According to a study by Inc42, Indian government agencies are considering using blockchain technology to reduce compliance costs on companies.
Using Blockchain to Make Compliance for Startups Easier
Some Indian government organizations are considering moving to distributed ledger technology to make it easier for entrepreneurs to cope with compliance and regulatory barriers (DLT).
The Indian government, in particular, is said to be working on a blockchain-powered validation framework that may assist in streamlining the process of submitting documents to multiple authorities.
Currently, companies in India must submit separate filings to regulators, intermediaries, and authorities, which wastes time and duplicates efforts.
Using the proposed blockchain-based platform, the Central Board of Direct Taxes (CBDT), banks, public sector undertakings (PSUs), non-banking financial companies (NBFCs), and other regulators will be able to quickly verify documents before providing financial or other types of assistance to startups.
The agencies above will use the blockchain architecture to access, authenticate, and approve documents and data about startup compliances.
According to individuals close to the situation, the Department for Promotion of Industry and Internal Trade (DPIIT) is presently working on building the blockchain above the platform.
According to the report, each DPIIT-recognized firm will have four identities: a certificate number, entity name, incorporation number, and blockchain ID. Any official stakeholder can view papers or applications submitted by entrepreneurs using these tools.
According to an unidentified official mentioned in the paper, the framework would allow for a rapid turnaround in inter-departmental verification processes.
“Under the system, different departments and bodies will be empowered to use the documents for their regulatory purposes. For instance, PSUs can check certificate authenticity, while the income tax department or CBDT can verify details before granting tax exemptions. Similarly, the government e-Marketplace (GeM) can validate startup certificates before onboarding them as vendors.”
India’s Consistent Adoption of Blockchain
While India’s crypto rules aren’t the most pro-crypto globally, the country’s economic superpower has been aggressively adopting the technology that underpins digital assets.
To combat certificate fraud, the Indian state of Maharashtra chose the Ethereum blockchain on July 26.