INDIA: The Blockchain Revolution - Implications for SAIs


Blockchain technology has so far been closely associated with Bitcoin and cryptocurrencies in the popular discourse. But away from the hype, Blockchain holds immense potential for application in use cases for the public sector in functions which deal with asset management.

Any type of asset registration which is a statutory requirement regulated by a public sector entity- acquisition and disposal of immovable properties, investment and divestment in shares of companies, licenses (for arms, driving, liquor), official documents (police complaints, court cases, passports, births and deaths, marriages and divorces) etc. can potentially be qualitatively transformed with introduction of Blockchain technology.

This is because every change or modification to the digital ledger results in a new block in the chain, creating an immutable public record. This could potentially create deterrence at scale at the lower levels of the public sector bureaucracy, in countries where rent seeking is a significant impediment to high transformative service delivery for citizens.

In India, there is a nascent but flourishing eco-system of Blockchain technology startups. Some of these companies are partnering pioneering and well intentioned leaders in Government Departments, to offer transformative services to citizens-

  1. The Land Registry Department of a major State Government in India[1] is planning to introduce Blockchain technology for its functions related to maintenance of land records, registration of ownership/ leasing of property and registration of sale and purchase. Citizens have been raising concerns for many years about errors in the recording of names and exact details of a property. Human intervention, sometimes with malafide intent, in modification of the land registry has at times enabled land encroachment and use of forged documentation to buy or sell properties. The fact that unlawful changes have been made is often difficult to establish beyond doubt through the Courts and the legal process to establish accountability takes a long time. But Blockchain technology enables maintenance of a transparent and clear trail of every record accessed by an official and changes made into it. Thus, it can create high deterrence against malpractices and also help keep track of when lawful changes were made, and why.
  2. The Police Department of a District in India has introduced[2] a Blockchain based online portal for citizens to register police complaints. Complainants can check the status of their case, find out who the assigned police officer for their case is, and receive notifications about the progress made on acting on the complaint. The portal enables victims of crimes to file complaints against local police officers, without fear of their complaints being dismissed or manipulated by potentially corrupt officers.

Professionals and institutions in the accounting, auditing and legal domains would do well to build capacity and skills to understand the underlying concepts, data structures, software languages and use-cases of Blockchain technology, in order to keep pace with the rapid developments in this space.

The day may not be far off when Auditors would need to read and understand code in order to examine pervasive Blockchain enabled smart contracts!


[1] , 02.10.2022

[2] , 14.10.2022