The Indian government is developing a blockchain-based document repository/ validation framework for startups that will lower the compliance burden and speed up processes, ET reported. Through the decentralized framework, government agencies will be able to access, authenticate or approve documents and data related to startup compliances.
The Department for Promotion of Industry and Internal Trade (DPIIT) is working on the system. It will enable agencies such as the Central Board of Direct Taxes (CBDT), banks and public sector undertakings (PSUs), and others to use the framework and oversee compliances.
Under the framework, each DPIIT-recognized startup will have four identifiers- a certificate number, name of the entity, incorporation number, and blockchain ID. Agencies may use one or a combination of identifiers to access documents/ data of startups including applications.
The government expects the framework to reduce the compliance burden on startups, enable quick data sharing, and expedite decision-making. As of now, startups need to make separate submissions to regulators, intermediaries, and authorities. The exercise requires a lot of time, costs, and often leads to duplication of efforts.
Once the framework is active, all concerned stakeholders can use the blockchain-based repository to access, authenticate, or approve documents. As such, agencies can use this single-window framework to verify documents/ data before providing financial or other assistance to startups.
For example, PSUs can check certificate authenticity, the income tax department can verify details before granting tax exemptions. Similarly, banks can verify submissions before providing financial assistance and government e-marketplaces can onboard startups as vendors by verifying DPIIT issued certificates.
The Indian Blockchain Rush
The government of India is looking for avenues to deploy blockchain-enabled projects. Earlier this year, the Election Commission of India was working with IIT-Madras to develop a blockchain-based e-voting system.
IIT-Madras is also working on a blockchain-based healthcare information system.