NASSCOM : Public Policy | Volume 3 | Issue 11

NASSCOM Report: Fuelling Entrepreneurship - Start-up Survey findings and Policy Recommendations

We released a report on easing access to capital for the start-up ecosystem in India at the National Product Conclave. The report, prepared in partnership with TiE Delhi-NCR and Grant Thornton Bharat, presents trends in equity funding deals, support available to start-ups by the government and findings of a survey of investors and entrepreneurs. It recommends the Government to:

	Encourage domestic investors to invest in start-ups by harmonising the Long-Term Capital Gains (LTCG) applicable to resident and non-resident investors, as well as the LTCG tax rate applicable to listed securities and unlisted securities.
	Enhance market opportunities for start-ups through innovative government procurement mechanisms.
	Support creation of industry-led innovation clusters to foster collaboration between start-ups, industry and academia.
	Operationalise direct overseas listings norms.

Reserve Bank of India (RBI): Discussion Paper on Charges in Payment Systems

In our feedback to the RBI on its discussion paper on 'Charges in Payment Systems', we have emphasised on addressing specific challenges in payment systems and instruments such as RTGS, UPI, card payments - credit and debit card instead of only regulating merchant discount rate, interchange rate or convenience fees. We have based our suggestions on consumer preferences, financial viability of players in the payment's ecosystem, innovation and security.

TRAI: NASSCOM-DSCI interim feedback on Consultation Paper on Artificial Intelligence (AI) and Big Data (BD) in telecom sector

In August 2022, the Telecom Regulatory Authority of India (TRAI) issued a consultation Paper on "Leveraging Artificial Intelligence (AI) and Big Data (BD) in the Telecommunication Sector". In our interim submission, we highlighted the need for sector wise examination of risks associated with the application of AI and BD against a top-down approach. We will submit our final comments by November 4, 2022, the extended deadline provided by the TRAI.

SEBI: Representation highlighting issues relating to trading window closure

SEBI issued a circular prescribing framework for restricting trading by Designated Persons by freezing PAN at security level during trading window closure period. We made a representation requesting them to clarify that the restriction will not apply in case of allotment of shares under stock option plans and acquisition of shares by conversion of warrants or debentures, subscribing to rights issue, or other corporate actions. We have also requested SEBI to allow companies to determine trading window closure commencement date as per the company policy.

Draft Punjab Industrial and Business Development Policy, 2022

In our feedback on Punjab's draft Industrial and Business Development Policy, we have suggested that (1) there should be a separate carve out in the Policy from an IT Industry perspective (2) the eligibility for incentives should be allowed for the service industry including the IT/ITeS companies.

Customs: Draft Customs (Assistance in Value Declaration of Identified Imported Goods) Rules, 2022

We have requested the Central Board of Indirect Taxes and Customs (CBIC) to (1) provide an opportunity of being heard to affected class of importers;(2) provide exemption to certain class of imports (like products imported under Information technology Agreement, imports by Special Economic Zones (SEZ) units/ SEZ developer, Authorised Economic Operator status holder.

Industry Roundtable on Analysing the draft Indian Telecommunications Bill

On October 12, NASSCOM along with Esya Centre organized an industry roundtable discussion with industry experts to analyse the draft Indian Telecommunications Bill issued by the Department of Telecommunications (DOT) in September. Several proposals in the Bill were discussed, including (1) the new definitions & licensing regime and the implications thereof, (2) the new framework spectrum management, (3) the proposed changes to the relationship between the DOT and the TRAI, and (4) the proposal to shift from a Universal Service Obligation Fund to a new Telecom Development Fund.

Masterclasses on the Cybersecurity Directions

We conducted two masterclasses on the Cybersecurity Directions released by the Indian Computer Emergency Response Team (CERT-IN) which have been in force since July 27, 2022. The masterclasses focussed on start-ups, Global Capability Centres (GCCs) and MSMEs. The objective of these masterclasses was to create situational awareness on CERT-In Directions amongst these sets of our members, to whom the Directions apply and for whom compliance may be challenging due to awareness and readiness gaps.

Panel Discussion on Models of Employment

One of the visible outcomes of pandemic on the employer-employee relationship is hybrid working arrangement. At the panel discussion held on October 18, we discussed different models of employment, like dual employment, and the resulting challenges and strategies. The panel discussion was to offer a platform to the industry to interact with the legal experts from Trilegal, Nishith Desai Associates and Deloitte to unpack some issues related to dual employment and learn from peers regarding industry practices.

Report: Enabling India's Drone Ecosystem

We are finalising a report to examine the existing policy and regulatory challenges faced by the drone industry with possible suggestions for the Directorate General of Civil Aviation to consider. The report covers challenges around talent and skill gap, government procurement, research and development of drones by private entities, etc. For more information, kindly write to apurva@nasscom.in.

Export control: Elements of an Internal Compliance Program (ICP)

We are finalising a document outlining the elements of an effective ICP to be adopted by companies engaged in export of dual-use items. This document is aimed at making it easier for the industry to comply with export control obligations. For more information, kindly write to garima@nasscom.in.

Call for inputs: Draft Indian Telecommunications Bill

We are finalising our response to the Department of Telecommunications on the draft Indian Telecommunications Bill released in September 2022. This Bill will replace the existing laws for the telecom sector and also proposes to amend the parent law for the Telecom Regulatory Authority of India. The deadline for submitting comments to the DOT is November 10^th. Kindly reach out to sudipto@nasscom.in, vertika@nasscom.in and varun@nasscom.in.

Call for inputs: Consultation Paper on Building Trust in the Open Network for Digital Commerce (ONDC)

We are finalising our response to the consultation paper released by ONDC on 'Building Trust in the ONDC Network'. The paper seeks responses on trust considerations in order placement, payments, grievance management, etc. Kindly reach out to garima@nasscom.in.

Call for Inputs: Reviewing the Standard on Online Consumer Reviews

The Bureau of Indian Standards (BIS) has released proposed changes to the text of the Indian Standard titled Online Consumer Reviews — Principles and Requirements for their Collection, Moderation and Publication. Mandatory adoption of this standard is being considered by the government to tackle consumer reviews in online businesses that publish consumer reviews and ratings. Kindly reach out to garima@nasscom.in.

Ministry of Electronics and Information Technology (MeitY): Release of Final Amendments to the IT Rules 2021

MEITY has released its final amendments to the IT Rules 2021 following up from the public consultation conducted on June 8^th (see here and our comments here). The final text factors in several of our suggestions, including (1) independence of the members in the grievance appellate committee (GAC) and (2) not mandating pre-censorship of user-generated content. We had also suggested dropping the 72 hour deadline to process complaints for prohibited content; the rules partially address this by narrowing the types of prohibited content to which the deadline applies.

MEITY: Release of Amendments to exclusions from the IT Act

MEITY has recently narrowed the list of documents or transactions that are excluded from the IT Act. Now, the Act permits more documents to be in used in digital form viz., negotiable instruments and powers of attorney empowering financial sector participants, including banks and insurance companies, and those involving immoveable property. This is an important step for paperless transactions and would need to be followed up with a review of the State level and sectoral laws to make this reform operational.

RBI: Concept Paper on Central Bank Digital Currency (CBDCs)

The RBI has released a concept paper on CBDCs to discuss the approach and features of CBDCs i.e., Digital Rupee. The paper explains the objectives, choices, benefits and risks of issuing CBDCs in Indian context. The concept paper also discusses technology considerations and design choices of CBDCs.

International Financial Services Authority (IFSCA): Standard Operating Procedure (SoP) for Inter-operable Regulatory Sandbox

The key features of IFSCA's SoP include that the FinTech department of the RBI shall be the nodal point for the sandbox and the regulators shall be ascertained on the basis of principal regulator i.e., under whose remit the dominant feature shall fall, and associate regulator i.e., under whose remit other features shall fall.

Credit Guarantee Scheme for Start-ups notified by Department for Promotion of Industry and Internal Trade (DPIIT)

The DPIIT has notified the Credit Guarantee Scheme for Start-ups (CGSS) to make it easier for the start-ups to get loans of up-to INR 10 crore from commercial banks, venture debt funds and Non-Banking Financial Companies (NBFCs). The scheme does this by guaranteeing repayment of the loan to the lender in the event of a default by start-ups in exchange of a fee.

United States (US): New Safeguards for US Signals Intelligence Activities

The US President has issued a new executive order on enhancing safeguards for signals intelligence activities carried out by the United States. This is a key step towards fulfilling commitments made to the European Commission (EC) to rectify the gaps in American law regarding the protection of individual privacy rights. This follows the announcement from March 2022, when the EC and the US agreed to a new data transfer framework to enable cross-border data transfers after the Privacy Shield was struck down in 2015.

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