MC Interview: Component scheme, notifying DPDP rules are priorities: MeitY Secy S Krishnan

Ministry of Electronics and Information Technology secretary S Krishnan

India's Ministry of Electronics and Information Technology (MeitY) has seen rapid expansion far ahead of any other government department in the last decade.

Today, it holds sway over large swathes of governance — such as regulating speech on the internet, overseeing the national biometric authentication system, protecting personal data, incentivising the adoption of online payments, wooing chipmakers to the country and handholding the country into the age of artificial intelligence and so on.

Perhaps, it won’t be remiss to say that MeitY’s plate is overflowing.

Moneycontrol sat down with MeitY Secretary, S Krishnan, the topmost technology bureaucrat of the country, to take stock of what the government’s immediate and long-term priorities are — from data protection to chips.

Edited excerpts:

What are the top priorities for the new government when it comes to the tech ecosystem?

We are aiming for fairly substantial growth of the overall digital economy in the next five, six years. If you look at up to 2030, whether we can reach about a trillion dollars of the digital economy, which will include about $500 billion dollars on the software side which is currently about $250 billion to $254 billion and whether we can go up to somewhere a similar amount.

India’s software industry is a global powerhouse already. But, how will we achieve a similar success in hardware? 

On the electronics side, we have to encourage component manufacturing. That is a priority. The other thing is how do you make sure that the ecosystem develops for manufacturers in terms of the skilled employees and infrastructure. A favourable set of policy circumstances is being created for the entire ecosystem to be able to flourish. That is the next major priority that we have.

The two production linked incentive schemes in hardware at present, for mobile phones and IT products, will have to be supported by a component scheme.

Will that mean a separate subsidy scheme for the component makers?

With the PLI scheme, the finished product comes out of India. But if you want to ensure that the industry continues to stay anchored in India, then it is important that you have the competitive advantage preserved.

In the Indian context, today we are about 15-18 percent of the global value chain by doing the finished products. We should try to go up to at least twice that amount in terms of value addition. So, between 35-40 percent is what we are targeting as a share and that is possible only if the component value chain is created here.

Can we expect the component scheme anytime soon, like in the budget? 

We are working on it, we will try and get it out as quickly as we can.

What are your priorities on the software and data side?

As the entire digital economy expands, the data economy grows alongside. This means we have to create a legal framework. So, notifying the DPDP (Digital Personal Data Protection) Act’s rules quickly is a priority for us. We also have to make sure that emerging technologies like AI and blockchain also grow at the same time. Then that brings us to the IndiaAI mission and how we are able to push the mission and move forward.

India's digital economy, including IT services and software, needs to grow. This growth impacts not just the IT and electronics sectors, but also other industries, as digital technology is now a horizontal tool used across various sectors. The distinction between software and hardware is less relevant because modern hardware often includes embedded software.

The IndiaAI mission is soon expected to come out with a procurement tender for AI chips. Has it been decided yet if the government will buy data centre capacity and give it to startups as vouchers or directly fund data centre capex?

We should have multiple choices. Ultimately, we're doing this to enable the researchers, the innovators, the start-ups to access AI compute as quickly as possible. So, we will use every approach that is possible to enable this. It is not about one approach or another. It could be a combination of two or three approaches.

With a fresh Union Budget set to be unveiled soon, what are the key things that MeitY would be pushing for? 

We always have certain agendas, including a set of industry related issues, the incentive schemes, and the overall size of the budget that we are allocated.

Have there been any incentive disbursals from the new hardware PLI scheme introduced last year?

Not yet, because this is the first year, though 17 companies have already started manufacturing under the scheme. There may not be much disbursal this year. It will really be mostly next year.

It has been a few weeks since the formation of the new government, do you see any change in the functioning? 

We have to work on what we are given as civil servants. But there's certainly an acceleration of pace after the new government taking charge, compared to the election phase. Now that elections are done, we need to get down to business.