens. Often these innovations have been developed by the private sector, and sometimes by the very same global companies that have invested here.

In March 2010, Bharti Enterprises Ltd., the parent company one of India’s biggest mobile phone providers, partnered with Wal-Mart-India to launch a direct farm produce sourcing system. It streamlines the supply chain between farmers and consumers in the northern state of Punjab. There were direct supply chains set up between the farmers and the “easy stores” that Wal-Mart has set up in the cities of Chandigarh, Amritsar and Ludhiana, thus ensuring that farmers get the right prices and are not exploited by middle men as they often are in rural India. Airtel also has launched a Green SIM Card through which farmers can receive free voice-mails containing agricultural information. Similar cards for farmers are available through Reuters Market Light (RML).

In many cases, the use of a cell phone or internet connection has meant more for Indians than access to a communication device. Money transfers via mobile phones have transformed many African nations, although they have yet to become as widespread in India. But this month, the Reserve Bank of India, granted Bharti Airtel the permission to offer its customers the “semi-private wallet” facility. This is a prepaid payment instrument (similar in concept to mobile money, but more intended for purchase) that is redeemable against products and services at certain merchant locations, which contract with the issuer to accept payment through this method, negating the need to carry cash or other financial instruments.

Paromita Pain recently wrote about the digital news service, developed with funding from Microsoft Research, in Central India that employs mobile phones both to receive and broadcast news stories. It uses mobile phones to overcome barriers like illiteracy and lack of internet access. Reporters (people living in the tribal areas) file their stories and users can call in and listen to them on the phone. This service, called CGNet Swara, actually trains people from the tribal populations to become citizen journalists and create a credible and accessible news service in the otherwise inaccessible tribal belt of India.

Cell phones have also been able to improve information available to people regarding education, health and agriculture in rural India. For instance, last month, Microsoft Research also launched their text-free computer interface that can help illiterate and semiliterate people find jobs, get medical information, and use cell-phone-based banking services through meaningful computer icons and demo videos.

Better telecommunications and ICT technology has also improved citizens’ access to human rights services -- particularly for filing complaints or requesting information from officials. Often these initiatives are introduced by the state itself with collaboration from the private sector or academic institutions. The Right to Information Act , introduced in 2005, grants citizens the right to request information from public authorities. A call center called Jankari (“information” in Hindi), set up in 2007 in the northern state of Bihar, allows applicants to file applications through their phones for a nominal cost. This project was the brainchild of social activists and private entrepreneurs collaborating with the government to ensure that the poorest citizens have channels to fight corruption by holding the government accountable.

In addition, the facility for online filing of police complaints that was introduced in some states of India, has helped many from underprivileged backgrounds report crime and sidestep bureaucratic or corruption- related delays. Citizens can file a complaint using the online portal to report the crime and choose the nearest police station to the location of the crime. Then the complainant receives a SMS text with a tracking number, after which the police acknowledges the complaint and carries out prima facie investigations. While these systems are still susceptible to corruption, the presence of electronic proof of complaint can help challenge court decisions and corrupt practices.

Such initiatives -- and there are many more -- are clearly byproducts of increased private investment in India’s ICT industry. The success of IT companies and its contribution to the economy can spur ICT projects (for development) that are of a larger scale, backed by better technology, and most suited for the environment in which it operates. While many ICT-for-development projects are operative in many parts of the world, India has benefited from innovations that are funded and powered by a more sustainable development model -- that of indigenous innovation and one that is less dependent on foreign aid, expertise and assistance.

National Security or Privacy: A False Choice
The IT and telecommunication sectors have been more forthcoming than other sectors in the country and indeed their tremendous success makes it easier for them to continue to do so. But whether these initiatives are completely private, or collaborations between private companies and the government, they are all possible in an environment of transparency, secure networks and an enlarged environment for innovation, especially the kind innovation that has aided social development. The changes the government is seeking could alter this environment.

The tussle between the advancement of technological innovation and the government’s desire to control the flow of information, or indeed to act as a repository of all information in society, is not a new one, and many of the most advanced nations have had to deal with the same issues. Interestingly, this summer there were similar efforts to increase surveillance of digital messages in the United Arab Emirates and Indonesia. In fact, The New York Times reported on September 27, 2010, that the U.S. Congress plans to introduce legislation this year that would require all services that enable communications — including encrypted e-mail systems like BlackBerry, social networking Web sites like Facebook and software that allows direct “peer-to-peer” messaging like Skype — to be “technically able to comply if served with a wiretap order.”

But in India, this debate has graver consequences. Indian law enforcement officials still lag sufficiently behind in technological prowess needed for surveillance and cryptography. While in most advanced countries, this is facilitated through a combination of intelligence and profiling without crippling legitimate businesses , Indian authorities still seem to be demanding that cell service providers and IT companies be responsible for giving the government access. The key distinction between the impending legislation in the U.S. and the Indian case is that the U.S. law will only allow expedited surveillance if companies are served with a wiretap order.

The Indian authorities need to be equipped with the latest tools and technologies to intercept data while simultaneously protecting the needs of private corporations to protect data security. They might be better off investing in upgrading and modernizing their intelligence and investigating agencies. Otherwise, from a development perspective, this legislation could hurt ICT innovation for development, which is an eventuality India can ill afford.


Gayatri Murthy is a Research Assistant for the AudienceScapes Project and helps in analyzing the AudienceScapes data, writing the Country Profiles and overall maintenance of the website. You can reach her at


Pictures Courtesy: Wayan Vota, Dipankar Dutta, Mackenzie Nicole via Flickr


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