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Start-up India blockchain-based information bank being developed

Start-up India blockchain-based information bank being developed

On 6th October 2020, at the virtual National Startup Award 2020 program, Startup India had announced a discovery platform called ‘Startup India Showcase’ for recognizing most promising start-ups in the country, along with the launch of the blockchain-based certification verification system, which will enable instant verification and access to certificates of recognition issued by the industry body.

Indian government is set to build a blockchain-based evaluation framework for start-ups that will lower the compliance burden and speed up the processes of registration and consuming the subsequent benefits of the same.

DPIIT (Department of Promotion of Industry & Internal Trade) has started its work on a system that will enable multiple agencies to access, authenticate and approve documents and data available to all stakeholders of a start-up under a common chain. This will reduce the need for separate submissions by start-ups to regulators, intermediaries and authorities, as these submissions can be easily authenticated on the blockchain.

DPIIT certifications provide the following benefits to the start-ups:

  1. Tax Exemption: Become eligible to avail Income Tax and Angel Tax exemptions.
  2. Funding: Access to Rs. 10,000 Crore Fund of Funds.
  3. Public Procurement: Relaxation in public procurement norms.
  4. Intellectual Property Rights: Fast-tracked process and rebate on application.
  5. Self-Certification: Under Labor and Environmental Laws.
  6. Faster Exit: Faster Exit for Start-ups to wind up operations.

For example, PSUs need to check the certificate of authenticity while relaxing procurement terms. The income tax department has to corroborate details while granting exemptions. The government e-Market place (GeM) needs to validate start-up certificate for getting them on board. Banks can verify submissions before providing financial assistance without start-ups having to separately submit documents to each of them.

This platform will be the first step by the government towards introducing emerging technology within existing frameworks. The plan is to get all departments, agencies and institutions together to build a secure decentralized repository of key start-up information for quick data sharing.

The platform can be utilized by government departments, PSUs, banks and investors to verify the authenticity of the information submitted by start-ups for availing support opportunities and enable quick turnaround in inter-departmental verification process.

As of July 14th, 52,391 entities were recognized as startups by DPIIT. India currently has 53 unicorns, with a tentative valuation of Rs. 1.4 lakh crores. The DPIIT issues recognition certifies through the Startup India platform. Each is allocated a unique number that can be used to verify authenticity. The departments can authenticate the start-up certificate on the blockchain to make it tamperproof.

As we are going digital, the facts and documents need to be in one place for the ease of investors. It also brings efficiency in the system said one of the Angel Start-ups of India.

“Disruptive technologies such as Blockchain and Internet of Things will have a profound impact in the way we live and work. They will require rapid adaptation in our work places,” quoted Shri Narendra Modi, our Prime Minister.

The blockchain-based certificate verification platform will enable instant-access to multiple participants of the market. The certificate has four unique identifiers – its number, name of the entity, incorporation number and now added feature would be the blockchain ID. The blockchain ID is a string of random letters and numbers that acts as a username. This ID is unique to your business and is secure in terms of hacking and other technical theft.

This initiative is going to highly benefit the start-ups as they can now focus more on their core business rather than getting tied up in compliances. Another added advantage is the scope of the business can now become wider as all of the stakeholders will be able to access the start-up information, including potential investors and fund managers. This provides immense growth opportunities for the business. All these initiatives starting from Digital India to Make in India and now Startup India with emerging blockchain technology is creating a global stage for India start-ups and businesses.

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