The good and the vague of the Digital Personal Data Protection Bill 2022

Markets this week 📊

Santa Rally is what several experts are calling the market movement this week taking the benchmark indices to all-time highs. People have a fetish for alphabets and have moved from a V-shaped to a K-shaped recovery theory. Basically, large caps are doing well since they have the resources to withstand a tough business environment while mid and smallcaps are still finding the going tough. 

On a completely different note, sports kept us busy all of this week and why not! The FIFA World Cup Qatar 2022 is finally underway. It’s just been 5 days and what an absorbing tournament it has already been. We still can’t get over Messi losing to the Saudis. Unfortunately, this World Cup has attracted so many controversies that it has taken the spotlight away from the pitch, to an extent. We sincerely hope all World Cups be played and remembered for all its on-field drama ONLY! Back in India, we too had some World Cup drama of our own, thanks to JioCinema. 

You enjoy your matches with a hot latte and warm comforters and leave all financial nervousness to us. We have started a new section “Money Matters” where we will take up one pressing personal finance issue that people face in their everyday lives and demystify it for our readers because after all, money matters! Do you have any investment concerns? Write to us at advice@tavaga.com and we shall answer it in our next wrap-up.

Now, let’s now dig deep into some of the important news that made headlines this week.

How private is your privacy? 🧐

Data Privacy 2.0: 6 years after India’s Supreme Court ruled that privacy was a fundamental right, and 3 months after a previous Data Protection Bill was scrapped, the new draft Digital Personal Data Protection Bill, is up for public consultation. The draft uses she/her pronouns, the first bill in India to do so. The new draft is, undoubtedly more crisp and focused. The Bill has also been considerably shortened, containing only 30 clauses compared with 99 clauses in the earlier versions.

The good: Coming as a relief to global tech giants, the bill allows the transfer of user’s data to “trusted” countries. It also provides an elaborate framework for consent management. The bill has raised the penalty amount to up to ₹500 crores in case of violation, much higher than ₹15 crores, or 4% of the global turnover of an entity, proposed earlier. 

The vague: The new bill continues to give the government a free pass against the individual’s right to data privacy. Interdependence of the proposed Data Protection Board is also questionable as the appointment of the chairperson and board is completely left to the discretion of the central government. Comments on the new draft are invited until Dec 17 but stakeholders’ comments submitted to the Bill will not be made public, underscoring a complete lack of transparency. 

Our Take

Despite the claim for clarity, and simplicity, the new Bill still leaves room for the government to snoop on individual’s data. The regulatory body is also not free from government influence. Tell me one thing, will any such board be able to exercise any oversight and issue fines on any government authority?

Transparent, simple, and effective data legislation is crucial for India’s economic ambitions. The central government has been struggling for the last 5 years to draw up effective legislation on the same. High time, India should draw on global examples to ensure that the personal data of citizens be used only for their benefit and not misused.

WORLD

China’s self-inflicted troubles ⚠️

Tipping point: As China’s harsh Covid rules creep into its 3rd year, there are growing signs of frustration over this draconian rule across the country. Hundreds of workers at Apple’s largest manufacturing site in Zhengzhou managed by Foxconn erupted into violent protests. FYI, Taiwan-based Foxconn is Apple’s lifeline, accounting for 70% of iPhone shipments globally. The Zhengzhou plant makes most of it.

Sick and Tired: Strict measures were put in place on the premises to keep churning out iPhones. A “closed loop” system to prevent contact with the outside world, with limited meals and medical care was imposed. Thousands of workers had earlier fled the compound due to lockdown and infection fears, forcing Apple to issue warning about delayed shipments of iPhone 14 Pro and Max models. Measures like subsidies and bonuses were announced to retain them back. A possible delay in bonus payments was the final nail in the coffin.

Our Take

Xi was elected to an unprecedented third 5-year term but retaining the post of an unchallenged dictator, might be a lot harder this time. COVID-zero policy which, until a year ago, was his greatest domestic achievement, is his most pressing problem now. This rule worked for a while, as China suffered far fewer deaths per capita than other countries. But now the rest of the world has reopened and China is struggling to find an exit strategy.

China’s vaccination rate is still low. About a third of its older population has not had a third dose. Over-reliance on Chinese vaccines has made things worse. If China suddenly relaxed all restrictions, it could trigger a new pandemic wave. China’s real estate sector crisis, which was once one of the great drivers of its economic miracle, is also weighing down on the economy.

A period of slow growth and internal confusion is bound to have far-reaching consequences both economic and political. 

TECH

Another day, another exit 👋

If there is one word that sums up the corporate world in the last two months, it would definitely be “Exits”. We have either heard of mass layoffs or several high-profile resignations. After Twitter, Meta, Amazon, Google, Byju’s, Nykaa , the newest one to catch this trend is Zomato.

Drama-packed month: Euphoria over Zomato’s strong financial performance in 2Q was clouded by a string of high-level exits this month. Last Friday, co-founder Mohit Gupta called it quits after his 4.5 years stint. Third high-profile departure this month for the company after Rahul Ganjoo, head of new initiatives, and Siddharth Jhawar, head of the intercity home delivery segment. Gaurav Gupta, another co-founder, and head of supply exited abruptly last year.

Mohit Gupta was the backbone of the company. Joined in 2018 as the head of the food-delivery biz and was later elevated to the prestigious co-founder throne in 2020. Food delivery, dining, marketing, Hyperpure, and pretty much all everyday ops were in his kitty.

Our Take

The stock markets do not like senior management exits, especially if such exits come in succession. Mr. Goyal has taken the helm of affairs for the time being and these recent resignations may not be a big headache. After all, he has weathered such exits before when 4 years ago another co-founder Chaddah, and CBO left.

If rumours are to be believed, failure to get a breakthrough in any new growth avenues and stricter performance and cost controls was one of the reasons for the exit.

Several new-age companies like Paytm, Nykaa, and Delhivery, and Zomato have seen their share price tumble after IPO hype as they juggle between growth and profits. How long will investors sit on portfolio losses and wait for the tide to turn is a question to reflect on.

MONEY MATTERS 💰

We have introduced a new section in our wrap where we shall take up one personal finance query we get from our readers and give our view on the same. This week we shall talk about emergency funds. 

Do you need a bigger emergency fund in 2023?

Why: Will a recession hit in 2023? While Indian markets have been largely insulated from global headwinds, any likelihood of a recession globally is bound to impact India too. One thing that tends to go hand in hand with recession is unemployment as companies would be forced to cut back employee costs owing to reduced demand. That’s why it’s so important to have money in the bank for emergencies to help you sail through such financial surprises that life throws your way. 

How much? This will depend on your job stability and how many people are dependent on your income. The most common rule is to save enough funds to cover 3-6 months’ worth of expenses so that in case you lost your job unexpectedly, you can cover your expenses such as rent, utility bills,food, etc. You may need to save more if you are the only earning member or do not have a predictable income every month.

Where: It can be extremely daunting to save up such a large amount all in one go. So, start with small, achievable targets and build a habit of saving and living within your means. Emergencies are unpredictable, so keep your fund safe and easily accessible. A good mix of cash, savings account, and liquid funds should be used to park your emergency money. An impromptu vacation or a big splurge for yourself could be enticing and you may be tempted to dig into your emergency funds but you may regret it if a nasty situation comes along and your emergency savings are gone! So keep your emergency funds in a separate account. Save now and have peace of mind later! Read here if you want to know more about liquid fund options available.

What else made news?

🌍Planet over profit: Negotiators at the UN climate change talks finally reached an agreement that rich countries will fund poorer nations’ mitigation efforts

💸Scouting for money – Adani Ent.is planning a follow-on public offering (FPO) of ₹10k-20k crore ($1.2 -$2.5 billion) for its green and digital businesses as well as cutting down its mountain of debt. 

🤨Distress sale? – Online payments firm PhonePe is looking to buy BNPL platform ZestMoney. Deal value is estimated at $200-300 million, as per news reports

🧐Under scanner: Foreign investors and AIFs are under increased scrutiny and IT department has sent out notices to many for incorrect filings. 

👍Green Signal: Australia has cleared a free trade agreement with India opening up the Australian market for 6000+ categories of Indian exports. A start date is yet to be decided. 

Hope you liked reading this week’s wrap. See you next week. Till then, hope you have a great weekend!

Cheers,

Ruchi Mehta

https://www.linkedin.com/in/ruchimehta-tavaga/

Disclaimer: This write-up is solely for educational purposes. This in no way should be construed as a buy/sell recommendation. Please consult your investment advisor before investing.

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