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The Covid-19 pandemic has made an unprecedented impact on the Indian businesses, particularly small and medium enterprises (SMEs) and startups. According to a joint survey by FICCI and Indian Angel Network (IAN), the pandemic has hit the businesses of around 70% startups.

With uncertainty in the business environment and an unexpected shift in priorities of the government as well as corporates, many startups are struggling to survive, it says.

In a nationwide survey on the 'Impact of Covid-19 on Indian Startups' involving 250 startups, 70% participants said their businesses had been impacted by Covid-19 and around 12% had shut operations.

The survey shows only 22% startups have cash reserves to meet the fixed cost expenses over the next 3-6 months, and 68% are reducing operational and administrative expenses.

Around 30% of the companies said they would retrench employees if the lockdown was extended too long. The 43% startups have already started 20-40% salary cuts over April-June.

Over 33% startups said investors had put the investment decision on hold and 10% said the deals had been scrapped. Only 8% startups had received funds as per the deals signed before Covid-19 outbreak, the survey revealed.

The reduced funding has forced startups to put a hold on business development and manufacturing activities, which has resulted in loss of projected orders.

The survey highlights the need of an urgent relief package for startups, including possible purchase orders from the government, tax relief and swifter tax refunds, and immediate fiscal support measures, including grants, soft loans and payroll grants.

Besides 250 startups, 61 incubators and investors also participated in the survey.

While 96% of investors accepted that their investments in startups had been impacted by Covid-19, 92% said their investments in startups would continue to be low over the next six months.

Around 59% investors said they would prefer to work with the existing portfolio firms in the coming months. Only 41% said they would consider new deals.

"A comparison of priority investment sectors before and during Covid-19 shows 35% investors are now looking at investments in healthcare startups, followed by EdTech, AI/Deep Tech, FinTech and Agri," said the survey.

Around 44% incubators surveyed said their day-to-day operations had been considerably hit by Covid-19. Most incubators are now supporting their portfolio firms by providing them virtual platforms to interact with mentors, investors and industries.

Dilip Chenoy, FICCI Secretary General, said, "The startup sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months."

Indian startups needed an enabling ecosystem and flow of funds to continue operations, the survey said.

Padmaja Ruparel, President, Indian Angel Network & Co-Chair of FICCI Startup Committee, said, "In these uncertain times, as investors, we must play an important role to provide the Indian startups funding, mentoring and hand-holding support to stay afloat and come out at the other end of this crisis."

To that end, IAN recently announced a debt fund to help IAN portfolio companies raise working capital and ensure business continuity by partnering with debt providers.

This must be replicated on a wider scale, so a larger number of startups are provided the capital support to make it during these tough times, Ruparel said.

Consumer watchdog Which? has claimed that more than one billion Android phones and tablets are vulnerable to hackers as they no longer supported by security updates.

According to the research report, the most at-risk phones are any that run Android 4 or older and those smartphones running Android 7.0 which can not be updated are also at risk.

Based on data from Google analysed by Which?, two in five android device users around the world are no longer receiving the important updates. Currently, those devices are unlikely to have issues, but the lack of security leaves them open to attack.

"It is very concerning that expensive Android devices have such a short shelf life before they lose security support, leaving millions of users at risk of serious consequences if they fall victim to hackers," Kate Bevan editor Which? said in a statement.

"Google and phone manufacturers need to be upfront about security updates with clear information about how long they will last and what customers should do when they run out. The government must also push ahead with planned legislation to ensure manufacturers are far more transparent about security updates for smart devices and their impact on consumers," Kate added.

Android phone released around 2012 or earlier, including popular models like the Samsung Galaxy S3 and Sony Xperia S, are particularly at risk to hackers.

Which? has made suggestions to Android users on what to consider if they have an older phone that may be at risk.

Any Android device which is more than two years old, check whether it can be updated to a newer version of the operating system. If it is on an earlier version than Android 7.0 Nougat, try to update via Settings> System>Advanced System update.

In case a user is not able tto update the phone, the device could be at risk of being hacked if it is running a version of Android 4 or lower.

A user also need to be careful about downloading apps outside the Google Play store and should also install a mobile anti-virus via an app.

Feb 27: With the window to submit comments on India's proposed personal data protection law closing on Tuesday, a period of anxious wait for final version of the Bill started for social media firms.

This comes even as global Internet companies have called on the government for improved transparency related to intermediary Guidelines (Amendment) Rules and allay fears about the prospect of increased surveillance and prompting a fragmentation of the Internet in India that would harm users.

As per the proposed amendments, an intermediary having over 50 lakh users in the country will have to be incorporated in India with a permanent registered office and address.

When required by lawful order, the intermediary shall, within 72 hours of communication, provide such information or assistance as asked for by any government agency or assistance concerning security of the state or cybersecurity.

This means that the government could pull down information provided by platforms such as Wikipedia, potentially hampering its functioning in India.

In the open letter to IT Minister Ravi Shankar Prasad, leading browser and software development platform like Mozilla, Microsoft-owned GitHub and Cloudflare earlier called for improved transparency by allowing the public an opportunity to see a final version of these amendments prior to their enactment.

According to a Business Insider report, Indian users may lose access to Wikipedia if the new intermediary rules for internet and social media companies are approved.

Since the rules would require the website to take down content deemed illegal by the government, it would require Wikipedia to show different content for different countries.

Anusha Alikhan, senior communications director for Wikimedia told Business Insider that the platform is built though languages and not geographies. Therefore, removing content from one country, while it is still visible to other country users may not work for the company’s model.

India is one of Wikipedia’s largest markets. Over 771 million Indian users accessed the site in just November 2019.

Also read: Explained: What is the Personal Data Protection Bill and why you should care

The Personal Data Protection Bill, 2019, which was introduced in Lok Sabha in the winter session last year, was referred to a Joint Parliamentary Committee (JPC) of both the Houses.

The government last month decided to seek views and suggestions on the Bill from individuals and associations and bodies concerned and the last date for submitting the comments was on Tuesday.

Prasad, while introducing the Personal Data Protection Bill, 2019, in the Lok Sabha on December 11, announced that the draft Bill empowers the government to ask companies including Facebook, Google and others for anonymised personal data and non-personal data.

There was a buzz when the Bill's latest version was introduced in the Lok Sabha, especially the provision seeking to allow the use of personal and non-personal data of users in some cases, especially when national security is involved.

Several legal experts red-flagged the issue and said the provision will give the government unaccounted access to personal data of users in the country.

In their submission to the JPC, several organisations also flagged that the power to collect non-personal and anonymised data by the government without notice and consent should not form part of the Bill because of issues regarding effective anonymisation and potential abuse.

"Clauses 35 and 36 of the Bill provide unbridled access to personal data to the Central Government by giving it powers to exempt its agencies from the application of the Bill on the basis of various broad worded grounds," SFLC.in, a New Delhi-based not-for-profit legal services organisation, commented.

The Software Alliance, also known as BSA, a trade group which includes tech giants such as Microsoft, IBM and Adobe, among others said that the current version of the privacy bill pose substantial challenges, including the sweeping new powers for the government to acquire non-personal data, restrictions on data transfers, and local storage requirements.

"We urge the Joint Parliamentary Committee, as it considers revisions to the Bill, to eliminate provisions concerning non-personal data from the Personal Data Protection Bill and to remove the data localisation requirements and restrictions on international data flows," said Venkatesh Krishnamoorthy, Country Manager-India, BSA.

The Personal Data Protection (PDP) Bill, 2019 draws its origins from the Justice B.N. Srikrishna Committee on data privacy, which produced a draft of legislation that was made public in 2018 ("the Srikrishna Bill").

The mandatory requirement for storing a mirror copy of all personal data in India as per Section 40 of the Srikrishna Bill has been done away with in the PDP Bill, 2019, meaning that companies like Facebook and Twitter would be able to store data of Indian users abroad if they so wish.

But the bill prohibits processing of sensitive personal data and critical personal data outside India.

What is more, what constitutes critical data has not been clearly defined.

As per the proposals, social media companies will have to modify their application as they are required to have a system in place by which a user can verify themselves.

So legal experts believe that some system to upload identification documents should be there and something like the Twitter blue tick mark should be there to identify verified accounts.

"The 2019 Bill introduces a new category of data fiduciaries called social media intermediaries ('SMIs'). SMIs are a subcategory of significant data fiduciaries ('SDFs') and will be notified by the Central government after due consultation with the DPA, or the Data Protection Authority. Clause 26(4) of the Bill defines SMIs as intermediaries who primarily or solely enable online interaction between two or more users," SFLC.in said.

"On a plain reading of the definition, online platforms like Facebook, Twitter, YouTube, TikTok, ShareChat and WhatsApp are likely to be notified as SMIs under the Bill," it added.