Riding the Road to Progress with Blockchain

While countries across the world are quickly adopting blockchain technology, India must keep pace while ensuring that the technology benefits the vast majority of its population.
Keywords: Blockchain, Technology, Cryptographic, Information, Policy, Bitcoin, Digitalisation, Employment
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Do you love your morning tea? Have you ever been disappointed that your trusted tea powder sometimes fails to meet the usual quality? Don’t worry, blockchain technology is going to solve your problem soon. Does that sound crazy? Read on.

We have all been hearing the term blockchain technology and almost automatically another which we recall immediately is Bitcoin. While Blockchain is the technology powering Bitcoin, this is just one among the millions of uses it has the potential to fulfill. Blockchain technology is essentially a system of recording information. It is a suite of distributed ledger technologies that can be programmed and tracked.

What makes blockchain technology so transformative?

The most basic aspect is trust. In a time when individuals and governments are struggling with data security issues and data tampering, blockchain presents a unique trust-worthy way forward.

It is impossible to change or tamper with blockchain data. Blockchain stores information in a series of blocks. To create a block, a cryptographic puzzle needs to be solved, which then needs to be verified by a network. Once this block is verified and added to the ledger it can never be deleted. Any change in information or data is recorded as an alteration of previous data and the changes can be seen by all.

With this system, there are the added advantages of:

• Provenance: one can trace any change in data and ensure accountability.

• Consensus and super security.

• Decentralized system: there is combined ownership of the chain by the network.

Coming back to our question of tea, adulteration of tea often leads to the mixing of good and bad quality tea leaves. The Tea Board of India aims to solve this problem through the digitalisation of data with blockchain at its centre. It will record all the details pertaining to procurement, manufacturing and delivery of the end product. Thus, you and the Tea Board can track the origin of tea back to the plantation and record any cases of adulteration. Now how is this possible? Smart Contracts can make this possible.

Smart Contracts:

The key ingredient to making blockchain successful in creating all this magic is smart contracts. Smart contracts are blockchain-based, self-executing contracts that are triggered by the happening of certain predetermined events.

They are usually used to automate the implementation of the agreement so that all participants can determine the result immediately, without the involvement of an intermediary and without wasting time. Thus an event B occurs automatically but only when event A occurs. This holds the potential to bring speed, efficiency, and accuracy in sectors like finance, the judiciary etc.

Smart contracts are a key element of many applications and platforms created using blockchain or distributed ledger technology.

Block chain’s Potential in India:

While Blockchain technology has been creating ripples in the financial world and has been embraced by our Finance minister in the new 2022 budget announced recently on 1st Feb 2022, excitement is growing because of its potential to transform governance and aid in providing solutions to India’s developmental goals. As per the 2019 NASSCOM Blockchain Report, as many as 50 percent of the states are involved in blockchain technology’s adoption in varying degrees.

Niti Aayog’s policy paper in 2020 on Blockchain: The Indian strategy highlights how blockchain has the potential to enable ‘Ease of Living, Ease of Doing Business and Governance’. But the question in India is – Can blockchain help rural India? Is this a technology that suits just urban metro India? To what extent can blockchain technology be useful to alleviate the problems of the poor and marginalised people in the country?

 A Case for Blockchain technology in Bihar

The question on the potential of blockchain technology in India would be ‘Can it create an impact on rural India and in a cost-effective manner?’ We look at the possibilities with the state of Bihar as focus.

Bihar is one of the states in India in which the development challenges have been huge and continue to daunt both the central and the local governments. Today Bihar is at a point where the focus and discussion are more about development and jobs. The present government has come to power on the basis of the promise that it would create 1.9 million jobs for the youth. This would be an ideal time for Bihar to focus on blockchain technology. While the government is setting up IT parks across the state, skill development courses on the blockchain should be an important focus area right now.

Agriculture and allied sectors form the major source of employment for the labour force (48%) according to the state’s Economic Survey report. However, agriculture in Bihar continues to be a low-profit operation where the farmers produce mostly for their subsistence. This is because Bihar has one of the smallest per capita land  (average landholding size in rural areas is 0.242 hectares). Further, most of the farmers take loans from non-institutional lenders. Blockchain can serve the government’s efforts to improve profitability to farmers and ensure they have easy access to credit. For instance, Blockchain can be used to standardize land records and provide easy commodities loans to farmers by linking them to warehouses. An Uber for Tractors, based on blockchain technology and using blockchain to map out the entire journey of food production will ensure that more agri-tech companies will invest in Bihar.

Another area where Bihar has woes is Energy. It has the lowest per capita consumption (332Kwh) of electricity, which indicates a serious shortage of power. One of the major requirements is clean energy-based decentralized power distribution which is economical. High rates for power is not an option in the state. A blockchain-based microgrid network system for power distribution can be developed. It will enable surpluses or shortages to be automatically traded between the DISCOM and microgrid operators, creating an energy trading platform. If based on solar power, the microgrids can be designed so that the rural people themselves benefit from the extra power generated. For example, Tata Power Microgrids Pvt Ltd has been installing many MicroGrids in rural areas across the nation. If they are connected as one single grid and the power generated is traded on a blockchain network then the surplus power generated can be used where there are shortages. If tested it can be a great model for the One Nation One Grid initiative.

Public Services in Bihar is another area that we can look at as a point of entry for blockchain. Blockchain technology shows tremendous potential for governments to deliver citizen services more effectively, thus increasing trust and goodwill, as well as providing savings. This is because every entry in blockchain can be tracked continuously and can never be deleted, ensuring constant accountability. Smart contracts if adopted in the state government can ensure faster service delivery. It can ultimately be linked with public service delivery programmes like Jaankari in Bihar to add the element of accountability.

Streamlining Healthcare: Universal Health Coverage (UHC) for its 13 crores (130 million) population is an ambitious but vital goal for the state of Bihar. An area where blockchain can be useful is the delivery of health care through quick access to verified medical records and thus insurance for people. Clinical tests and reports get automatically stored in the patient’s name and they can be shared without fear of data corruption or mismanagement. It can also provide easier access to insurance and avoid issues of fraudulent claims. Blockchain can also be developed to detect counterfeit drugs and ensure standards are maintained in the manufacturing of drugs.

Decluttering the Judiciary: Pendency of cases is a huge issue for the Indian judiciary. The Supreme Court recently pulled up the Bihar government for choking the judiciary due to the high number of appeals on bail pleas in liquor prohibition cases. To avoid such cluttering of courts, we can use blockchain technology to save time and costs.

With the use of smart contracts, one can simply automate the set of terms and conditions of contracts like lease agreements, standard memorandum of understandings, rental agreements, and others. This will simplify the process and ensure data is secure. Even disputes around Intellectual Property Rights (IPR) can be reduced by creating blockchain-based trademark and copyright filings thus ensuring data cannot be tampered with.

Reduce Voter Fraud: With every election, EVMs come under the scanner because of alleged tampering and voter fraud. Blockchain-based e-voting solutions can bring an end to this. Recently, the Election Commission during Bihar’s panchayat elections used artificial intelligence and blockchain technology to count votes and avoid voter fraud.

Can Bihar bear the cost of setting up blockchain technology? A possibility is introducing a 0.5% cess (IT upgradation cess) on the people of Bihar to generate the funds needed. If there can be a law to completely ban alcohol and the revenue the state earns from it, surely the government can pass some law to earn revenue for this purpose.

India can tap the technology to improve governance and solve many of its critical developmental challenges. However, there are some key problems that need to be addressed:

• Technology adoption in all areas of governance will be essential and require much infrastructure costs. It will take time, human resources, resources, a proper strategy and should be planned as a long term implementation project with periodic progress reports.

• Ensuring Regulatory compliance while using the technology and putting in place necessary guidelines.

• Lack of sufficient manpower for technology.

While the obstacles are many, they can be overcome through visionary planning and constant discussion. The National Strategy on Blockchain developed by the Government of India is a major step in the right direction. It comes up with various actions for the next 5 years such as bringing up a national blockchain framework, focusing on R&D, human resource development etc.

The next step would be bringing clarity on the future of cryptocurrency in India*, which is inextricably tied to the growth of blockchain. While countries across the world are quickly adopting blockchain technology, India must keep pace while ensuring that the technology benefits the vast majority of its population, particularly the poorest citizens and helps meet our developmental goals.

*The India crypto bill is under process and being drafted by the Union government.

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Sammridh Varma

Mr Sammridh Varma is an alumnus of UCLA - University of California Los Angeles and CISL - Cambridge institute of Sustainable leadership. He is a communications professional currently associated with Bihar Young Thinkers Forum.

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