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Implementation of the IT act very slow, says a NASSCOM report

Bangalore (Karnataka), Aug 6: Implementation of the Information Technology Act by the Central Government is very slow and several gaps in the legal and regulatory framework need to be plugged immediately to enable e-initiatives to bloom, according to a report on E-commerce commissioned by the National Association of Software and Services Companies (NASSCOM). 

Inaction would lead to a loss of competitiveness in trade intensive industries and India performed poorer than all other Asian countries in the barriers that could be influenced by policy makers, infrastructure issues and legislative issues, the report prepared by the Boston Consultancy Group said. 

NASSCOM which has come out with a ten-point agenda which it would submit to the Central government this week, had pointed out various inadequacies in the governmental initiatives that need to be plugged immediately so that India could march ahead in e-commerce whose transactions could touch Rs 1,950 billion by the year 2005. 

The Certification Agencies were still not in place for e- commerce and the jurisdiction of e-commerce transactions had not clearly defined the of Permanent Establishment in the context of an e-commerce transactions. Central Information Technology Secretary R R Shah, addressing a two-day NASSCOM annual conference, said the Certification Agencies would be in place in a couple of months. 

The report said the Government need to take up several initiatives to promot `e-adoption' in the country. With its limited resources, it need to prioritise the initiatives based on their importance and criticality to e-commerce adoption. Referring to the loophole associated with electronic contracts and taxation, the report said the Indian Contract Law was not covered under the IT Act. 

Legal enforceability of electronic contracts was open to challenge and legal jurisdiction of contracts involving international parties was not definied. Similarly, the IT Act did not clarify all the issues regarding taxation of electronic transactions, and Indirect taxation (customs duty for cross-border transactions, sales tax) for goods/services delivered electronically. The IT Act was silent on issues of protection of Intellectual Property Rights in Internet space The issue of controlling cyber crime was not completely addressed. 

To promote online payments, the Government should take steps to put in place a regulatory framework for payment gateways and legalise electronic money, the report said. The NASSCOM wanted the Government to expedite the implementation of the current IT Act and enact a legislation to resolve outstanding issues to remove significant barriers for e-adoption. It should also form a working group dedicated to keep these laws relevant and up-to-date by deriving inspiration from the US. 

The report also urged the Government to address the unfinished agenda i e-governance. Internet had opened opportunities for the Government to improve its operations at all interfaces-- Government to customer, government to Government and Government to business, it said and wanted the Government to form a working group to evolve a common "e- governance architecture" for all governments, both at the Central and State levels. 

This would enable maximisation of benefits to citizens on the delivery of various services. The report said private sector participation in E-governance should also be explored to share financial risks and ensure sustainability of resources. Plans should also be in place to harness benefits from government to business through procurement savings and government to government to ensure greater transparency. 

The government should become a facilitator to determine e-commerce-related technology standards. These standards could relate to communication protocols, payment, security and documentation. The report said e-commerce offered multiple opportunities to the government to spur economic growth and bridge the urban-rural developmental divide.

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