The sources of revenue collection have evolved over time. Various governments have explored multiple avenues to enhance revenues, including through national assets such as telecom, mining and monetisation of assets. The trend has been to keep identifying newer non-tax revenue sources that do not directly impact people.
Over the years, the government has created a new asset class through focus on digitisation. The digital economy has given rise to tremendous amount of data, which becomes a landmark in the further development of digital economy. It also gives consumer more control over their information, more feedback on products, more choices for their consumption, more convenience in managing their lives and more confidence in organizing things.
At the same time, digitization helps service providers structure their product and services, and its delivery. It also helps identify target markets and segments. Therefore, data is a win-win for both consumers as well as service providers.
The biggest owner of all forms of data, whether digital or physical, in the country is the government. The government and its agencies have over the last few years acquired a goldmine of data with the rollout of initiatives like GST, Aadhar, fastag, e-bills, securities market, banking data with regulators, among others. Combining various digitisation initiatives, the government today has vast amount of data pertaining to transport and movement of people and goods – by road, port, airport, whether domestic or international; city transport; timing of it; type of vehicle; time taken, etc.
Banking-related data not at account level, but in aggregation, can provide different patterns about markets, wealth distribution, industry type, etc. Capital markets data and their analysis have the potential to create a huge data platform. The government’s procurements – through agencies such as government’s e-commerce portal, GEM – has the potential to make another Amazon-like entity. Aggregation of health records, entertainment and consumption data, land and physical premises records, agriculture and livestock data, tourism data, tax collection and industry or trade level data, and data with local civic bodies could all be potentially revenue generating.
Management and monetisation of this largest pool of data can be more effective and revenue-generating if the government can create a country-wide digital data library. Conversion of physical data into digital form going forward could add to this library. An adequate framework on right mining and monetisation of this can be invaluable for the government. Given the focus on digitisation, the data can be used more productively and could generate value for everyone.
Of course, to ensure confidentiality and data protection at individual and entity level, the data would have to be aggregated in a non-identifiable bank through identity-masking. A safe, effective, and inclusive digital data infrastructure could be productive for all constituents, and revenue generating for the government. It can create a new foundation for the economic growth towards broader participation, creation of more choices, fostering of new ideas through innovative data sets and interoperability. This innovative, productive and competitive data ecosystem created through aggregation of government’s databank would give more confidence to consumers to share their data thereby making the digital data library more comprehensive in future.
Using latest data mining and data science technologies, this data can be used for a host of purposes beginning from government’s own use for better governance to private sector using it for better efficiency in sales, distribution, product conceptualization, etc. Some of this data may already be getting used by the private sector without any revenue generation.
While the concept of a digital data library seems overall beneficial, data confidentiality, personal identity, and individual data protection, would be the biggest challenge. A consumer data protection law and a separate data owning body of the government could safeguard the individuals while also enabling the government to use this data more effectively and safely.
This will overcome the connectivity issues between various data generator and users and enhance the opportunities for connecting the consumer data to the data economy. It will significantly improve the efficiency of our digital economy. A balance approach to safety, efficiency and effectiveness is needed.
It should be based on the four fundamental principles – beyond data sharing, towards data empowered consumers; beyond open banking, towards an economy wide foundation; beyond a standalone system, towards an integrated data ecosystem; and beyond our borders, towards international digital opportunities.
In nutshell, the government should explore efficient use of the enormous assets that it has created in the form of digital data through creation of a Digital Data Library of India.