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XKDR Newsletter - Issue 16
Storing consumer card data • Making Linux work • Drug quality problem in India • Economic cost of internet shutdowns • Indian labour market • INR and USD • Workshop on Public Procurement and more.
Should Consumers Be Prohibited From Storing Card Data On The Internet?
In March 2020, the RBI issued the PA/PG guidelines. One critical feature of these guidelines was the prohibition placed on Payment Aggregators and Payment Gateways from storing data on cards used by customers. Renuka Sane, Ajay Shah, and Bhargavi Zaveri-Shah had written a paper on this in 2021. This paper was published in the Indian Law Review in July 2023.
Ajay Shah also has an interview with the Economic Times on this subject.
In the paper, the authors argue that while the PA/PG regulation was aimed at protecting consumers against data breaches, it has a significant impact on ease of transactions for consumers, and shifts consumer choices and preferences. They suggest alternative approaches to address concerns relating to breaches such as better security standards, tokenisation, and liability frameworks.
A conservative path to get to a fully working Linux computer
Linux is a great operating system but getting it to work on a new machine may be challenging. The two most common workarounds are using a Chromebook or buying a machine with pre-installed Linux. In his article, Ajay Shah offers a third solution that pivots around the idea of assessing the gap between the date of a laptop release and the date of the Linux kernel.
Read the full article here.
OP-ED & COMMENTARY
Many Indian firms need more leverage: Borrowing by Indian non-financial firms has phenomenally reduced (debt-equity ratio of 1.85 in 1991-92 to 0.89 in 2021-22). Excessive leverage has its perils, but so does zero leverage. In his column in the Business Standard, Ajay Shah discusses the potential positive effects that debt financing can have, for both the shareholders and the economy.
Tackling Quality Concerns in Indian Drug Exports: In May this year, the Indian Export Policy was amended to include mandatory testing for cough syrups exported out of India. In their article on BQ Prime, Pavithra Manivannan, Charmi Mehta, and Susan Thomas argue, that this is merely a band-aid solution and that frequent incidents of contaminated drugs exported from India warrant deeper scrutiny of domestic manufacturing processes, the regulatory frameworks, and the protocols in place for quality control across the sector.
What’s choking the Indian judiciary? Courts in India are slow. This not only affects litigants but also has other macroeconomic implications. In his article on BQ Prime, Shubho Roy lays out the problems with traditional measures, such as the judge-to-population ratio and disposal rate, that are used to evaluate judicial efficiency. He discusses the potential factors that causes delays in the Indian justice system and proposes pathways to address them.
The Economic Cost Of Small Internet Shutdowns: Internet shutdowns have economic consequences. However, the rules under the Telegraph Act allow broad powers to government officials to switch off internet access and this power has been used frequently. Ajay Shah and Karthik Suresh in their BQ Prime article urge for better checks and balances on the administrative state that wields this power.
The Puzzles Of The Indian Labour Market: Employment data from the Centre for Monitoring Indian Economy's Consumer Pyramids Household Survey, for the period 2016 to 2022, reveal interesting patterns in people’s preferences - taking up a job v. holding out for higher pay and working for an employer v. self-employment. Analysing this evidence in their article for BQ Prime, Mithila Sarah and Susan Thomas argue that ‘control of time and flexibility of time’ may be an important factor underlying these preferences.
An Indian view on dollar domination: The rise of the US GDP by the 1920s and the absence of capital controls prior to the 1930s, drew international investments into the US, establishing the USD's significant role. Ajay Shah writes about prior failed attempts at dethroning the dollar and the policy pathway for India to restore global trust in the INR.
VIDEOS AND PODCASTS
New episodes of Everything is Everything, a weekly YouTube show by Ajay Shah and Amit Varma, are out.
We are hosting a monthly seminar series on Indian Legal Systems Reforms. The talks covered in the first and second, are here. We invite your participation in the upcoming seminars online or in person.
We are co-hosting a Field Workshop on Public Procurement with the Chennai Mathematical Institute, in Mumbai on the 25th of August 2023. The workshop will cover discussions on challenges that impact the outcomes of public procurement in India, and pathways to improving the state’s capacity to contract. More details on the agenda and registration here.
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