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Context:

Increase in cyber frauds with increase in internet, e-commerce and net banking services.

What is digital Economy?

The digital economy is a global network of economic activity and transactions that are enabled by information and communication technologies (ICTs), such as the internet, mobile devices, and cloud computing. 

How Digital economy is different from traditional Economy?

Digital Economy	Traditional Economy
Based on digital technologies, internet, data, and online platforms.	Based on physical goods, services, and offline interactions.
Driven by data, algorithms, AI, and cloud computing.	Driven by manual processes, machinery, and physical resources.
Faces issues like data privacy, cybersecurity, platform monopolies.	Faces issues like labour laws, physical logistics, trade barriers.
Requires digital literacy, coding, data analysis, AI skills.	Requires manual skills, manufacturing, traditional services.

Why we need to safeguard digital economy?

• To maintain trust, comply with privacy laws
• To avoid economic shocks and ensure smooth digital financial operations
• To protect sovereignty and prevent cyber warfare 
• To ensure safe digital transactions and consumer protection
• To prevent digital inequality and support inclusive growth
• To ensure ethical, fair, and competitive digital systems

Measures to safeguard India’s Digital Economy

• Strengthening Cybersecurity Infrastructure
• National Cyber Security Policy: Revise and implement an updated policy to address modern cyber threats.
• Cybersecurity Operations Centres: Establish sector-specific security operations centres for finance, healthcare, energy, etc. 

• Data Localization: Mandate sensitive data to be stored on Indian servers to prevent foreign surveillance and jurisdiction issues. 

• Indigenous development in Tech: Encourage development and adoption of indigenous software and hardware to reduce dependence on foreign tech. 

• Open-Source Platforms: Promote secure, open-source alternatives for critical applications to enhance transparency and resilience. 

• Nationwide programs to educate citizens about phishing, malware, secure password practices, etc. 

• Establish fast-track courts for digital and cybercrime cases. 

• Cross-border Data Governance: Collaborate on international frameworks for secure and lawful data exchange. 

• Implement a "never trust, always verify" security model in government and enterprise IT systems. 

Measures taken by government to safeguard India’s digital Economy

• The Central Government supplements the initiatives of the State Governments through advisories and financial assistance under various schemes for their capacity building.
• Ministry of Home Affairs has provided financial assistance to all the States & UTs under Cyber Crime Prevention against Women & Children (CCPWC) scheme to support their efforts for setting up of cyber forensic-cum-training laboratories, training, and hiring of junior cyber consultants.
• Cyber forensic-cum-training laboratories have been commissioned in 18 States.
• The Central Government has taken steps for spreading awareness about cybercrimes, issuance of alerts/ advisories, capacity building/ training of law enforcement personnel/ prosecutors/ judicial officers, improving cyber forensic facilities etc.
• The Government has established Indian Cyber Crime Coordination Centre (I4C) to provide a framework and eco-system for LEAs to deal with the cybercrimes in a comprehensive and coordinated manner.
• The Government has launched the National Cyber Crime Reporting Portal (www.cybercrime.gov.in), to enable public to report incidents pertaining to all types of cybercrimes, with a special focus on cybercrimes against women and children.
• A toll-free number 155260 has been operationalised to get assistance in lodging online cyber complaints.
• Citizen Financial Cyber Fraud Reporting and Management System module has been launched for immediate reporting of financial frauds and to stop siphoning off fund by the fraudsters.

Conclusion

• It is high time that we consider amendment of the existing IT Act, 2000, which is not fully synced with today’s cyber threat.
• In addition to the IT Act, it’s already delayed but high time to introduce data privacy laws.

Practice Question In the context of India’s rapidly growing digital economy, discuss the key measures required to safeguard it against emerging cybersecurity threats. Also, highlight the role of regulatory frameworks and public awareness in ensuring a secure digital ecosystem. (15 marks, 250 words)

Frequently Asked Questions (FAQs)

What is meant by digital economy?

Economic activities driven by digital technologies, including digital payments, e-governance, e-commerce, fintech, digital infrastructure and data driven services.

What are the main threats to digital economy?

• Cyberattacks
• Data breach
• Weak data protection laws

How does the Digital Personal Data Protection Act, 2023 contribute to digital security?

It provides more control over their personal data, and consent-based data processing.