The Case for Adaptive Regulations Framework for Emerging Technologies in India Bishwa Pandey Follow Mar 9 · 4 min read

In the last decade, a variety of changes have impacted the world, not least of which has been digitalization. Countries are accelerating their investments in game-changing digital technologies to improve their ability to govern. India is not far behind, with the largest bio-metrics database in the world, and plans for large-scale data analytics, IoT and blockchain implementations. However, the regulations and standards needed to ensure a safe, sustainable, competitive and innovative environment are retrospective, lacking or archaic. India needs to transition from the traditional to an adaptive regulatory model to become more inclusive and keep pace with the rapid changes in the technology landscape.

These technologies come with their fair share of risks. Data analytics and machine learning suffer from the black box problem, wherein the algorithms that underpin these implementations are not known to the public and have limited governance or oversight. For AI, the liability for decisions made by machines is a matter of debate for regulators. Since the machines are coded by humans, human biases can creep into the way decisions are made. If these biases lead to discrimination that is against the law who is liable for the discrimination remains a question. Other digital technologies like blockchain and IoT add an additional layer of complication to the already complex privacy debate.

The Indian policy mechanism currently faces multiple challenges in its bid to adopt an adaptive policy position. Firstly, India, by and large, still follows the classic U.S. and U.K. approach to creating regulations, despite the mismatch in the modus operandi of the three countries. Such an approach is lengthy and typically requires a lot of time for a single rule making process. Secondly, like most countries, the Indian regulatory system is complex and fragmented, with various responsible agencies exercising overlapping authority. Finally, globalization requires increased data sharing and coordination by countries, their law enforcement agencies and individuals.

That is not to stay the Indian regulatory landscape is not adaptive. There have been several instances of unplanned adaptive regulations passed in India over the last decade. These regulations are usually legislative amendments or repeals, and through administrative agency revisions or rescissions of past rules. However, these changes are not brought about by studying data but after surprises — crisis events that upend past static regulation. Such “policy shocks” dramatize the need for regulatory change, reveal the arguable shortcomings of past regulation, spark contested framing of blame, and open windows of political opportunity for policy entrepreneurs to advance new approaches (Balleisen et al. 2017b). India needs to design and prepare institutions to monitor, analyse, and update regulations to move from static/unplanned adaptive to planned adaptive regulation.

Examining the implementation of the Aadhar system we find traces all the problems stated above The Aadhar program was implemented as a universal identification system and a vehicle for the delivery of subsidies. As time passed the Aadhar system became a means to create a national database of systems, to one to ensure security of the Indian public. Thus, different departments had a different view of what the Aadhar number was for, and how it can be used. This led to multiple linkages with existing identification processes and becoming a prerequisite for other government documents. However, this also added to the privacy concerns of the public. After a lengthy debate, the Supreme Court finally intervened and passed the Right to Privacy judgement and directed the government to amend the Aadhar bill to ensure it benefited all stakeholders and not just the government.

Traditional regulations follow the strategic triangle theory, wherein a good policy should be technically correct, politically stable and organizationally implementable. However, the digital age adds an additional node of adaptability, converting the triangle into a square.

India should consider a four-pronged approach to build an adaptive regulation framework:

Objective-based regulations: Indian regulators should change the focus of regulations from the inputs to the desired outputs. To accomplish this, regulators should define the desired outcomes rather than constricting the inputs into a system. This approach helps provide entrepreneurs and businesses more flexibility while ensuring guardrails are in place to protect citizens interest. Create a tiered approach to regulations: Not all areas require the same level of regulatory oversight. Indian regulators should create tiers of issues based on the security constraints, economic considerations and citizen rights. Regulators should focus their attention on those topics that are most critical to the nation. Simplified delivery-based regulation: The Indian policy landscape suffers from fractured and disjointed delivery mechanism. Indian regulators need to focus on developing broad-based policies that are easily implementable. Regulators should strive to create a policy system that is broad with an agile delivery system. Data Driven automated decision: Indian regulators should utilize digital technologies to improve service delivery and parallelly test the efficacy and efficiency of policy implementations. Regulators can use the existing data from implementation centers to identify which policies are working and which need to be reworked.

Regulators must be cognizant of the costs of transitioning to such an adaptive regulatory framework. Transitioning to such a framework will create some initial costs around the people and processes. The transition will initially create a dis balance in the economy due to the constant changes in the rules caused new findings. Additionally, regulators must invest in upskilling the vast untapped talent in India, train them to facilitate the adoption of the adaptive regulatory model. Such a regulatory model will be key for India to unlock the power of Her digital investments and become the superpower it aspires to be.