My top story Following the Apple policy violation case in
August, Whatsapp's recent policy updates is now under scrutiny by
the Competition Commission of India for allegedly breaching competition laws.
What are wider privacy concerns?
Well, the case highlights the rising regulatory pressure on tech
platforms regarding privacy and data sharing practices.
It's not just WhatsApp.
Apps like Facebook, Instagram and even doorbell apps are constantly
collecting user data.
Study by Oxford University found that 88% of apps share
user information with third parties.
This raises ongoing concerns about how data is handled, with
major tech firms under scrutiny for data handling and practices.
What are the compliance risks?
In India, violations can result in fines of up to
10% of the company's global turnover.
Globally, fines for non compliance are becoming more common.
Take for example the €225,000,000 live against WhatsApp by Ireland's
Data Protection Commission.
Now what is the solution?
Automation.
According to Gartner, 65% of the global population will have
their personal data covered under privacy laws by 2025.
Companies using automated compliance solutions report a 40% reduction in
compliance related penalties now.
This is based on a 2022 study by Thomas Reuters.
All right, for more on this, we are now being
joined by Rishi Agrawal, who is the CEO and Co
founder of Team Leads Regtech.
He's now joining us from Pune.
Let me begin by asking you, so how complex is
India's regulatory environment and what has changed in last few
years?
Well, you tonight.
Good morning.
Thanks for having me on the show.
This is a lovely morning.
India's regulatory environment is very complex.
There are 1536 unique acts and rules that affect doing
business in India.
Subsumed in them are 69,233 unique compliances across 7 categories
of the law at 3 levels.
And there are about 6618 filings that entrepreneurs have to
comply with.
From a total ecosystem point of view, a small company
with a single state operation today deals with close to
1000 unique compliances and about two and a half thousand
total compliances in a year.
Now if you translate that into about 250 business days,
that's about 10 compliances a day.
A mid size company with about 5 manufacturing plants in
India deals with about close to 12,000 compliances, which is
about over 50 compliances a day.
That's the landscape at a larger lip.
That's not it.
There are 2233 unique websites in the country that published
regulatory updates.
There are about 8000 plus regulatory changes in a year.
A small company gets affected by about 500 of these
regulatory changes.
A mid size company deals with over 1000 to 1500
regulatory changes in a year.
There is no single source of truth.
Most of these compliances are managed in an ad hoc
paper based and people dependent compliance program in the corporate
India.
That's the complexity of compliance in India.
Now the second part, part of your question, Judson, what
has changed in the last few years?
A lot has changed.
Lot has changed for the better.
You see into 2017, GST came along, 17 different indirect
tax regimes were subsumed into one tax regime.
It was highly automated.
Obviously we continue to make progress on that and improve
the level of automation, but I think we are getting
there.
In 2019 and 2020 we legislated the codes, the four
codes on labour, which kind of changed the trajectory for
our labour laws, although we are waiting for implementation yet.
But the the four codes were legislated through the passage
of Parliament.
That's a big change.
Government is largely going digital while going digital we have
created 2000 plus websites, which is the bad news.
But I think positive changes have happened.
Gen.
Vishwas 1.2 happened last year which kind of decriminalized 182
compliances under 42 different acts.
So I think things are changing for the better right
now that you mentioned technology.
Could you also make us understand why are we seeing
an increase adoption of technology for a better compliance?
Of course, we see that RBI came out with a
mandate for implementing tech based compliance management solutions in all
the banks and NBF CS of a given size.
Now that came as a notification in January of this
year.
And we think that similar notifications are going to come
out from the other governments departments as well because sheer
number of compliances that the corporations have to deal with
are 10s of thousands.
As they grow in size, there's no way that one
can bank on their memory or adopt excel based processes
in order to manage these compliances.
Technology based assurance processes are a must.
So I'm not surprised that government is going down in
that direction.
And do you see regulatory technology actively contributing to the
direct filing of other compliances?
Of course, so far only a bunch of our regulators,
the CBI, see the CBIT for direct tax and indirect
tax have enabled API based filings.
Most others still have working websites.
Each one of them have a different way of logging
in, each one of them have different ways of filing.
So all of those are still creating complexity.
And the way I see it is API based filing
is going to simplify the way people do their compliances.
So some of these platforms will see significant growth in
the near term, Right.
And before I let you go, could you also give
us an overview of the criminalization of India's employer compliances?
Thanks, Jutsana.
That's my favorite topic.
Gautam Chikarmani from Observer Research Foundation and I co-authored a
book titled Jailed for Doing Business which does dissection of
26,134 clauses of imprisonment embedded in India, 69,233 compliances.
Basically, two out of every five compliances in the country
carry clauses of imprisonment going from three months to about
10 years.
A lot of them are embedded in our labour laws.
So 68% of the criminality comes from labour laws and
within the labour laws, almost 50% of it comes from
the Factories Act of 1948.
The other categories contribute to about 8-9 thousand items.
Jan Vishwas 1.2 started the process of decriminalization.
All the tactical lapses and minor contraventions were started to
decriminalize via a single act.
We are expecting that a lot more can be done
in general, which was 2.0.
All right, that was Rishi Agarwal who is the CEO
and Co founder of Team Leads Regtech.
Thank you so much for joining us on the show
and giving your insights.
Thank you.