Janifha Evangeline
The Indian government is going to build a blockchain-based validation mechanism for startups, which will lessen the compliance encumbrance and expedite the process. The DPIIT has commenced working on a framework. This will help numerous agencies that include the Central Board of Direct Taxes and PSU, to not only access but also validate and approve both the documents, as well as data available to all the stakeholders.

Blockchain technology has evolved into a promising one such that tech giant IBM is investing USD 200 million in research. Not just that, 90 percent of both European as well US banks are researching blockchain options and this technology can transform a myriad of industries and sectors including the government, insurance, public identity security, and insurance.

55% of Indian businesses have started embracing blockchain technology, as per a report from Research and Markets. And, NASSCOM also reported that the country’s public sector is initiating 40+ blockchain initiatives. Furthermore, the Indian startup ecosystem has also observed the increase of numerous blockchain startups, and a number of them are becoming popular in the international markets.

The blockchain technology market is anticipated to reach USD 7.59 billion by 2024, registering a CAGR of 82.4% until 2028, as per a recent report by Grand View Research. Blockchain technology decentralization along with cryptographic hashing has made blockchain an admissible disruptor for sectors such as cybersecurity, healthcare, and payments. Over the past few years, the Indian blockchain industry has observed increased development. One of the major reasons being the numerous initiatives taken by the Indian government and corporates as well.

Challenges

Some of the challenges faced in Blockchain technologies include lack of adoption, skill gap, trust among users, and Blockchain interoperability.

Blockchain-based Information bank

The blockchain-based evaluation framework that is said to be developed by the Indian government for startups will be the 1st step in introducing emerging/advanced technologies within existing frameworks.

This system will facilitate in cutting down the requirement for individual/separate submissions
by startups to authorities, regulators and intermediaries. This is because individual verified documents can be accessed on the blockchain.

“The platform can be utilized by government departments, PSUs, banks, and investors o verify the authenticity of the information submitted by startups, for availing support opportunities and enable quick turnaround in the inter-departmental verification process," an official told the Economic Times.

The platform will be the first initiative to introducing emerging technologies within the present/existing government mechanisms and to refurbish conventional processes, the official added.

The main aim and focus are to bring together all stakeholders that include agencies, institutions, and stakeholder departments in order to build/develop a decentralized repository of vital startup information. This is mainly aimed at faster data sharing, reducing the compliance burden, and quickening decision-making.

The DPIIT certifications render a myriad of benefits such as becoming eligible to get income tax and Angel tax exemptions, access to Rs 10000 crore of funds, relaxation in public procurement norms, faster exit for startups to close operations.

Around 52391 firms were recognized as startups by the DPIIT, while the country currently consists of over 53 unicorns with a tentative valuation of Rs 1.4 lakh crore, as stated by the Center to the parliament.

Benefits of Block-chain based certificate verification platform

• Enabling instant access to multiple participants of the market.

• Since the certificate comprises 4 unique Identifiers such as its number, entity’s name, incorporation number, and blockchain ID, this ID will be unique to every business and is secure from hacking and various other technical theft.

• Furthermore, this initiative is anticipated to benefit the start-ups since they can start focusing more on core businesses, as earlier they were focusing on being tied up in compliances.

• Another major advantage is that all the stakeholders involved will have access to the information of the startup and this will lead to huge growth opportunities for businesses.

Supporting Indian startups in blockchain space

NEAR, has launched its 1st India-focused NEAR India Accelerator program with an aim to buttress Indian startups that are either innovating or looking forward to building applications in the blockchain landscape. NEAR is an open-source platform for decentralized applications. The accelerator will find out and back impactful products. Products, which would solve real-world problems, at the same time it will strengthen the Indian blockchain ecosystem.

A DLT-focused multi-asset investment fund- Woodstock Fund has joined the accelerator as an investment partner. Fracton Ventures has joined the accelerator as a go-to-market access partner.

While NEAR is built on NEAR protocol – it is a decentralized development that is a public, shared, developer-friendly blockchain and is found to be a highly scalable, and cost-effective platform for developers to develop decentralized applications on it.

Most of the blockchain startups in India are cryptocurrency exchanges, while the other blockchain startups are leveraging the blockchain technology for governance applications that include storing land and education records or also conducting elections in a corporate setup.

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