28 Jul 2018: UPSC Exam Comprehensive News Analysis

A. GS1 Related

B. GS2 Related

• The draft personal data protection Bill, 2018, submitted by the Justice B.N. Srikrishna-headed expert panel, has proposed that critical personal data of Indian citizens be processed in centres located within the country.
• The draft law, which comes after a year-long consultation process, however, has left it to the government to notify categories of personal data that will be considered critical.

Draft Bill

• The draft Bill, which India hopes will become a model framework for personal data protection for the world, will apply to processing of personal data within India, including the State.
• For data processors not present in India, the Act will apply to those carrying on business in India or other activities, such as profiling, which could cause privacy harms to data principals in India.
• The draft also provides for penalties for the data processor as well as compensation to the data principal to be imposed for violations of the data protection law.
• It has suggested a penalty of ₹15 crore, or 4% of the total worldwide turnover of any data collection/processing entity, for violating provisions.
• Failure to take prompt action on a data security breach can attract up to ₹5 crore or 2% of turnover in penalty.
• Personal data, the draft law states, may be processed on the basis of the consent of the data principal, given no later than at the commencement of the processing.
• The processing of sensitive personal data should be on the basis of explicit consent.
• The law will not have retrospective application and will come into force in a structured and phased manner.
• Processing that is ongoing after the coming into force of the law would be covered.
• Other personal data may be transferred outside the territory of India with some riders. However, at least one copy of the data will need to be stored in India.
• On right to be forgotten, the draft states that data principal will have the right to restrict or prevent continuing disclosure of personal data by a data processor.
• The committee has not treated data as property as the relationship between the individual and entities with whom the individual shares his personal data is one that is based on a fundamental expectation of trust.
• The draft law will go through the process of inter-ministerial discussions and the Cabinet as well as parliamentary approval.

Significance

• Justice Srikrishna stated that this report is the first step towards data protection and as technology changes, it may become necessary to fine-tune the law.

Data Protection Authority

• The Justice Srikrishna committee has recommended the creation of a Data Protection Authority that will be in charge of ensuring that entities processing data do so in keeping with the law.
• The DPA, a sector agnostic body, will ensure that every entity that handles data is conscious of its obligations and that it will be held to account in case of failure to comply.
• The authority will be governed by a board consisting of six whole-time members and a chairperson appointed by the Union government on the recommendation of a selection committee.
• The selection committee shall consist of the Chief Justice of India or her nominee (who is a judge of the Supreme Court of India), the Cabinet Secretary, Government of India, and one expert of repute who has special knowledge of, and professional experience in, areas related to data protection, information technology, data management, data science, cyber and Internet laws and related subjects.
• The members of the DPA are to be individuals of integrity and ability with special knowledge of, and professional experience of not less than 10 years in, areas related to data protection, information technology, data management, data science, cyber and internet laws and related subjects.
• The DPA members will have a five-year term, subject to a suitable retirement age and their salaries will be prescribed by the Central government.
• Broadly, the DPA will have four departments and related functions: monitoring and enforcement; legal affairs, policy and standard setting; research and awareness; and inquiries, grievance handling and adjudication.
• The DPA will be stating codes of practice, conducting inquiries, and issuing warnings and injunctions.

Exemptions

• The expert committee has recommended that processing of data for certain interests such as security of the state, legal proceedings, research and journalistic purpose, may be exempt from certain obligations of the proposed data protection law.
• For the creation of a truly free and fair digital economy, it is vital to provide certain exemptions from obligations that will facilitate the unhindered flow of personal data in certain situations.
• These exemptions derive their necessity from either a state or societal interest.
• It, however, added that adequate security safeguards must be incorporated in the law to guard against potential misuse.
• The processing of personal data in the interests of the security of the state shall not be permitted unless it is authorised pursuant to a law and is in accordance with the procedure established by such law, made by Parliament and is necessary for, and proportionate to, such interests being achieved.
• It has been recommended in the report that the Central government should expeditiously bring in a law for the oversight of intelligence gathering activities.
• The research exemption has not been envisaged as a blanket one and only those obligations that are necessary to achieve the object of the research will be exempted by the Data Protection Authority (DPA).
• It further added that to strike a balance between freedom of expression and right to informational privacy, the data protection law would need to signal what the term ‘journalistic purposes’ signifies, and how ethical standards for such activities would need to be set.

Protecting the data of children

• The committee on data privacy has made specific mention of the need for separate and more stringent norms for protecting the data of children, recommending that companies be barred from certain types of data processing such as behavioural monitoring, tracking, targeted advertising and any other type of processing which is not in the best interest of the child.
• It is widely accepted that processing of personal data of children ought to be subject to greater protection than regular processing of data.
• The justification for such differential treatment arises from the recognition that children are unable to fully understand the consequences of their actions.
• This is only exacerbated in the digital world where data collection and processing is largely opaque and mired in complex consent forms.
• Safeguarding the best interests of the child should be the guiding principle for statutory regulation on protecting data of children.
• The committee noted that, at present, there were two types of entities processing the personal data of children. The first type were services offered primarily to children, such as YouTube Kids, Hot Wheels and Walt Disney, and the second were social media services such as Facebook and Instagram.
• The committee recommends that the Data Protection Authority will have the power to designate websites or online services that process large volumes of personal data of children as guardian data fiduciaries.
• Certain types of data processing have been objectively found to be harmful for children. Harm, as used here, may be tangible [in terms of physical or reputational harm] or intangible [in terms of loss of autonomy]. These include: behavioural monitoring, tracking, targeted advertising and any other type of processing which is not in the best interest of the child.
• Guardian data fiduciaries must be barred from these practices insofar as it pertains to children.
• The committee noted that this approach, of placing the onus of properly processing the data of a child on the company, is preferable to the existing regulatory approach which is based solely on a system of parental consent.
• A dominant criticism against parental consent is that it is prone to circumvention, as it risks encouraging children to lie about their age, without achieving the intended purpose of protection.

C. GS3 Related

D. GS4 Related

E. Editorials

Context

• Bilateral trade deals cannot create an environment conducive to trade expansion in a world where much of trade consists of global value chains that stretch across several countries.
• Trade restrictions will only lower incomes and demands elsewhere in the world, which, in turn, will lower the demand for high-tech exports from the US, and, to that extent, reduce some of the new employment being created in the US economy

Background:

• Trump is not the first US president to doubt the effectiveness of the WTO in protecting US interests.
• The US and other industrialized countries have long felt that with the changing contours of global trade and economic integration, the only way trade can be seen as fair is if it comes with deeper integration on issues such as consumer safety standards, labour standards, intellectual property standards, Developing countries have strongly opposed these “behind the borders” measures.

Highlights of the issues

• If the US politics pushes the administration to act against the country’s own long-term interest, there is not much that the world can do.
• US President Donald Trump has imposed unilateral tariff increases on some of the US’s major trading partners and there are threats of more increases to come.
• Retaliatory tariffs have also been announced.
• The US effectively used its leadership capacity to mobilize a group of “likeminded countries”, covering 60% or so of world trade, to subscribe to higher standards, presenting larger developing economies. They could apply to join the new grouping with the new rules, or stay outside with correspondingly less market access.

World Trade Organization (WTO) views:

• “Whether or not you call it a trade war, certainly the first shots have been fired.” WTO said that this is the time for any one concerned about the world trading system to speak up.
• Since the consensus rule on which the WTO works made it impossible for the industrialized countries to make progress in this area within the WTO, they turned to plurilateral arrangements, such as the Trans-Pacific Partnership (TPP) with East Asia and the Transatlantic Trade and Investment Partnership (TTIP) with Europe.
• Multilateralism was replaced by plurilateralism, but with the WTO dispute settlement mechanism still available to settle disputes within the new arrangements.

Can bilateralism succeed?

• The problem is that bilateral trade deals cannot create an environment conducive to trade expansion in a world where much of trade consists of global value chains that stretch across several countries.
• Each export or import includes many components imported from elsewhere. For trade based on global value chains to flourish, what is needed is a common set of rules for all countries participating in the value chain.
• This is best achieved by a multilateral agreement or, as a second best, a plurilateral agreement that is sufficiently inclusive.

Misconceptions among the industrialized countries

The protectionist sentiment in industrialized countries is driven by mistaken notions.

1. That trade imbalances reflect unfair trade policies followed by others.

• They are the consequence of excess aggregate demand, which spills over into the balance of payments, and the solution lies in macro economic policy, not trade policy.
• There are unfair trade policies which need to be curbed, but mere existence of a trade deficit does not prove unfair trade policies.

2. That unemployment in some sectors justifies protectionist actions.

• In fact, much of the unemployment in individual sectors in the US is the result of structural and technological changes which have altered competitiveness, generating more employment in sectors where the US is highly competitive (e.g. the high-tech sectors) while reducing it in others where it is no longer competitive.
• The loss of employment in individual sectors is a genuine problem, but the solution lies in migration, reskilling and regional restructuring, not restricting trade.
• There is also a more general apprehension that new technologies such as Artificial Intelligence, will lead to the elimination of a large percentage of jobs that currently exist.

3. The US has often complained of exchange rate manipulation as a form of unfair trade. Exchange rate manipulation is recognized as a problem in the articles of both the International Monetary Fund (IMF) and the WTO.

• The IMF is specifically mandated to identify cases of currency manipulation. There is obviously room here for clarifying procedures and streamlining them to facilitate “legitimate multilaterally sanctioned action” against unfair trade.
• The WTO can legitimize trade retaliation against a country that is found to be engaging in currency manipulation.

The way forward

• We should use the G20 Summit, to be held in Argentina in November, to have a full discussion on the multilateral trading system at the Summit level.
• The G20 at the summit level was extremely effective after the financial crisis in 2008 when it delivered results which were not forthcoming from the G20 finance ministers meet. If the world is indeed on the brink of trade wars, it is time for the G20 Summit to get into action again.
• Reaching an agreement on trade will be more difficult than in the IMF and the World Bank. These institutions require only a decision of the boards, based on weighted voting. The US vote share allows it to veto anything it doesn’t want, but once the US is on board, anything the G20 collectively agrees on will sail through. This is not true of the WTO, where decisions are by consensus.
• However, a consensus among the G20, which account for 80% of world trade, would create a strong basis for action.
• This is also the right time to reconsider the consensus rule and let decisions in the WTO be taken on the basis of a weighted majority vote, with the weights being the share of trade in goods and services.

Concluding remarks

• In a world where dark clouds are gathering over multilateral trade, India would do well to accelerate its integration into regional groups such as the Regional Comprehensive Economic Partnership and the India-European Union Free Trade Agreement which we have been negotiating for far too long.

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1. Fillip for neglected parents

Question 1. Consider the following statements:

1. Article 23 permits state to impose compulsory service for public purposes.
2. Article 23 allows gender-based discrimination.

Which of the above statement(s) is/are incorrect?

1. Only 1
2. Only 2
3. Both 1 and 2
4. Neither 1 nor 2

See

Question 2. According to the Lucknow Pact which was signed between INC and Muslim League
in 1916:

1. Muslims were to be given one-third representation in the state government.
2. Separate electorates for Muslims were accepted.
3. Self-government in India was to be demanded.

Which of the above statement(s) is/are correct?

1. Only 1 and 2
2. Only 2 and 3
3. Only 1 and 3
4. All of the above

See

Question 3. Consider the following statements about Abdul Ghaffar Khan:

1. He was popularly known as Frontier Gandhi.
2. He was the leader of Khudai Khidmatgars (Red shirts).
3. Khudai Khidmatgar was a Pashtun violent movement against the British Empire by the people of the North-West Frontier Province.

Which of the above statement(s) is/are incorrect?

1. Only 1
2. Only 2
3. Only 3
4. None of the above

See

Question 4. Which of the following statements with respect to the Central Water Commission 
is incorrect?

1. It is charged with the general responsibilities of coordinating the schemes for control, conservation and utilization of water resources throughout the country.
2. It is headed by a Chairman, with the status of Ex-Officio Secretary to the Government of India.
3. Both a and b
4. None of the above

See

1. The draft Data protection Bill is not just about the protection of the rights of citizens. Analyse the statement.
2. Climate change has emerged as a significant challenge to urban planning. Suggest ways to deal with the challenge.

Also, check previous Daily News Analysis

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