Blockchain could be the single dashboard that governments in India badly need

Anand Murali October 3, 2017 10 min

Ask anyone who’s tried to buy land in India what the experience is like. Even if the buyer is a lucky one, he or she will only tell you tales of exasperation: of how the seller’s property papers were in order but the documentation file was thicker than the Oxford English Dictionary; of how a legal consultant had approved the purchase but with a few dozen caveats; of how many times signatures, photographs and fingerprints were taken; how he or she had no idea what was happening during the registration process etc.

The story you’re more likely to hear is that finding a piece of land with proper and clear title is almost impossible. Cases wherein the same piece of land has been registered or sold to multiple people are very common, especially in cities with booming real estate markets. Often, the turbidity in titles and documents is created to make for a situation where greasing palms is the easiest way out.

Now, imagine if all land were digitised into tokens and put on a blockchain where each token represents a particular piece of land and the person who owns the land will own the token. (A good primer on blockchain is here in case you are new to the technology.) Being on the blockchain every transaction or change of hand the property went through would have been logged in the blockchain. Being on the blockchain also ensures that the logs cannot be tampered with.

A piece of land being surveyed in India
A piece of land being surveyed in India

There cannot be a duplicate token on the blockchain ensuring that every land has only one title. Also if a token was stolen, i.e a title deed has been stolen, the proper owner of the token can be identified and also verify if the transfer of token was legit. Further, if a property is sold to multiple properties or inherited by siblings, the old token could be updated with new details or a new token issued for the split part of the property.

In effect, Blockchain tokens offer the most tamper-proof and frictionless system to date in any application that requires the use of a ledger.

Futuristic scenario? Not really. Blockchain-based real estate registries may be coming to a place near you sooner than you think possible. A few states in the country – Andhra Pradesh, Telangana, Karnataka, and Rajasthan, to name some – are in the midst of pilot projects to check the feasibility of using technologies like distributed ledger and blockchain to solve real-world problems.

One of the big advantages is that data on blockchains can be made private or public depending on the need and use case. With the data on the blockchain being distributed, there is no central point of failure or vulnerability. Also, to tamper or modify data on a blockchain, the hacker will have to gain access and control a majority of the systems on the network.

There are many advantages to using blockchain and distributed ledger technology in governance, as I learnt at the India Blockchain Week a few days ago in Mumbai, and a few implementations are already on.

A few of us know about Bitcoin and other cryptocurrencies – thanks to their explosion in value and recent crackdowns by regulators and a correction in prices – which are based on distributed ledger technologies. Fewer know of or are imagining big, real-world problems that can be solved with the application of distributed ledgers. Especially in a country as widespread as India with governments – national, state, and local – that even after decades of reforms are massive and touch the lives of 1.3 billion people, who are often among the most unprivileged on earth.

Based on my conversations with experts and blockchain practitioners at the event, I am listing a few use cases in India with impact that potentially could be off the charts:

Digital ID management: Remember submitting your ID proof and then an address proof for starting a bank account, getting a mobile number, applying for a gas connection or an internet connection?

I always keep a bunch of my IDs photocopied because you never know when you will need them, especially when every time some agency says a particular ID is not valid. I also found it strange that I have to resubmit my KYC docs twice for separate accounts in the same bank. A colleague who recently moved cities cannot change the correspondence address on his bank account because the only address proof he has in his new city of residence is his house lease. This is despite his account being eight years old and the bank having his permanent address (in a third city) on record!

I am not even going into the risk of paper IDs, which can be copied and misused in all kinds of ways.

Imagine your personal ID is securely and stored on a central blockchain which can be accessed by various parties once the access request is authorised you.

“Our system allows you to store identity and share it securely as and when required. The ID is stored on the blockchain and only the validity information is shared when a request is made. In cases where the actual ID data is required, we use an IPFS system to store the data and share it in such cases,” Akash Gaurav, CEO of Auxesis Group, a blockchain service company that is working with a couple of state governments in India to implement such a system told FactorDaily. He declined to name the governments his company is working for. IPFS is short for an InterPlanetary File System, which is a peer-to-peer protocol that helps create decentralised file storing and sharing systems.

The company’s blockchain technology called Auxledger forms the basis of its several services. According to Gaurav, the company has already loaded 53 million user IDs onto its blockchain and has successfully completed trials with pools of up to 500 people.

Even though there are some concerns to identity management even on the blockchain, it is better to have some control over identity management by the user than have a completely centrally controlled system.

To be sure, Aadhaar, the Indian citizen ID project, does exactly this but with one crucial difference: the data is centrally stored. This centralised storage of data followed by Unique Identification Authority of India, the agency tasked with the project, has come in for criticism by security experts.

Benefit distribution system: Let’s talk benefits before moving to subsidies. State governments across India, at some point in time or other, have announced benefits like cycles, TVs and laptops to its citizens. But often, these distribution schemes do not reach all the eligible citizens because of various issues.

Think of a system where items like cycles and laptops are tokenized and distributed via a private ledger and distributed to eligible citizens. The departments related to schemes, the vendor and banks can all be on the blockchain. All data is shared on a common ledger that can be accessed by all parties and cannot be modified without a consensus.

A benefit distribution system on a blockchain
A benefit distribution system on a blockchain


Take an example of Bihar which under the previous term of Janata Dal (United) saw thousands of bicycles being given free to girl students. With a blockchain-based distribution, the government – or rather, the education department – would issue a finite number of tokens of appropriate value based on the calculation done by finance departments. These tokens would be distributed to citizens based on eligibility criteria and they, in turn, could give the tokens to vendors in return for a bicycle. The vendor would do so only after authenticating the citizens’ identity and eligibility. Next, the vendor will be able to encash the tokens for the value set by the government’s finance ministry from banks.

Each of the ‘actors’ in this example are on the blockchain and the transaction will not be complete without each of them giving their assent. Each transaction will be available on the open ledger and the details of each record can be verified.

Now, extend this example to subsidies or employment guarantees. Any subsidy or a payment under the Mahatma Gandhi National Rural Employment Guarantee Scheme can be tracked in a similar manner plugging leakages in welfare distribution.

P2P sharing of medical records: Managing of health records is another use case that are being developed for some Indian states.

Every time you visit a hospital for the first time, a new registration and file with your medical consultation and details are created. What if the next time you visit another doctor or hospital, yours records by whoever you give permission to access? This would be possible if doctors and hospitals were connected on a blockchain and were able to share and access data from each other based on request and consent from patients. There could be an access and sharing fee which also could be tracked on the blockchain.

This solution could bring down medical costs and delays in time to treatment.

Greenpower sharing: The steady drop in prices of solar energy over the past decade or so has triggered a demand from electricity users for green energy, especially with the realisation that one of the countries ripe for its wholesale adoption is India.

Imagine you are living in an urban setting where rooftop solar panels generate electricity. What if some houses or offices generate more power than they require and can share it with users in their local community which can be tracked and transacted on a blockchain? A system like this is very apt for India, considering the power deficit situation and the costs of wheeling power over long distances. Systems like this are already being trialled in Australia, Europe and the US. The Brooklyn Microgrid, developed by energy services company LO3 Energy, is an example of peer-to-peer green energy microgram working on the blockchain.

Solar panels installed atop a house in India
Solar panels installed atop a house in India

These are just some examples of projects undertaken by states like Andhra Pradesh, Telangana and Rajasthan to use blockchain to solve problems.

To be sure, it is not that blockchain is the only way to implement these use cases. Several, if not all, can also be implemented based on non-blockchain technologies (GSTN or the Goods and Services Tax Network, for instance). But, being implemented on a blockchain would ensure that records are more secure, difficult to tamper with, and the data is not owned and controlled by a central authority. Plus, the transparency and the ability to verify transactions by all members of the network is unparalleled.

Costs could be a factor, too. Being an emerging space, it is difficult to find talent and current implementation costs for projects on the blockchain might be higher. “Because blockchain expert developers are scarce in the market for now, the implementation cost might be higher. But as the ecosystem matures, the development cost should go down,” says Gaurav, the Auxesis CEO. Still, he adds, the reduction in infrastructure costs, removal of middle men and other savings should justify the higher cost for blockchain solutions.

For a developing country like India, digitization and distributed technologies like blockchain are what states are looking for to record and manage vast amounts of data transactions. At last week’s India Blockchain Week, J A Chowdary, the Special Chief Secretary & IT Advisor to the Chief Minister of Andhra Pradesh, was bullish about how his state wants to adopt blockchain as a solution for its internal needs. He also mentioned how research and development on blockchain-based solutions will play a key role in the fintech city being developed at Vishakhapatnam.

There are several hurdles to be crossed before a new technology can see mass adoption by a state. Primary among the ones in the case of blockchain is the number of middlemen who will be cut off from transactions. Still, I see the pilot projects by state governments as promising. There are enough examples of technology solutions built for India – e.g.: Amul, green revolution, IRCTC, and the open source movement in India, to name a few – succeeding and delivering big returns. Blockchain uniquely tweaked for Indian use cases, could be one with similar potential.


Updated at 2:56pm, October 9, 2017 to add a paragraph on the cost of implementing blockchain solutions.