The government has prepared a draft of the Data Protection Act, which would help protect data and confidentiality of businesses in the country, a top official of the information technology department said on Thursday.

"We are ready with a draft of the Data Protection Act, which would help in building confidentiality of customers to outsource BPO work to third party vendors," Union IT and communication secretary Rajeeva Ratna Shah said in Bangalore at the inaugural of the Nasscom ITES-BPO Strategy Summit 2003.

He said though National Association of Software and Service Companies has initiated the move, no response has come from the industry body and the IT industry for the Act.

"The growth rate in captive BPO centres is 70 to 80 per cent, while the third party vendors are growing at 50 per cent or less. This is because of lack of confidence among customers on third party vendors," Shah said.

He assured that a suitable data protection law would help build confidence among the customers to outsource work from India.

Stating that the government had taken up a number of initiatives to ensure cyber, information and network security, Shah said a "cyber security assurance framework" was being set up for information security.