The Karnataka Innovation Authority Bill, 2020, which was passed in the Legislative Council on Monday, could end up providing greater scope for companies offering online games with money stakes and e-pharmacies that have been banned across India by the Delhi High Court.
Raising the issue, Leader of the Opposition in the Council S.R. Patil asked, “Why do you want to give legal protection to such companies? Families may be destroyed as the companies will be working for their profit.” He cited the example of Dream 11, a fantasy sports startup, which is termed India’s newest unicorn after raising $60 million from Steadview Capital, despite a recent ban on startups offering online games with money stakes. Mr. Patil, who once held the IT and BT portfolio, said that this could prove counter-productive. “There are enough examples of such cases. If you give legal shelter or protection, it is akin to supporting them. We should encourage startups productive to society.”
Citing another example, he said although e-pharmacies have been banned across India by the Delhi High Court, startups such as Netmeds, Medlife, 1mg and PharmEasy have been successful in raising investments ranging between $100 million and $200 million. “Why should the State do those things? There are several medicines that are prescription drugs and there have to be measures to control it.”
In response, IT and BT Minister C.N. Ashwath Narayan said the measures taken would be temporary. “It is only for trials and testing, for a limited period and at a scheduled place. It is not a permanent fixture,” he said.
The Bill will replace an ordinance promulgated earlier and pave the way for setting up “regulatory sandboxes” where innovators will be allowed a small window of exemption for a prescribed period to carry out innovation. The State gets to observe such innovations and respond with further legislation and amendments.
