In recent times, blockchain technology has emerged as a potentially transformative factor which is reshaping multiple aspects of government operations. Despite the fact that this technology is still in a nascent stage of its development and adoption as it continues to evolve, the government’s think tank Niti Aayog in its recent ‘Blockchain: The Indian Strategy’ report said that it is essential for policymakers to understand and incorporate this technology in their operations.
With this report, Niti Aayog CEO Amitabh Kant hopes that it will help to start a dialogue on blockchain and help various government instrumentalities to explore how this technology is effectively leveraged for the betterment of society.
In the report, Niti Aayog urged the government institutions to integrate decentralised networks supporting peer-to-peer transactions to create more socio-economic value.
Government entities involved for ledger maintenance or collecting state can use blockchain in their day to day proceedings, the report added. “For instance, blockchain-based distributed ledger technology (DLT) can help in maintaining land and property transactions which are essentially peer-to-peer transactions. With the development of DLT, it may not be necessary for the government to maintain records anymore,” the report said.
With this report, Niti Aayog also highlighted that while selecting a particular blockchain-based technology, the government should first understand the technical, legal, and regulatory prerequisites before incorporating in its operations. “It is also incumbent upon stakeholders to understand in which cases the technology adds value and in which cases it does not,” the report added.
Use Cases Of Blockchain In Government Operations
As of now, Niti Aayog is looking at four-use cases of blockchain technology in aspects such as tracking and tracing of drugs in the pharmaceutical supply chain, claim verification and approval in the disbursement of fertilizer subsidy, verification of university certificates, and transfer of land records.
NITI Aayog has been developing proof of concepts (PoCs) in these four areas to deliver improved efficiency and better understand possible hurdles in implementation.
For using blockchain in agriculture, Niti Aayog said that this technology has the potential to transform the sector by creating an audit trail of all farmer produce and removing the mistrust between farmers and intermediaries.
Problems With Blockchain
Highlighting one of the problems faced in the implementation of the blockchain technology, Niti Aayog said that for the fertilizer subsidy pilot, the challenge that it faced was reducing the turnaround time for reimbursement of subsidies payments and freight claims.
Other problems which Niti Aayog faced in this pilot project were inefficiencies in record management, limited visibility for inventory stocks, and trusting credibility of the generating data. “There clearly was a valid problem, deeply embedded in business rationale,” Niti Aayog added.
Other challenges which Niti Aayog highlighted in its report are the initial cost of implementation, human resource constraints, nascent developer community, and sustainability of transactions.