This blog is part of a series on blockchain technology, governance and its implications for e-Governance in India. 

While presenting the Union Budget this year, Finance Minister Arun Jaitley made an important if not surprising mention on the government’s inclination to explore the potential of blockchain technology. The announcement in the Parliament, India’s highest policymaking echelon, is only one example in a string of high profile moves on blockchain. Various Indian states have begun integrating the technology in governance operations already.

Andhra Pradesh has emerged as a frontrunner in this respect. The government has invested considerable efforts in blockchain governance mechanisms in at least two key departments- management of land records and vehicle registrations. A first of its kind decision, the port city of Vishakapatnam is also being developed into a FinTech hub with blockchain at its core.

Much like Andhra Pradesh’s initiatives to understand the use cases in various government departments, Karnataka recently organised a hackathon on blockchain inviting practitioners and academics to deliberate real-life governance scenarios, and has announced a white paper too. Maharashtra and Telangana are among other states who are embracing the technology. A pilot project is planned on tamper proof land transaction data in Maharashtra while Telangana is using blockchain to eliminate fraudulent data in land records. The private sector’s role in innovating on each of these is of note.

While talks of blockchain revolutionising antiquated governance practices has swept policy circles; the technology is thought to offer some very concrete advantages. The experience of countries which have been successful at creating blockchain-enabled societies, such as Estonia, provide some insight into the change blockchain can usher. From secure voting to a more efficient judicial system, the technology has opened up new avenues for good governance for the country. Blockchain has facilitated ease of use, given people power over their information (which is not the case in India as it proposes centralised mechanisms for data access), and most importantly offered much-needed transparency in fundamental governance practices.

Thus, by minimising human intervention, the adoption of the technology is seen to be a step towards enabling service delivery that is truly accountable to the people.

Yet given blockchain’s potential as a disruptive technology as observed by Prime Minister Narendra Modi among others, one cannot help but wonder how India’s behemoth and complex bureaucratic system adapts to this change. If history is to serve as an example, e-Governance initiatives in Karnataka in the 1980s introduced new technologies (namely digitsation of records and regularisation of computer usage in day-to-day activities) but various issues of implementation emerged quickly. In a previous blog, we spoke of how early resource managers critical to implementation moved on while systems remained weak. Uptake for even simple e-Governance processes such as using spreadsheets for calculations prove markedly slow.

There are thus three critical questions to be considered now.

Is there a danger that blockchain technology is being overemphasised for good governance in India when allied implementation issues remain unresolved? Secondly, is adequate foresight being given to ramifications of this technology on a system-wide scale, and to what extent will the private sector play a role? Lastly, how will the changes play out for grassroots administrators and service delivery by them?