From Healthtech To Law Enforcement: How India Plans To Use Blockchain

The Firozabad Police recently announced its partnership with blockchain startup Polygon to launch Firozabad Public Grievance Management System, which would allow citizens to register their complaints and store them on the blockchain, ensuring that they are not tampered with.

The move aims to ensure that the details filed by a complainant in a report are not altered, edited, or lost and there is consistency in details around an investigation. According to Ashish Tiwari, IPS, SSP Firozabad, the blockchain system would curb corruption within the police department and bring more transparency to the justice system.

The Firozabad Police explained how the system would work in a blog post. Any person can register the complaint online by scanning a QR code placed at police help desks across the city.

Once a complaint is registered, the system will generate a token number for the information that is stored on the blockchain. The token can be referred to for further inquiries on the status of the report.

In a tweet, Polygon cofounder Sandeep Nailwal also said that the project would ensure the right to justice for each citizen. 

While law enforcement is the latest to join the list of public domain applications, the Indian government has plans to use blockchain for a variety of sectors.

The National Strategy On Blockchain

Amid crypto’s first boom in 2017, the Indian government asked NITI Aayog to come up with a grand plan for blockchain implementation in egovernance. Former Finance Minister Arun Jaitley in his Budget speech had said, “The government will explore the use of blockchain technology proactively for ushering in the digital economy.”

NITI Aayog later came up with the ‘IndiaChain’ project, the largest blockchain project on egovernance that was supposed to cut down fraud, accelerate contract execution, improve transaction transparency, and promote the agriculture economy in the country.

However, beyond a white paper, it never really kicked off on the ground.

In December 2021, the Ministry of Electronics and IT (MeitY) published the National Strategy on Blockchain, a 52-page document on the government’s plan to adopt blockchain in several industries such as e-governance, healthtech, agritech, fintech, edtech, and more.

The MeitY also introduced a five-year plan to implement blockchain across several industries under the National Blockchain Framework (NBF). 

Under the NBF, the ministry has underlined the key requirements that need to be met before blockchain technology can be used to its full potential. These include a national-level infrastructure for blockchain, blockchain-as-a-service, geographically distributed nodes, creating awareness, and developing human resources, among others.

Within five years of implementing the strategy, the government expects to enable ‘Made in India’ blockchain technology for global use, and convergence across blockchain, IoT, cloud, and AI, also called the BICA stack. It intends to enable national-level use cases harnessing the potential of the BICA stack.

Along the way, the government plans to build the National Blockchain Portal and geographically distributed blockchain infrastructure, onboard MSMEs and startups, develop cross-border applications, standardise India Stack for blockchain adoption and integrate blockchain technology with most national services.

The National Blockchain Framework: Explained

The NBF would operate across seven layers, starting with the National Blockchain Distributed Infrastructure, consisting of regional nodes. The government would divide the nation into four regions – north, south, east and west – to distribute the blockchain infrastructure.

The second layer would be the Chain Layer, housing individual blockchains for services such as property, health, smart city, education, and insurance, among others.

The third layer would include blockchain platforms such as Hyperledger, Corda, and others to help develop and operate the blockchains in the Chain Layer. The government has earmarked Hyperledger Sawtooth and Hyperledger Fabric as two of the blockchain services it would be using.

Next, the framework would contain a smart contracts layer, which would include the design patterns for smart contracts and domain-specific smart contracts. The second layer from the top would be the asset layer, which would include all services related to assets, including asset-user linking, asset creation, ownership transfer and asset tracking.

Lastly, the top layer would be the cross-application access layer, which would form the core of the National Blockchain Distributed Infrastructure API. All of these layers would form the security vertical, which would help in identification, authentication, authorisation and role-based access.

The national applications, including finance, e-governance, health, smart cities and insurance, with value-added services such as proof-of-storage, proof-of-existence and predictive visual analysis and intelligence, would sit on top of the security vertical. 

The government plans to integrate the national services layer with existing identity and authentication services such as eSign, ePramaan, Aadhaar and DigiLocker.

The framework also envisions startups developing use cases for the NBF and blockchain technology for India. According to Inc42 data, blockchain and Web3 startups in India have raised $1.475 Bn between 2014 and Q3 2022.

India-Specific Use Cases

According to a joint report by Deloitte and the Federation of Indian Chambers of Commerce & Industry (FICCI), there are multiple use cases for the blockchain in the public domain. Some of these use cases include health records, digital certificates, land registeries, voting, smart contracts, and academic certificates.

The report said that India could currently deploy blockchain technology for land registration, issuing digital certificates, and customs duty payment. All of these applications could employ blockchain technology for better identification and authorisation of the owner of the asset.

Further, the Reserve Bank of India (RBI) is also working on a central bank digital currency (CBDC).

Land Registry: The Deloitte and FICCI report said that the government could develop a non-corruptible land record with the technology, which would be safe from any tampering from outside. 

Currently, the land registration process is paper-intensive and manual. With blockchain, the dependence on paper could be driven to zero and the time taken to register land could also be decreased. Further, recording property rights via blockchain would enable annual cost savings for title insurers through a tamper-proof ledger.

The report also said that there is a lot of crime and dispute associated with land rights in the country, which can be solved with blockchain-based traceability. 

Digital Certificates: People use digital certificates all the time while interacting with ecommerce portals, websites, and so on. Currently, these certificates are issued by certifying authorities (for instance, UIDAI for Aadhaar), and can either be used via a device or Aadhaar.

However, the issuance of these digital certificates consumes time and money. Besides, the process to generate digital certificates is cumbersome. As per the Deloitte-FICCI report, blockchain can solve these issues by including the government, the issuers, and the customers as nodes on a single public blockchain.

The hash of the certificate along with details of the citizen could be immutably stored as a blockchain transaction, rather than storing the actual certificate. The output of the transaction could be assigned to the corresponding citizen, who could then prove ownership of the certificate whenever required.

Customs Duty Payment: With blockchain, all the stakeholders in a customs duty transaction – the importer, the exporter, the customs department, the clearing house agent and the bank – can be tracked in real-time, resulting in better cash cycle management.

Digital Rupee: The RBI introduced the idea of the digital rupee in early 2022 as India’s answer to CBDC. Last week, the central bank released a concept note on CBDC, adding that it would soon commence piloting the digital rupee in the country.

While wholesale businesses are expected to get access first, the digital rupee is expected to be deployed across the country to further reduce dependence on cash.

From reducing costs associated with physical cash management to building resilience, efficiency and innovations in payments systems, the RBI has cited several reasons for introducing CBDC in India. It would also provide the public with uses that any private virtual currencies can provide, without the associated risks.