Moneycontrol
Last Updated : Nov 25, 2016 06:28 PM IST | Source: Moneycontrol.com

How big data is helping in implementation of demonetisation

As the ecosystem around Big Data evolves further, it won‘t be surprising to see such schemes being challenged on the grounds of data sanctity, privacy and right of use.


By Nirav Maniar

As people queue up at banks to lay their hands on the new and legitimate currency notes, few would realise that the implementation of such gargantuan scheme could not have been possible without the use of new age tech like big data, Internet of Things (IOT), e-wallets, robotics and all that algorithm build-up and writing.


A couple of years back one could only see countries like USA, UK, Germany and China making advances in the new age tech like Robotics, Unmanned vehicles etc. Advances, if any made by India were very low key. Of course, for a country grappling with the basics, such new age technologies and innovative applications were treated more like luxury for rich or technologies of future.

To be able to think that a common man would use the same in their day-to-day life was a long shot. Being able to make payment through an e wallet or hailing a cab through taxi apps or ordering groceries online is still a challenge not only for lower income groups without smart phones but also for the Golden generation who have lived their life almost completely away from technology.

However, the current demonetisation drive by the present government hints to the contrary. It has shown the tech savvy side of the governance with massive use of data collected from various sources to strategize the demonetisation scheme, touted use of GPS enabled chips in the currency notes to locate large piles of unaccounted money hoarded (great idea which did not get implemented). Consequently, we have seen e-commerce companies and fin-tech companies gaining from this currency crunch.


But, the major player here appears to be big data and analytics. For the uninformed, big data refers to extremely large sets of data and big data analytics is the process of examining such large data sets to uncover hidden patterns, unknown correlations, trends, user preferences and other useful business information.


In this case, linking of PAN cards with almost all financial transactions gave the government access to large data for all enrolled PAN holders which could then be used to bring out trends and correlations which otherwise are not accessible even through the efficient banking and other reporting systems in place. The technology eased both collection and analysis of data and calling the outliers became much easy, quick and efficient.


In regulatory parlance, use of data is much different than in situations where data is exploited for business and gains. The Government exercised its rights and powers under the constitution and legislations made thereunder. The major challenge with the new age concepts like Big Data is absence of precedence hence the legislations are made or rather borrowed from developed countries.


In India, the Information Technology Act, 2000 (IT Act) is the only legislation, which addresses data protection. It is interesting to note that until 2011, there was no specific legislation dealing with sensitive personal data or information (SPDI) until the Government introduced ‘The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011 under the IT Act.

Even though the rules find their origin in OECD guidelines on ‘the protection of privacy and the trans-border flow of personal data’ which came out in 1998 and European Union Directives (1995), the practical aspects of application in India are still being uncovered and judicial precedents still developing.


In the given scenario, the usage and sanctity of data to initiate demonetisation may not be challenged since the law is settled so far as this move of Government is concerned. However, as the ecosystem around Big Data evolves further, it won’t be surprising to see such schemes being challenged on the grounds of data sanctity, privacy and right of use.

(The author is Head Regulatory and Assurance Practice, IB Advisors. Views expressed are personal.)

First Published on Nov 24, 2016 03:54 pm
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