Funding for privacy enhancing technologies

Introduction

Funding for Privacy Enhancing Technologies (PETs) refers to the financial support provided by governments, private organisations, research institutions and international agencies for developing technologies that protect personal information while allowing data to be collected, processed and analysed. These technologies are increasingly important in biotechnology, healthcare, genetic research, artificial intelligence, digital banking and scientific collaboration.

Privacy Enhancing Technologies include encryption, anonymisation, pseudonymisation, secure multi-party computation, differential privacy, federated learning and zero-knowledge proofs. They allow organisations to use information while reducing the risk of exposing sensitive personal data.

Funding for PETs is particularly important in biotechnology because genetic information, medical records and biological research databases contain highly sensitive information. Financial support helps researchers develop secure systems, conduct privacy assessments and implement safeguards against unauthorised access and misuse.

Legal framework in India

India's legal framework for privacy protection provides the foundation for funding and developing privacy enhancing technologies.

1. Digital Personal Data Protection Act, 2023

The Digital Personal Data Protection Act, 2023 establishes obligations concerning the processing of digital personal data. It provides a framework for lawful processing, consent, data security and protection of individual rights.

The Act does not establish a dedicated government funding scheme for PETs. However, its emphasis on reasonable security safeguards creates incentives for organisations to invest in technologies that improve data protection.

2. Information Technology Act, 2000

Section 43A historically addressed compensation for failure by a body corporate to maintain reasonable security practices while handling sensitive personal data or information. Its interaction with the DPDP Act must be considered in light of the latter's commencement and the amendments made by the DPDP legislation.

Section 72A addresses punishment for disclosure of personal information in breach of a lawful contract, subject to its statutory requirements. These provisions demonstrate the legal importance of protecting digital information.

3. Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011

These Rules prescribe requirements concerning the handling of sensitive personal data or information by covered body corporates. They address privacy policies, consent, disclosure and reasonable security practices.

4. Constitutional protection of privacy

Article 21 of the Constitution protects the right to life and personal liberty. The Supreme Court has recognised informational privacy as an important part of this right. This constitutional foundation supports the development and use of privacy enhancing technologies in public and private research activities.

Meaning and importance of PET funding

Funding for PETs involves financial assistance for developing, testing, purchasing and implementing technologies that reduce privacy risks. It may be provided through government research grants, university programmes, technology-development funds, private investment or international research partnerships.

For example, a biotechnology institution studying genetic diseases may need to analyse genetic information from thousands of participants. Federated learning can allow participating institutions to train a shared model without transferring all underlying patient records to a central database. Funding may support secure computing infrastructure, specialist researchers and independent security testing.

Important areas requiring financial support include:

Encryption technologies: Protecting genetic, medical and other sensitive information during storage and transmission.

Differential privacy: Reducing the possibility of identifying individuals from statistical research results.

Federated learning: Supporting collaborative research without centralising all personal datasets.

Secure multi-party computation: Allowing multiple institutions to analyse information without directly revealing their private inputs.

Anonymisation and pseudonymisation: Reducing the direct identification of individuals in research datasets.

Privacy auditing: Testing systems for weaknesses and verifying compliance with data-protection requirements.

Sources and mechanisms of funding

Funding for privacy enhancing technologies can come from several sources.

Government research grants: Public research agencies may finance projects involving secure data processing, cybersecurity, digital health and responsible artificial intelligence. In India, programmes administered through institutions such as the Department of Science and Technology and the Ministry of Electronics and Information Technology may support relevant research, subject to their specific eligibility and funding conditions.

Academic and institutional funding: Universities, medical institutions and biotechnology research centres may allocate funds for privacy-preserving research infrastructure, secure databases and data-governance systems.

Private sector investment: Technology companies, pharmaceutical organisations and healthcare providers may invest in PETs to protect commercial information, patient records and research datasets.

International funding: International research collaborations and development organisations may provide grants for cybersecurity, digital health and privacy-protection projects.

Public-private partnerships: Governments and private technology organisations may jointly finance the development of secure data-sharing platforms and privacy-preserving research tools.

Relevant case laws

1. Justice K.S. Puttaswamy v. Union of India (2017)

The Supreme Court recognised privacy as a fundamental right under Article 21 and other constitutional freedoms. The judgment identified informational privacy as an important dimension of individual privacy. It provides a constitutional foundation for developing and financing technologies that protect personal information. Although the case did not directly address PET funding, its principles support investment in secure data-processing systems.

2. Justice K.S. Puttaswamy v. Union of India (Aadhaar-5J.) (2018)

The Supreme Court examined privacy concerns associated with the Aadhaar system, including the collection, storage and use of identity information. The judgment highlighted the importance of safeguards against unauthorised access and misuse of personal data. It is relevant to funding decisions concerning encryption, secure authentication and privacy-preserving identity systems.

3. Shreya Singhal v. Union of India (2015)

The Supreme Court struck down Section 66A of the Information Technology Act, 2000, because it violated freedom of speech and expression. Although the case was not about PETs or funding, it demonstrates the constitutional importance of protecting digital rights while regulating online activities. Technology-development programmes should therefore consider both privacy and other constitutional freedoms.

4. District Registrar and Collector v. Canara Bank (2005)

The Supreme Court recognised the importance of privacy in relation to confidential banking records and examined the limits of state access to private documents. The decision is relevant to financial and technological institutions handling confidential information. It supports the need for secure systems and responsible access controls.

Challenges in PET funding

Funding for PETs faces several practical and regulatory challenges. Advanced privacy technologies can be expensive to develop and maintain. Small research institutions and startups may lack sufficient financial resources to employ cybersecurity experts or purchase secure computing infrastructure.

Another challenge is the shortage of technical expertise. Some privacy technologies require specialised knowledge in cryptography, data science and cybersecurity. Furthermore, anonymisation does not always guarantee complete privacy, particularly when datasets can be combined with other available information.

There is also a need to balance privacy protection with research usefulness. Excessive restrictions on data access may reduce the accuracy of scientific studies, while insufficient safeguards may expose individuals to privacy violations.

To address these challenges, funding programmes should support:

Open-source privacy technologies and independent security research.

Training programmes for researchers and institutional data-protection teams.

Privacy impact assessments before sensitive datasets are processed.

Regular security audits and technological upgrades.

Collaboration between universities, government agencies and private technology companies.

Conclusion

Funding for Privacy Enhancing Technologies is essential for building secure and trustworthy digital infrastructure. In biotechnology and healthcare, these technologies allow researchers to use sensitive information while reducing risks to individual privacy. India's constitutional privacy framework, the Information Technology Act and the Digital Personal Data Protection Act, 2023 provide important legal foundations for such investment. The decisions in Puttaswamy, Aadhaar and Canara Bank reinforce the importance of confidentiality, informational privacy and safeguards against misuse. Although India does not have a single dedicated funding statute for PETs, targeted government grants, institutional investment and public-private partnerships can strengthen privacy-preserving innovation.