Restrictions And Fear Of Unknown Should Not Make Us Miss The Web3.0 Bus: Former IT Ministry Secretary Aruna Sharma

The first half of 2022 has seen a number of regulations coming into effect in the emerging technologies and there have been a lot of talks on regulation as well. While there has been at least a set of guidelines for some sectors, web3 startups are yet to see any established regulatory framework. Echoing similar thoughts, Dr Aruna Sharma, former secretary, Ministry of IT said restrictions and fear of the unknown should not make India miss web3.0 opportunities. 

As the number of blockchain-based web3 startups has continued to grow in India, the regulatory uncertainty has also stirred up debates around web3 founders moving bases out of India for ease of doing business. Hence, a debate on brain drain has sparked in the web3 ecosystem, although many international entrepreneurs and venture capitalists have cheered India as the potential market for web3 growth.

“India is set to be the brim of a lot of IT and software revolution. Under this revolution, our restrictions and fear of the unknown should not make us miss the bus of Web3.0. Brain drain should not happen; we can not have an Indian brain giving credit to Dubai or Singapore,” Sharma said.

Speaking during a panel discussion at the launch event of a report – IT Rules, 2021: A Regulatory Impact Assessment Study by IAMAI and The Dialogue, Sharma said rather than giving out confusing signals, there needs to be a broader recommendation for regulations in the tech ecosystem.

“If we agree to the broad principles which are coming very clear in the recommendations and everybody knows any rule coming tomorrow from any of the government’s wings, is going to be in sync with broad principles, there will be absolutely no fear, non-clarity, and they (stakeholders and investors) can plan their investment going ahead,” Sharma said.

In case of investments related to data localisation or crypto functioning, it is important to have some broad policies set and then come up with individual rules, she emphasised. Sharma also cited the example of ecommerce where in many cases, there have been contradictory rules from DPIIT, Ministry of Commerce and Consumer Affairs department. Such a situation needs a lot of correction including withdrawals of regulations or rewriting the process. 

“When we are talking about technology, it is fast evolving. Therefore the broad principles can not be compromised but technology corrections in the rule can be done and that broad principles have to be in agreement with the government, overall responsibility to ensure security and data privacy. These two sets are non-negotiables. We will have to see how the entire system sits in it and modify accordingly,” she said.

At the same panel discussion,  Dr Amar Patnaik, Rajya Sabha MP (BJD) and member of the Parliamentary Standing Committee on Finance,  also said that technology moves far ahead of regulations. Hence, there should be a principles-based system over rules-based system when it comes to IT rules, privacy or crypto laws, he opined.

According to research from the US India Strategic Partnership Forum (USISPF) and digital currency exchange CrossTower,  web3 or web3.0 can contribute over $1 Tn to the Indian GDP by 2031. However, the report added it needs the right policies and regulatory framework for such growth.