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.
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 government recently told Parliament.