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iSPIRT’s Official Response to the Draft Drone Rules 2021

This is our response to the Draft Drone Rules 2021 published by the Ministry of Civil Aviation on 14 July 2021.

Introduction

The potential commercial benefits that unmanned aviation can bring to an economy has been well established in several countries. A primary and immediate use-case for drones is in Geospatial data acquisition for various applications such as infrastructure planning, disaster management, resource mapping etc. In fact, as argued in the recently announced guidelines for Geospatial data, the availability of data and modern mapping technologies to Indian companies is crucial for achieving India’s policy aim of Atmanirbhar Bharat and the vision for a five trillion-dollar economy.

The current situation in India, however, is that the drone ecosystem is at a point of crisis where civilian operations are possible in theory, but extremely difficult in practice. Because the regulations in place are not possible to comply with, they have led to the creation of a black market. Illegally imported drones are not only significantly faster, cheaper and easier to fly but also far more easily acquired than attempting to go through the red tape of the previous regulations to acquire approved drones. Thus, rather than creating a system that incentivises legal use of drones, albeit imported, we’ve created a system that makes it near impossible for law-abiding citizens to follow the law of the land and discourages them from participating in the formal system. This not only compromises on the economic freedom of individuals and businesses but it also poses a great national security risk as evidenced in the recent spate of drone attacks. If we do not co-opt the good actors at the earliest, we are leaving our airspaces even more vulnerable to bad actors. This will also result in a failure to develop a world-class indigenous drone & counter-drone industry, thus not achieving our goals of an Atmanirbhar Bharat.

The Draft Drone Rules (henceforth the draft) have addressed some of these problems by radically simplifying and liberalising the administrative process but haven’t liberalised the flight operations. Unfortunately, closing only some of the gaps will not change the outcome. The draft rules leave open the same gaps that cause the black market to be preferred over the legal route.

With the three tenets of Ease-of-Business, Safety and Security in mind, it is our view that while the intention behind the draft rules is laudable, we feel that the following areas must be addressed to enable easy & safe drone operations in India:

  1. Remove Requirement of Certificate of Airworthiness: The draft mandates airworthiness certification for drones whereas, no appropriate standards have been developed, thus, making the mandate effectively impossible to comply with.
  2. Lack of Airspace segregation, zoning and altitude restrictions: The draft doesn’t mention any progressive action for permitting drone operations in controlled airspaces.
  3. Business confidentiality must be preserved: The prescribed rules for access to data is not in consonance with the Supreme Court Right to Privacy Judgement
  4. Lack of transparent Import Policy: This results in severe restrictions on the import of critical components thus disincentivizing indigenous development of drones in India
  5. Insurance & Training must be market-driven and not mandated: We must let market forces drive the setting up of specialised training schools & insurance products & once mature they may be mandated & accredited. This will result in the creation of higher quality services & a safer ecosystem.
  6. Fostering innovation and becoming Atmanirbhar:
    A. Encouraging R&D: by earmarking airspace for testing for future drones
    B. Encouraging the domestic drone manufacturing industry: through a system of incentives and disincentivizing imports should be inherent in the Drone Rules.
    C. Recognition of Hobby flying: Hobbyists are a vital part of the innovation ecosystem; however, they are not adequately recognised and legitimized
  7. Encouraging A Just Culture: Effective root cause analysis would encourage a safety-oriented approach to drone operations. Penal actions should be the last resort and dispute resolution should be the focus.
  8. Enabling Increased Safety & Security: NPNT and altitude restrictions would enhance safety and security manifold.
  9. No Clear Institutional Architecture: Like GSTN, NPCI, NHA, ISRO, and others a special purpose vehicle must be created to anchor the long-term success of Digital Sky in India based on an established concept of operations
  10. Lack of a Concept of Operations: Although drone categories have been defined, they have not been used adequately for incremental permissions, as in other countries; rather the draft appears to prefer a blank slate approach. The failure to adopt an incremental approach can arguably be considered as one of the root causes of the drone policy failures till date in India as regulations are being framed for too many varied considerations without adequate experience in any.
1. Airworthiness

In the long term, it is strategically crucial to India’s national interest to develop, own and promulgate standards, to serve as a vehicle for technology transfer and export. The mandatory requirement for certification of drone categories micro and up is the key to understanding why the draft does not really liberalise the drone industry. It would not be too out of place to state that the draft only creates the facade of liberalising drone operations – it is actually as much of a non-starter as the previous versions of regulations.

The standards for issuance of airworthiness certificates have not been specified yet the requirement has been stipulated as mandatory for all operations above nano category in the draft (pts 4-6). However, most of the current commercial operations are likely to happen in the micro and small categories. And for these categories, no standards have been specified by either EASA or FAA. EASA’s approach has been to let the manufacturer certify the drone-based on minimum equipment requirements. On the other hand, It is only fairly recently that the FAA has specified airworthiness criteria for BVLOS operations for a particular drone type of 40kg, and which it expanded to 10 drone types in November. Building standards is an onerous activity that necessitates a sizable number of drones having been tested and criteria derived therefrom. The only other recourse would be adopting standards published elsewhere, and as of date these are either absent (not being mandated in other countries) or actively being developed (cases noted earlier). Given the lack of international precedent, the stipulation for certificate of airworthiness in the draft needs to be eliminated, at least for micro and small category drones.

2. Airspace

One of the major concerns since the early days of policy formulation in India has been the definition of airspace and its control zones. All regulations till date, including the draft, require prior air traffic control approvals for drone operations in controlled zones. However, given that controlled airspace in India starts from the ground level for the controlled zones upto 30 nm around most airports (unlike many other countries where it starts at higher levels), it effectively means no drone operations are possible in the urban centres in the vicinity of airports in India. While the Green/Yellow/Red classification system is a starting point for Very Low-Level airspace classification, the draft does not move to enable the essential segregated airspace for drone operations up to an altitude limit of 500ft above ground level.

3. Business Confidentiality

In the domain of Privacy Law, India has taken significant strides to ensure protection of individual and commercial rights over data. The draft (pt 23.) in its current form seems to be out of alignment with this, allowing government and administrations access to potentially private and commercially sensitive information with carte blanche. The models of privacy adopted in other countries in unmanned aviation are often techno-legal in nature. It is recommended that DigitalSky/UTM-SP network data access be technically restricted to certain Stakeholder-Intent mappings: executing searches for Law Enforcement, audit for the DGCA, aviation safety investigations and for Air Traffic Control/ Management. This would need due elaboration in the detailed UTM policy complemented with a legal framework to penalise illegitimate data access.

4. Insurance

One constant hindrance to compliance is the requirement of liability transfer. While the principle of mitigating pilot and operator liability in this fashion is sound, the ground reality is that as of date, very few insurance products are available at reasonable prices. The reason behind it is that insurance companies have not been able to assess the risks of this nascent industry. Assuming the regulation is notified in its current form (pt 28), arguably affording a clean start at scaling up drone operations, we will continue in this vicious dependency loop in the absence of incentives to either end. Again, market forces will drive the development of this industry with customers driving the need for drone operators to obtain insurance for the respective operations. Therefore it is recommended that initially, insurance should not be mandated for any category or type of drone operations, and instead be driven by market or commercial necessity. Over a period of time, insurance may be mandated within the ecosystem.

Similar feedback has been shared by Insurers: “Though the regulator (aviation regulator) has made mandatory the third party insurance, the compensation to be on the lines of the Motor Vehicles Act is somewhat not in line with international practices,” the working group set up by Insurance Regulatory and Development Authority of India (IRDAI) said.”

5. Training

Currently, there’s a requirement of training with an authorized remote pilot training organization (RPTO) (pt 25), applicable for micro-commercial purposes and above (pt 24). While the intent is right, it should not be mandated at the initial stage. The reality is that there are very few RPTO’s that offer training and the cost of such training is often higher than the cost of the drones themselves, while quality is inconsistent. While the current draft rules try to address this problem, they do this with the assumption that liberalizing the requirements for establishing RPTO’s will solve this problem. While this incentivizes more RPTO’s to be established, it still does not incentivize quality and leaves in place the same bureaucratic process for registration. This has been the experience of the ecosystem so far. While it is certainly reasonable to expect that remote pilots should receive training, the goal of better informed and equipped pilotry is better achieved, at this time, if left to manufacturers and market participants to drive it.

There are currently two types of training – Type training and Airspace training. Type training can be driven by manufacturers in the early days, as is the current practice, and Airspace training can be achieved through an online quiz, based on a Concept of Operations. It is our view that customers of drones will have a natural incentive to seek training for their pilots, thereby creating the market need for better quality training schools. Furthermore, as manufacturers establish higher levels of standardization and commoditization, they will partner with training schools directly to ensure consistent quality. In the upcoming years, as the drone ecosystem grows more mature, it will become reasonable to revisit the need for mandating pilot training at approved training schools, and DGCA may create a program that accredits the various RPTOs.

6. Fostering innovation and becoming Atmanirbhar
6A. R&D

To encourage institutional research and development further, we recommend authorised R&D zones be designated, particularly where low population and large areas (like deserts, etc) are available, some key areas of experimentation being long range and logistics operations which might require exemptions from certain compliance requirements.

6B. Import policy

Rather than simply delegating the entire import policy to DGFT (pt 8), there needs to be a clear statement of the import guidelines in the rules based on the following principles in the current draft:

  1. No barriers for the importation of components and intermediary goods for local assembly, value addition and R&D activities
  2. Disincentivising import of finished drone products, both pre-assembled and Completely Knocked Down. Possible avenues could be imposition of special import duty as part of well-considered policy of “infant industry protection”, a policy used successfully in the recent past in South Korea and is considered a part of the policy of Atmanirbhar Bharat by the Principal Economic Advisor to the PM, Sanjeev Sanyal.
  3. Incentivising investments in the indigenous manufacturing industry by aligning public drone procurement with the Defence Acquisition Procedure (2020) and supplemented by targeted government programs such as PLI schemes and local component requirements, which will help realise the PM’s vision of ‘Make in India’ and “Atmanirbhar Bharat’.
  4. In the long term, developing incentives for assemblers to embed themselves into global value chains and start moving up the value chain by transitioning to local manufacturing and higher value addition in India, to be in line with the PM’s vision of Atmanirbhar Bharat. Some suggestions here would be prioritisation for locally manufactured drones for government contracts, shorter registration validity for non-locally manufactured drones etc.
6C. Hobby Fliers

While research and development within the confines of institutions is often encumbered by processes and resource availability, hobby and model flying has enjoyed a long history in manned aviation as a key type of activity where a large amount of innovation happens. Hobby clubs such as The Homebrew Computer Club, of which Steve Jobs and Wozniak were members, and NavLab at Carnegie Mellon University are instances out of which successful industries have taken off. Far from enabling hobby or recreational fliers, they are not even addressed in the draft, which would only limit indigenous technology development. Legally speaking, it would be bad in law to ban hobby flying activities considering hobby fliers enjoy privilege under the grandfathering rights. A solution could lie in recognising hobbyists & establishing hobby flying green zones which may be located particularly where low population and large areas are available. Alternatively, institution-based hobby flying clubs could be authorised with the mandate to regulate the drone use of members while ensuring compliance with national regulations. The responsibility of ensuring safe flying would rest with these registered hobby clubs as is the case in Europe and USA.

7. Encouraging A Just Culture

Implementation is the key to the success of any policy. One of the key factors in encouraging voluntary compliance is an effective means of rewarding the compliant actors while suitably penalising any intentional or harmful violations. Therefore, arguably, an important step could be to build such rewards and punishments. In the context of aviation safety and security, the key lies in effective investigation of any violation while fostering a non-punitive culture. Effective investigations enable suitable corrective actions whilst minimal penal actions encourage voluntary reporting of infringements and potential safety concerns. ICAO encourages a just and non-punitive culture to enhance safety. Penal actions, if considered essential, should be initiated only after due opportunity and should have no criminal penalties except for deliberate acts of violence or acts harming India’s national security. However, considering the fallout from any unintentional accident as well, there should be adequate means for dispute resolution including adjudication.

8. Enabling Increased Safety & Security

The draft while taking a blank slate approach clearly aims to reduce hurdles in getting drones flying. However, we argue that lack of clarity on several issues or not recognising certain ground realities actually reduces the chance of achieving this. We list the details of these issues in the subsections below.

Points 13-14 acknowledge the existence of non-NPNT (No Permission No Takeoff) compliant drones and makes airworthiness the sole criteria for legally flying, provided such drone models are certified by QCI and are imported before the end of this year and registered with DigitalSky. This is a great step forward, however, keeping in mind the win-for-security that NPNT provides through trusted permissioning and logs, it is recommended that NPNT be phased back in with an adoption period of 6 months from the date of notification.

To bring back a semblance of safety to the thought process and keeping in mind that manned aviation would be operating above 500 ft except for takeoff, landing and emergencies, it would be pragmatic to enforce altitude fencing in addition to two-dimensional fencing going forward. Permissive regulation has the effect of encouraging good and bad actors alike, and this measure ensures the correct footing for the looming problem of interaction between manned and unmanned traffic management systems, where risk of mid-air collisions may be brought back within acceptable limits.

9. Institutional Architecture

The draft indicates that institutions such as QCI and Drone Promotion Council (DPC), along with the Central Government, would be authorised to specify various standards and requirements. However, no details have been specified on the means for notification of such standards as in the case of the Director-General (Civil Aviation) having the powers to specify standards in the case of manned aircraft. Such enabling provisions are essential to be factored in the policy so as to minimise constraints in the operationalisation of regulations e.g. as was observed in the initial operationalisation of CAR Section 3 Series X Part I which did not have a suitable enabling provision in the Aircraft Rules.

Further, effective implementation demands that responsibility for implementation be accompanied by the authority to lay down regulations which is sadly missed out in the draft. In the instant draft, the authority to lay down standards rests with QCI/ DPC but the responsibility for implementation rests with DGCA which creates a very likely situation wherein the DGCA may not find adequate motivation or clarity for the implementation of policy/ rules stipulated by QCI/ DPC.

It is not clear that setting up a DPC would advance policy-making and be able to effect the changes needed in the coming years to accelerate unmanned aviation without compromising safety and security. We argue that for effective policy and making a thriving drone ecosystem, Digital Sky is a unique and vital piece of digital infrastructure that needs to be developed and nurtured. In the domain of tech-driven industries, the track record of Special Purpose Vehicles (SPV) is encouraging in India, the NSDL, NPCI and GSTN being shining examples.

The field of unmanned aviation has its own technical barriers to policy making. Its fast-evolving nature makes it extremely difficult for regulators who might not have enough domain knowledge to balance the risks and benefits to a pro-startup economy such as that of India. With the context formed through the course of this paper, it is our view that an SPV with a charter that would encompass development of a concept of operations, future standards, policy, promotion and industry feedback, would be the best step forward. A key example of success to model on would be that of ISRO, which is overseen by the Prime Minister. This would remove inter-ministerial dependencies by overburdening the existing entrenched institutions.

10. Lack of a Concept of Operations

The difference in thought processes behind this draft and the rules notified on 12th March 2021 is significant and is indicative of the large gap between security-first and an efficiency-first mindsets; keeping in mind that mature policymaking would balance the three tenets. It also points to the lack of a common picture of how a drone ecosystem could realistically evolve in terms of technology capability and market capacity while keeping balance with safety and security. The evolving nature of unmanned aviation requires an incremental risk-based roadmap; the varied interests of its many stakeholders makes reaching consensus on key issues a multi-year effort. To this end, taking inspiration from various sources and focusing on the harsh realities peculiar to India, we are in the process of drafting a Concept of Operations for India.

Concluding remarks

With the goal of raising a vibrant Indian drone ecosystem, we recommend the following actionable steps be taken by policy makers:

Immediate Term – Enabling The Ecosystem

Changes to the draft

  1. Airworthiness Compliance requirements for all drone categories be removed till such standards are published
  2. Hobby flying and R&D Green zones be designated in low risk areas
  3. Guiding principles for Import policy formulation be laid out to incentivise import drone parts and de-incentivise drone models
  4. A privacy model be applied to DigitalSky ecosystem data access that technically restricts abuse while laying a foundation for a legal framework for penalties
  5. Insurance be not mandated for any drone categories
  6. The provision for setting up the Drone Promotion Council be subsumed by a SPV as discussed below
Next six months – Setting the ecosystem up for long-term success

A) NPNT be re-notified as a bedrock requirement for security

B) An SPV outside of entrenched institutions be set up with a charter to

1. Envision India’s concept of aviation operations for the next few decades

2. Formulate Future Policy and institutionalize some aspects of key enablers of operations currently missing in India:

  • Development / update of ConOps
  • Monitor / develop / customize International standards
  • Establish Standards for Airworthiness and Flight Training

3. Develop and operationalise DigitalSky in an open, collaborative fashion with oversight and technical governance mechanisms

4. Redefine control zones and segregate airspace for drone operations

5. Establish an advisory committee with equitable membership of stakeholders

6. Address all charter items of the Drone Promotion Council

Key Authors

1) Amit Garg – [email protected]

2) George Thomas – [email protected]

3) Hrishikesh Ballal – [email protected]

4) Manish Shukla – [email protected]

5) Siddharth Ravikumar – [email protected]

6) Sayandeep Purkayasth – [email protected]

7) Siddharth Shetty – [email protected]

8) Tanuj Bhojwani – [email protected]

About iSPIRT Foundation

iSPIRT (Indian Software Product Industry Round Table) is a technology think tank run by passionate volunteers for the Indian Software Product Industry. Our mission is to build a healthy, globally competitive and sustainable product industry in India.

For more, please visit www.ispirt.in or write to [email protected]

iSPIRT’s Official Response to the Draft Drone Rules 2021 from ProductNation/iSPIRT

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When one door closes…

An inspiring effort in response to COVID-19

Last Tuesday, for the first time in recorded history, India pulled the emergency brakes on all of the complex interactions that make up the economy and society of 1.3 Billion Indians.

We’re going to see a lot more cascading effects of bringing almost all economic activity to a sudden and near-complete stop. Some of those effects are already visible and others will reveal themselves over time. One thing that’s easy to predict is that this disaster, like most others, will affect Bharat more than it does India.

However, at iSPIRT, we remain impatient optimists for Bharat. It does not suffice for our volunteers to simply predict the future; we want to help create it. When the lockdown hit, we could immediately see that the country’s messy supply chains would be hard-pressed to disentangle essential services from non-essential ones. On the very first day of the lockdown itself, you may have seen videos or news about the police using their lathis on innocent essential service providers like doctors.

This is undeniably tragic, but at its heart is an information and social trust issue inherent in India. When you distil the problem, it comes down to how does the administration identify those travelling for essential-services vs those who are not. Consider this, Swiggy and Zomato alone – who only work on the last mile of one category of food – claim to have a fleet of close to 500,000. For the entire supply chain, even restricted to essential items only, will require authorisations for millions of people and another few million vehicles.

So today, we’re announcing the release of an open-source tool called, ePass. ePass is a tool to help the administration issue digital lockdown passes. These e-Passes are secure and can be verified when needed. iSPIRT got this solution going from zero to launch in less than 4 days. In the following interview, Tanuj Bhojwani speaks with Sudhanshu Shekhar, who led the effort to build the tool and Kamya Chandra, who helped liaison with the Karnataka administration.

Tanuj Bhojwani: Hey Sudhanshu, let’s start with what e-Pass is?

Sudhanshu Shekar: Sure, so the objective is to make sure that those who are on the road providing essential services or regular citizens seeking them can face minimal friction from the authorities.

We imagine a simple 4-step flow

  1. Individuals, such as you or me, or businesses providing essential services, can apply for a pass.
  2. The administration sees these requests digitally, and can authorise them from the backend, either manually or via automated rules.
  3. People can download their digitally signed passes on their devices
  4. The on-ground personnel, such as the police, can verify the curfew pass is valid by scanning it.

We’ve built tools for each part of that flow.

When we started working with the administration, they gave another great suggestion. If the beat officers could provide pre-authenticated “tokens” – like a gift-code, we could make this process even more convenient for some essential service providers. For example, they could distribute tokens to all the informal businesses in a mandi in one go, helping bring the supply-chain back online that much faster.

Tanuj Bhojwani: And you’ve made this open-source. How can a local administration use this?

Kamya Chandra: Everything is a configuration. The administration will have to decide who the approving authorities are. An admin dashboard allows bulk uploads, approvals, tracking statistics of issued passes, etc. It also allows them to configure timings, the validity of the pass, which identity fields are required, etc.

And finally, they have to instruct their beat officers to download the verification app and use it.

Tanuj Bhojwani: so the local government hosts this themselves?

Sudhanshu Shekar: Yes, the governments need to host this themselves, either directly or through a service provider. As iSPIRT, we have only provided the code and will not be providing any managed services. Even the code is open-sourced for others to use and remix as they see fit.

Tanuj Bhojwani: iSPIRT doesn’t work with the Karnataka administration normally, so how did this all happen? How did the team come together?

Sudhanshu Shekar: Sharad called me at 8 pm Tuesday or Wednesday? Maybe it was 8 in the morning. I’m no longer sure. What’s a day anyway? *laughs*

Kamya Chandra: I want to interrupt here and say I am super impressed by Sudhanshu and the rest of the team. No matter how little sleep they got, they didn’t let it affect their judgement or mood. Their decisions were always geared towards what’s the best that’s needed.

Sudhanshu Shekar: Thank you. We’re all just doing what we can.

But basically, on Monday, as Karnataka started enforcing curfew, we realised that people are going to need curfew passes. We started kicking around the idea on Monday, but there was no team. The next night the PM announced a nation-wide lockdown. We knew this was going to be a problem everywhere.

On Wednesday, the Karnataka administration also got in touch with Sharad asking for a similar solution, and they made it clear they need the solution in two days.

Sharad called and said, “I’m going to ask you about something, and you’re going to want to do it, but be really sure and think about it. This is a hard project and has very tight timelines. Everybody will understand if you say no”.

Sharad was right, I did want to do it, so I said yes and immediately got to work. I reached out to several friends and iSPIRT volunteers for help and a few – namely Mayank, Manish, Vibhav, Mohit and Ashok – agreed to help. It was easy to convince everybody, given the importance of fighting COVID. Manish has a few friends in China and was very aware about the seriousness of this situation. We quickly agreed on the basic product outline and started working. Wednesday was a flurry of activity and we got frequent reviews done with the Administration.

We realised we needed an admin console for the police to manage pass issuance. None of us was really an expert in building front-end applications and therefore, I started making calls trying to find an expert. Through referrals, I managed to reach Vishwajeet at 12 pm. I spoke to him about the project, its importance and the strict timelines. I told him we’d fail without him!

Tanuj Bhojwani: So you called a guy you’ve never met and asked him to deliver a complex task, on a ridiculous deadline for no pay nor any certificate or recognition. How did he respond?

Sudhanshu Shekar: He called his office to take a holiday. Vishwajeet sat down, worked for 15 hours straight, and delivered before time!

Kamya Chandra: *laughs* I want to add that this team, which did not know each other, did sleep shifts – including Vishwajeet, who became a volunteer that afternoon. I remember Sudhanshu taking turns with the devs to sleep at night in 2-hour batches just to keep the engine going. I’d run demos with the administration for feedback in the morning, while they all got a little shut-eye. From afternoon, they’d repeat another day and night of development.

Tanuj Bhojwani: Wow, that’s a lot of effort, and what sounds like very little sleep! What was happening on the police end, Kamya? 

Kamya Chandra: Honestly, I went in with a negative impression of the police and administration – because all you see are videos of people being beaten. However, I was very impressed with the few people I was working with. They were very knowledgeable about the challenges they were going to face operationally. Also, it was obvious they were doing their best. The first call I got from them was at 11.45pm!

They made time for our demos, gave excellent, considered feedback on all of it that has definitely helped the product. For example, we added a quick and easy way to verify the ID alongside the QR, so that it can work even if the beat policeman verifying does not have a smartphone.

All of this was happening by a remote team in lockdown. I was in Delhi talking to officers in Karnataka. Other than Sudhanshu, I’ve never met any of the other volunteers! In every other organisation, this kind of a crisis response doesn’t happen as smoothly even if the team knows each other. Anywhere else, it would have been near impossible if the team didn’t know each other.

Tanuj Bhojwani: Oh! I assumed they were all from Bangalore?

Sudhanshu Shekar: No.

 Mayank is in Bundi, a small town in Rajasthan. Kamya is in Delhi. I’m in Indiranagar, Bangalore. Ashok, our design guy, is in Koramangala and Mohit – I have no idea where he stays – I have never met him *everyone laughs*

Kamya Chandra: Knowing everyone’s location is harder, we still don’t know full names! One of the volunteers who helped us test the security of the product was Sasi Ganesan. I spelt his first and last name wrong in the first email I sent to him! He still helped though. On the 4th day of working together, I needed everyone’s last names, I still only knew Sudhanshu’s and Sasi’s!

Compared to the places I’ve worked before, I was surprised to see Pramod send an email with such savage truths. That’s a great example of how radical candour works, why it is in direct opposition to corporate culture.

Tanuj Bhojwani: *laughs* What were the “savage truths” in this email?

Kamya Chandra: To be fair to Pramod, it was more surprising than savage. Pramod said DO NOT GO LIVE (in bold and underline) until security and related aspects weren’t complete. The contents weren’t particularly shocking, but that he sent it to all of us – including people he barely knew. There was no secrecy or pretending to be bigger than we are. All our failures were also publicly available to a team we’ve never worked with before or met. It’s quite a unique experience.

Sudhanshu Shekar: Yeah, we were planning on going live on Friday, and we knew we needed to do security testing before we went live. Pramod’s email was a good one, and all fair asks about security, usability and data retention. He connected us to another iSPIRT volunteer, Sasi Ganesan for help. Ten hours before the scheduled launch, Sasi wrote back with a list of tasks we must do BEFORE we go live. This Thursday night email doubled our todo list. Thankfully, we were able to pull in Bharat, Sireesha and a few others from Thoughtworks to help close these tasks But at the time it felt brutal, we realised this was going to be a very hard few hours.

Kamya Chandra: Yeah, I think this is around the time Rohit started helping us enhance our UX. To me, this email was a clear indication of the high bar every iSPIRT volunteer must meet. Tight timelines or urgent needs are not enough to excuse sloppiness. I am glad we have senior volunteers such as Pramod to keep the bar high.

Tanuj Bhojwani: But I believe this story has a twist?

Kamya Chandra: Well, we did the demos in time, and everyone seemed very impressed. Unfortunately, the Karnataka administration decided to go with someone else. Their decision to go with someone else was disappointing for us.

However, they are policymakers making scale decisions. They probably had to keep many balls in the air and have redundancy. It’s good they have backup plans for backup plans.

They handled it with grace and were very kind about it. They sent a thank you and a commendation letter to each of our volunteers. One of the senior lady officers asked me – do you only take techies? I do not have a computer science degree, but I want to volunteer!

I told her I was an economist too and that she should definitely volunteer.

Sudhanshu Shekar: For me, the toughest part was when I heard the news that our work won’t be going live on Friday like I had promised all these guys. I was really sad. For about an hour, I tried to fight the decision, but then I realised that I would have to do the difficult thing and break the bad news to a bunch of volunteers who’ve slept less than 6 hours total in the last 72 hours.

What happened next is what surprised me the most about this whole thing.

All of them – every single one – took it so well! They all said something to the effect of working on a solution with other volunteers felt better than not working on one and worrying about the lockdown.

I thought this is the end of the line, but it was they who cheered me up and suggested we should open-source it. I was hoping to tell the volunteers to get some rest. Instead, these guys were so passionate that they worked for a couple more days to complete the documentation, which is why we were able to launch ePass today!

Tanuj Bhojwani: Wow. That’s quite a lot of team-spirit for a team that has never even met! So what happens now that this is open-source? How do you expect it will get traction?

Kamya Chandra: The decision to open-source paid off! Even though Karnataka didn’t take ePass, the officers messaged their batchmates and told them about what the volunteers did.

Sudhanshu Shekar: Now, we have demos scheduled with several other state governments as well as a few national ministries. We think this could be live in at least a couple of places soon.

Tanuj Bhojwani: That sounds like a fairy tale ending. Do you have any advice for anyone who is reading this and wants to volunteer?

Kamya Chandra: I used to work at the World Bank in DC, and we were trying to implement national-level digital systems in many countries. When we had technical challenges there, I was often told to get on a video call with iSPIRT volunteers for guidance and inputs. The more I interacted with them, the more I realised there is magic here to learn from. So I gave up my diplomatic passport and got on a plane to Bangalore!

So my advice is that you should try volunteering even if you’re many, many oceans away!

Sudhanshu Shekar: *laughs* I have a more straightforward test than Kamya’s for those who want to volunteer. These are also the three reasons I volunteer.

First, Societal Impact. You feel useful because you get to work on something that genuinely helps people.

Second, exposure to a wide variety of topics – such a different set of problems – you don’t exactly stick to your lane. Hence, you also meet people with very diverse backgrounds and work experiences. Because my peers are not age-bracketed with me, I feel like there are many lessons that I usually would’ve learned in ten years of my career, I’ve learned already at iSPIRT. 

Third, you draw energy from others’ passion. It’s just amazing to go to work with people like this every day. I’ve realised iSPIRT is a self-selecting group – it’s only the people who seek to find it, find it. It is not easy to be a volunteer, because the environment is open and the volunteers are self-driven, people will clearly be able to see if you can walk the talk. When you have people respected in a system not for who they are, but what they do, it is magical for everyone.

Tanuj Bhojwani: That is very true. Thank you for the chat!

Like Sudhanshu says, Volunteering at iSPIRT is hard and definitely not for everyone. However, if one or more of these reasons resonate with you, you should read the volunteers handbook to learn more about balloon volunteering.

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Announcement: iSPIRT Foundation & Japan’s IPA to work together on Digital Public Platforms

Information-technology Promotion Agency, Japan (IPA), Japan External Trade Organization (JETRO), and the Indian Software Product Industry Roundtable (iSPIRT) have shared common views that (i) our society will be transformed into a new digital society where due to the rapid and continued development of new digital technologies and digital infrastructure including digital public platforms, real-time and other data would be utilized for the benefit of people’s lives and industrial activities, (ii) there are growing necessities that digital infrastructure, together with social system and industrial platforms should be designed, developed and utilized appropriately for ensuring trust in society and industry along with a variety of engaged stakeholders and (iii) such well-designed digital infrastructure, social system and industrial platforms could have a great potential to play significant roles to improve efficiencies of societal services, facilitate businesses, realize economic development and solve social issues in many countries. 

Today, we affirm our commitment to launching our cooperation and collaboration through the bringing together of different expertise from each institution in the area of digital infrastructure, including mutual information sharing of development of digital infrastructure, in particular, periodic communication and exchange of views to enhance the capability of architecture design and establishment of digital infrastructure. We further affirm that as a first step of our cooperation, we will facilitate a joint study on digital infrastructure, such as (i) the situation of how such digital infrastructures have been established and utilized in India, Japan and/or other countries in Africa or other Asian regions (the Third Countries) as agreed among the parties, (ii) how the architecture was or can be designed for digital infrastructure as a basis for delivering societal services in the Third Countries and (iii) what kind of business collaboration could be realized, to review and analyze the possibility of developing digital infrastructure in the Third Countries through Japan-India cooperation. We may consider arranging a workshop or business matching as a part of the joint study to figure out realistic use cases.

Our cooperation is consistent with the “Japan-India Digital Partnership” launched between the Ministry of Economy Trade and Industry, Government of Japan and the Ministry of Electronics and Information Technology, Government of India in October 2018. We will work closely together and may consider working with other parties to promote and accelerate our cooperation if necessary.

For any clarification, please reach out to [email protected]

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iSPIRT Foundation’s Official Response to Union Budget 2019

The budget has some relief for startups, but not an outsized role in the $5 Trillion plan
 
In her first budget presented today by the newly-appointed Finance Minister Nirmala Sitharaman started her speech with strong words stating that “We do not look down on legitimate profit-making. Gone are the days of policy paralysis and license-quota-control regime”. Given the resounding mandate of the people, this government has the political capital to execute a bold budget and this is what the country was expecting. While the vision is bold, the recommendations made by the government were a mixed bag – some solid announcements, but also notable for its omissions.

Startups may, at last, see the end of the dreaded “Angel Tax” that has plagued them since 2012. The creation of an e-verification process and “special administrators” whose permission would be required before an Assessing Officer can begin inquiries against start-ups who have already received orders should extend relief to those who were excluded from the February 2019 circular by DPIIT. This can also solve for section 68 – wrt unexplained cash credits – which was the more onerous section by ensuring verification of investors. Extending the exemption of section 56(2)(viib) to Cat II AIFs also brings parity and greater participation between AIFs. The tax deduction for investments into startups saw relaxations in the holding period (5 to 3 years), reduction in the minimum threshold (50% to 25%) and extending the time period.

In this budget, the government recommitted to its ideal of a less-cash economy. By allowing digital payments to the government, they are essentially legitimizing the use of digital payment methods. Further, by disincentivizing cash withdrawals by applying TDS and mandating digital payment acceptance without charges for firms over turnover Rs 50 Crores, they will further “nudge” users into preferring paying digitally. The approach just provides for a reduction in cost and discourage cash expense. This is hardly a definite fiscal measure for incentivizing digital payment. Most importantly, the government is eating its own dogfood, and starting to make digital payments through a dedicated payments platform to its own MSME suppliers and contractors, not only boosting digital payments but providing a critical lifeline to MSMEs by reducing their working capital requirements. In fact, the government has announced a significant boost to improve the availability of credit to the economy.  This includes providing Rs 70,000 Crore to the banking system, as well as a partial credit guarantee for the purchase of Rs 1 Lakh crore of pooled assets from the NBFC system. These measures should improve the availability of credit to the private sector, and boost growth!  The govt has also announced an amendment to enable all NBFCs to lend against invoices through TReDs. These are steps in the right direction and will free up much-needed working capital for the industrial sector.

It is encouraging to see the government adopt technology to improve convenience and simplification for tax-payers. Currently, there are nearly 40 crore citizens in India with a PAN in contrast to 120 crore Indians with Aadhaar. “Interchangeability of PAN and Aadhaar” was announced by Nirmala Sitaraman which has the potential to increase the tax filing base to all Aadhar holders. The details about implementation are specified as follows. Income Tax Department shall allot PAN to every person who will be filing tax with Aadhaar and currently do not have a PAN. The demographic verification will be carried out using data from the Unique Identification Authority of India (UIDAI). Additionally, citizens who have both PAN and Aadhaar can choose to use either of the options to file their returns. While the move of interoperability clearly seems to increase ease of filing taxes, whether it would also increase the number of tax-payers in informal sectors is still a question that needs examination. Further, understanding the implications of increased data linkage includes the discussion of data security.

What was missing was an indication of “Startup India 2.0” – the new phase of Startup India. The Rs 20,000 Cr Startup Seed Fund wasn’t announced, nor were fresh incentives for investments into VC Funds or startups, rationalisation of ESOP taxation, amongst others. Lowering the LTCG ( Long term capital gain) rate on startups shares, which was alluded to in the Economic Survey, also doesn’t find mention in the Budget. Additionally, there have been no measures to help our startups list in Indian exchanges. Overall, this budget has also not delivered on promoting Rupee Capital Formation which would help local startups wean off volatile foreign capital.

Despite the Economic Survey’s focus on Data as a public good, no significant announcement was made to leverage the Data assets of the country. In the speech about soft power, while Yoga and Artisans rightfully got their place, new-age digital platforms like Aadhaar, BHIM-UPI and India Stack, which are truly world-class, did not see a mention. Recognizing these Digital Public Goods as elements of soft power that can be exported to other countries would also give a massive boost to India’s start-ups in markets abroad.

Reach out to Sanjay Jain ([email protected] ) in case you would like to know more details.

Special thanks to our volunteers Saranya Gopinath, Rakshitha Ram, Siddarth Pai, Tanuj Bhojwani, Sudhir Singh, Sanjay Jain, Nakul Saxena, Sharad Sharma, Karthik KS.