For digitized governance, blockchain where it matters

How digitized are we as a society? It depends on your access to amenities. Banking, trains, public transport, movies, food and bill payments are all available when electronic information flows over a network. However, the largest service provider in the country, the government, is the least automated in the last mile.

How does a giant monopoly, a service provider, serving 1.5 billion people, maintain the quality and integrity of its wide range of services for the population – from the poorest to the top of the pyramid? It is only possible through transaction automation, tracking and traceability, and the resulting transparency.

Infrastructure is a common good. A road is a public good that carries private cars—owned and operated with the consent of the owners, but with rules laid down for public order. Similarly, an information superhighway is a public good that allows you to use your personal data – Aadhaar, PAN, license, educational certificates – to control your various identities.

Read | Digitization a game changer for Indian economy, says IMF chief economist

The authorities are largely the issuer and manager of all identities; however, residents and all participating entities (people, companies, stores, etc.) own their respective identities. Individuals using their digitized identity can engage in private transactions with each other or with the government (which is also a private transaction), and explicitly agree to share information as needed. This mobility of digital data is called “digitization”.

Discussions around blockchain need a deeper definitional understanding of the translation from a social architecture to its digitized realization. The recent tapering of exuberance for a “self-regulating autonomous currency” may now turn attention back to more ambitious and reasoned pursuits. Legitimacy and consensus, however technologically possible, flow from society. Blockchain ideologues of various hues have been vague and utopian, blurring the lines between the various roles that legitimize a digitized backbone for a networked society.

The blockchain is a ledger maintenance technology that keeps track of every change to your digital data and makes it individually calculated, always verified, non-manipulable and sharable. Because such a ledger is verified, it does not require a third party to authenticate the data presented each time you present your digital data in an application.

Governance protocols are required to mandate the rules and roles of any public good. The authorizing and facilitating environment in a political framework requires legitimacy and allows participants to use the law.

Simple management

Imagine the convenience. Each transaction with the Government – ​​whether the Government offers you a scheme or your request to the Government for a service – is based on the convenience of your location, time and willingness or need to participate in the transaction. The information you send may be from a mobile device that contains a wallet with necessary information that you own. The government can track each service request and response, and also track internal processes in response to your request.

Decision makers and the bureaucrats who implement them need an infrastructure that provides transparency to the last mile of service delivery. In a country with a large population on the move and low management automation, the ability to respond is limited not by intent, but by an infrastructure that cannot respond by targeting the specificity of the requirement.

The government is also the first to respond in an emergency; being able to triangulate (request type, location, identity) an emergency request, either from an individual or a group of people in an area, is now possible, by physically locating the request to place and person.

Blockchain as PDI

Blockchain is a ledger that stores a unique identifier corresponding to each digital identity. Each type of identity – Aadhaar, PAN, degree certificate etc – will have a unique identifier on the blockchain. This unique identifier enables applications to verify the identity of the identity data presented without necessarily storing the data itself.

The magic of cryptography powers the blockchain. You don’t need to know the mechanics of a gearbox to drive a car, and similarly you don’t need to understand the intricacies of technology to use it.

The state’s role as guardian of statutory registers is important. It sets the legal and political framework. The digitization of Aadhaar – the digital basic identity; Jan Dhan Yojana – bank accounts as social infrastructure; and UPI as the generic automated processing layer for banking transactions—set the stage for India’s success in population-scale governance automation.

Beyond governance, in a market society, the market plays an essential role in fulfilling social needs. As the pandemic has starkly illustrated, being outside of a digitized environment essentially isolates your ability to engage in market transactions. While the private marketplace serves this arena, it is non-inclusive and focused on preferred categories, and access is conditional, as private marketplaces will be. To address this gap in providing an inclusive marketplace, whether in logistics, buyer-seller interactions or more broadly supply chain management, any social platform will need to automate authentication of underlying regulatory registries.

A public digital infrastructure (PDI) on blockchain is built on the digitized data records that are shared publicly on it without violating privacy or private use. Applications built on this infrastructure will enable easy management, making it transparent and responsive. This will also unlock the potential of the tech startup ecosystem to create new governance and social ecosystem applications for the world from India.

As India’s presidency of the G20 begins, we are leading the world in large-scale societal automation; Our ambition should now be extended to comprehensive digitization of governance in the last mile to earn a billion.

(The author is Executive Director, VREV Foundation, and an MPA from the Lee Kuan Yew School of Public Policy, NUS, Singapore.)