COST BENEFIT ANALYSIS OF IT ACT - 2000

COST BENEFIT ANALYSIS DEFINITION:

It can be explained as a procedure for estimating all costs involved and possible profits to be
derived from a business opportunity or proposal.

THE COST-BENEFIT ANALYSIS PROCESS:

The first step in the process is to compile a comprehensive list of all the costs and benefits
associated with the project or decision. Costs should include direct and indirect costs, intangible
costs, opportunity costs and the cost of potential risks. Benefits should include all direct and
indirect revenues and intangible benefits, such as increased production from improved employee
safety and morale, or increased sales from customer goodwill.

A common unit of monetary measurement should then be applied to all items on the list. Care
should be taken to not underestimate costs or overestimate benefits. A conservative approach
with a conscious effort to avoid any subjective tendencies when calculating estimates is best
suited when assigning value to both costs and benefits for the purpose of a cost-benefit analysis.

The final step is to quantitatively compare the results of the aggregate costs and benefits to
determine if the benefits outweigh the costs. If so, then the rational decision is to go forward with
project. In not, a review of the project is warranted to see if adjustments can be made to either
increase benefits and/or decrease costs to make the project viable. If not, the project may be
abandoned.

BENEFITS OF CBA:

It takes into account both quantitative and qualitative factors for analysis of the value for money
for a particular project or investment opportunity. Benefits to cost ratio and other indicators are

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used to conduct such analysis. The objective is to ascertain the soundness of any investment
opportunity and It can provide a basis for making comparisons with other such proposals.

All positives and negatives of the project are first quantified in monetary terms and then adjusted
for their time-value to obtain correct estimates for conduct of cost-benefit analysis. Most
economists also account for opportunity costs of the investment in the project to get the costs
involved.

IT ACT – 2000:

The Information Technology Act, 2000 (also known as ITA-2000, or the IT Act) is an Act of the
Indian Parliament (No 21 of 2000) notified on 17 October 2000. It is the primary law in India
dealing with cybercrime and electronic commerce. It is based on the United Nations Model Law
on Electronic Commerce 1996 (UNCITRAL Model) recommended by the General Assembly of
United Nations by a resolution dated 30 January 1997. The bill was passed in the budget session
of 2000 and signed by President K. R. Narayanan on 9 May 2000. The bill was finalised by
group of officials headed by then Minister of Information Technology Pramod Mahajan. The
original Act contained 94 sections, divided in 13 chapters and 4 schedules. The laws apply to the
whole of India. Persons of other nationalities can also be indicted under the law, if the crime
involves a computer or network located in India.

The Act provides legal framework for electronic governance by giving recognition to electronic
records and digital signatures. The formations of Controller of Certifying Authorities was
directed by the Act, to regulate issuing of digital signatures. It also defines cyber crimes and
prescribed penalties for them. It also established a Cyber Appellate Tribunal to resolve disputes
rising from this new law.

The Act also amended various sections of Indian Penal Code, 1860, Indian Evidence Act, 1872,
Banker's Book Evidence Act, 1891, and Reserve Bank of India Act, 1934 to make them
compliant with new technologies. A major amendment was made in 2008. It introduced the
Section 66A which penalized sending of "offensive messages". It also introduced the Section 69,
which gave authorities the power of "interception or monitoring or decryption of any information

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through any computer resource". It also introduced for child porn, cyber terrorism and
voyeurism. It was passed on 22 December 2008 without any debate in Lok Sabha. The next day
it was passed by the Rajya Sabha. It was signed by the then President (Pratibha Patil) on 5
February 2009.

Resolution for amendment

In December 2012, P Rajeev, a Rajya Sabha member from Kerala, tried to pass a resolution
seeking to amend the Section 66A. He was supported by D. Bandyopadhyay, Gyan Prakash
Pilania, Basavaraj Patil Sedam, Narendra Kumar Kashyap, Rama Chandra Khuntia and Baishnab
Charan Parida. P Rajeev pointed that cartoons and editorials allowed in traditional media, were
being censored in the new media. He also said that law was barely debated before being passed
in December 2008.

Rajeev Chandrasekhar suggested the 66A should only apply to person to person communication
pointing to a similar section under the Indian Post Office Act, 1898. Shantaram Naik opposed
any changes, saying that the misuse of law was sufficient to warrant changes. Then Minister for
Communications and Information Technology Kapil Sibal defended the existing law, saying that
similar laws existed in US and UK. He also said that a similar provision existed under Indian
Post Office Act, 1898. However, P Rajeev said that the UK dealt only with communication from
person to person.

Petitions challenging constitutionality

In November 2012, IPS officer Amitabh Thakur and his wife social activist Nutan Thakur, filed
a petition in the Lucknow bench of the Allahabad High Court claiming that the Section 66A
violated the freedom of speech guaranteed in the Article 19(1)(a) of the Constitution of India.
They said that the section was vague and frequently misused.

Also in November 2012, a Delhi-based law student, Shreya Singhal, filed a Public Interest
Litigation (PIL) in the Supreme Court of India. She argued that the Section 66A was vaguely
phrased, as result it violated Article 14, 19 (1)(a) and Article 21 of the Constitution. The PIL was
accepted on 29 November 2012. A similar petition was also filed by the founder of
MouthShut.com, Faisal Farooqui, and NGO Common Cause represented by Prashant Bhushan.

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In August 2014, the Supreme Court asked the central government to respond to petitions filed by
Mouthshut.com and later petition filed by the Internet and Mobile Association of India (IAMAI)
which claimed that the IT Act gave the government power to arbitrarily remove user-generated
content.

Revocation by the Supreme Court

On 24 March 2015, the Supreme Court of India, gave the verdict that Section 66A is
unconstitutional in entirety. The court said that Section 66A of IT Act 2000 is "arbitrarily,
excessively and disproportionately invades the right of free speech" provided under Article 19(1)
of the Constitution of India. But the Court turned down a plea to strike down sections 69A and
79 of the Act, which deal with the procedure and safeguards for blocking certain websites.

COST:

The Government of India enacted its Information Technology Act 2000 with the objectives
stating officially as: “to provide legal recognition for transactions carried out by means of
electronic data interchange and other means of electronic communication, commonly referred to
as “electronic commerce”, which involve the use of alternatives to paper-based methods of
communication and storage of information, to facilitate electronic filing of documents with the
Government agencies and further to amend the Indian Penal Code, the Indian Evidence Act,
1872, the Bankers’ Books Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for
matters connected therewith or incidental thereto.” What does IT Act 2000 legislation deals
with? The Act essentially deals with the following issues:

Legal Recognition of Electronic Documents

Legal Recognition of Digital Signatures

Offenses and Contraventions

Justice Dispensation Systems for cyber crimes.

Why did the need for IT Amendment Act 2008 (ITAA) arise? The IT Act 2000, being the first
legislation on technology, computers, e-commerce and e-communication, the was the subject of
extensive debates, elaborate reviews with one arm of the industry criticizing some sections of the

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Act to be draconian and other stating it is too diluted and lenient. There were some obvious
omissions too resulting in the investigators relying more and more on the time-tested (one and
half century-old) Indian Penal Code even in technology based cases with the IT Act also being
referred in the process with the reliance more on IPC rather on the ITA.

Thus the need for an amendment – a detailed one – was felt for the I.T. Act. Major industry
bodies were consulted and advisory groups were formed to go into the perceived lacunae in the
I.T. Act and comparing it with similar legislations in other nations and to suggest
recommendations. Such recommendations were analyzed and subsequently taken up as a
comprehensive Amendment Act and after considerable administrative procedures, the
consolidated amendment called the Information Technology Amendment Act 2008 was placed in
the Parliament and passed at the end of 2008 (just after Mumbai terrorist attack of 26 November
2008 had taken place). The IT Amendment Act 2008 got the President assent on 5 Feb 2009 and
was made effective from 27 October 2009.

Notable features of the ITAA 2008 are:

Focusing on data privacy

Focusing on Information Security

Defining cyber café

Making digital signature technology neutral

Defining reasonable security practices to be followed by corporate

Redefining the role of intermediaries

Recognizing the role of Indian Computer Emergency Response Team

Inclusion of some additional cyber crimes like child pornography and cyber terrorism

Authorizing an Inspector to investigate cyber offenses (as against the DSP earlier)

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BENEFIT:

In general, IT (Information Technology) has brought about significant improvements in Business

operations and in the entire human life as whole. Talking about Globalization, IT has not only
brought the world closer together, but it has allowed the world's economy to become a single
interdependent system. This means that we can not only share information quickly and
efficiently, but we can also bring down barriers of linguistic and geographic boundaries. The
world has developed into a global village due to the help of information technology allowing
countries like who are not only separated by distance but also by language to shares ideas and
information with each other. In communication, IT has helped to make communication cheaper,
quicker, and more efficient. We can now communicate with anyone around the globe by simply
text messaging them or sending them an email for an almost instantaneous response. The internet
has also opened up face to face direct communication from different parts of the world thanks to
the helps of video conferencing. IT has also brought about Cost Effectiveness by helping to
computerize business processes thus streamlining business to make them extremely cost
effective money making machines. This in turn increases productivity which ultimately gives
rise to profits that means better pay and less strenuous working conditions. IT has also helped to
bridge the cultural gap by helping people from different cultures to communicate with one
another, and allow for the exchange of views and ideas, thus increasing awareness and reducing
prejudice. IT has also made it possible for businesses to be open 24 x7 all over the globe. This
means that a business can be open anytime anywhere, making purchases from different countries
easier and more convenient. It also means that you can have your goods delivered right to your
doorstep with having to move a single muscle. Lastly, IT has helped in the creation of new and
interesting jobs like Computer programming, Systems analyzing, Hardware and Software
developing and Web designing. Now that business has become very competitive, there is the
need to use IT to remain ahead and in business. Good IT use can get you ahead of competitors.
In terms of Functionality and Flexibility, internally IT can help improve infrastructure
performance thus increasing functionality and the range of options that can be pursued.
Externally, it can help create an efficient, flexible online/offline platform for doing business with
customers, suppliers and partners. In commerce, IT can internally help improve internal
operating efficiency and quality. Externally, it can help streamline and integrate channels to
market, create new channels and integrate multiple online/offline channels. IT can also help

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improve the performance of knowledge workers and enhance organizational learning. Externally,
it can improve the performance of knowledge workers in customer, supplier and partner
organizations; add information value to existing products and services; create new information-
based products and services. IT can also help attract and retain top talent; increase satisfaction,
engagement and loyalty; create a culture of involvement, motivation, trust and shared purpose.
Externally, can help attract and retain high quality customers, suppliers, partners and investors;
increase external stakeholders' satisfaction, engagement and loyalty.

CONCLUSION:

Therefore by this analysis we can state that all the costs and expenditure which is done for the IT
ACT is giving a profitable outcome which is showed by this analysis how it is beneficial to the
economy and by this analysis I want to conclude that this act is a beneficiary act which should be
in existence and should run as it is helping the country.

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