BLOCKCHAIN-BASED FRAMEWORK TO LOWER COMPLIANCE BURDEN

Govt Readying Info Bank for Startups

System will enable multiple agencies to access,
authenticate or approve documents and data
Kirtika.Suneja@timesgroup.com

New Delhi:

India is readying a blockchain-based validation framework for startups that will lower
the compliance burden and speed up processes, said people with knowledge of the
matter. The Department for Promotion of Industry and Internal Trade (DPIIT) has started
work on a system that will enable multiple agencies such as the Central Board of Direct
Taxes (CBDT), banks and public sector undertakings (PSUs) among others to access,
authenticate or approve documents and data available to all stakeholders on the chain.

This will reduce the need for separate submissions by startups to regulators,
intermediaries and authorities, as individual authenticated documents will be available
on blockchain.

PSUs need to check certificate authenticity while relaxing procurement norms. The
income tax department has to corroborate details while granting exemptions. The
government e-Marketplace (GeM) needs to validate startup certificates for getting them
on board. Banks can verify submissions before providing financial assistance without
startups having to separately submit documents to each of them.

Four Unique Identifiers

The plan is to get all stakeholder departments, agencies and institutions together to build
a secure decentralised repository of key startup information for quick data sharing,
reduce the compliance burden and expedite decision-making.

"The platform can be utilised by government departments, PSUs, banks and investors to
verify the authenticity of the information submitted by startups, for availing support
opportunities and enable quick turnaround in inter-departmental verification process,"
said an official. The platform will be the first step toward introducing emerging
technologies within existing government frameworks to transform traditional processes,
he said.

The DPIIT issues recognition certificates through the Startup India platform. Each is
allotted a unique number that can be used to verify authenticity. The department can
authenticate the startup certificate on the blockchain to make it tamperproof.

"As we go digital, facts and documents need to be in one place for the ease of investors. It
also brings in efficiency in the system — it is a great idea," said Padmaja Ruparel, co-
founder, Indian Angel Network.

The blockchain-based certificate verification platform will

enable instant access and verification in a multi-participant
system. Each startup would have four unique identifiers—
certificate number, name of the entity, incorporation
number and blockchain ID. One or a combination of these
would allow a stakeholder to access details or applications
under this system. It would be possible to see the status of a
startup — if its certificate has expired, is active, cancelled or
doesn’t exist, apart from any modifications made to it.

As of July 14, 52,391 entities were recognised as startups by

the department. India currently has 53 unicorns, with a
tentative valuation of Rs 1.4 lakh crore, the govt recently
told Parliament.

Platform will be the first step toward introducing emerging

tech within existing govt frameworks