Blockchain-based validation mechanism in the works to ease compliance for startups
- IBJ Bureau
- Jul 31, 2021
The Centre is preparing a blockchain-based validation mechanism for startups that will lessen compliance encumbrance and expedite processes.
The Department for Promotion of Industry and Internal Trade (DPIIT) has begun working on a framework that will facilitate many agencies, such as the Central Board of Direct Taxes (CBDT) and Public Sector Undertakings (PSUs) among others, to access, validate or approve documents and data available to all stakeholders on the chain.
The system will help curtail the need for separate submissions by startups to authorities, regulators and intermediaries since individually-verified documents will be accessible on blockchain.
“The platform can be utilised by government departments, PSUs, banks and investors to verify the authenticity of the information submitted by startups for availing (themselves of) support opportunities and enable quick turnaround in the inter-departmental verification process,” an official has said.
The platform will be the initial move towards introducing budding technologies within existing government mechanisms to revamp traditional processes, the official has added.
The plan is to bring all agencies, institutions and stakeholder departments together to create a decentralised repository of vital startup information for swift data sharing, lessen the compliance burden and quicken decision-making.
The recognition certificates are issued by the DPIIT through the Startup India platform. Each startup is dispensed a unique number that can be used to confirm authenticity. The department can verify the startup certificate on the blockchain to make it foolproof.
As of July 14, a total of 52,391 firms were recognised as startups by the DPIIT. India currently has 53 unicorns, with tentative valuation of Rs 1.4 lakh crore.