Why greater blockchain adoption is crucial for economic growth
Blockchain technology is no longer the preserve of techies. It will be a catalyst to boost economic growth through its fascinating applications in various industries.
By Brand Connect
Blockchain adoption is rapidly increasing in various sectors in India and the world at large. India is expected to become a $5 trillion economy by 2024-2025 and blockchain has the potential to play a vital role in its growth. It is estimated that government-related blockchain projects could add $5.1 billion to India’s GDP in 2032. Blockchain offers business efficiency when deployed in day-to-day business processes, as the nature of the technology is such that it removes intermediaries and creates a decentralized database accessible by relevant stakeholders for decision-making.
Large corporations are exploring the adoption of blockchain in India in their daily processes and many start-ups are experimenting with the technology to provide different use cases, especially in banking, insurance and financial services. The Indian government is also actively adopting and channeling resources to leverage the technology for use cases in agricultural insurance, education, land title registry and electronic health management, etc.
The increased adoption of blockchain will help accelerate digitalization in India. Over the past few years, the government has successfully created the foundations of a digital infrastructure for recording and sharing data through applications such as Aadhar, UPI, Digilocker and e-Sign, as well as tax governance networks digital devices such as GSTN. With groundwork already well established for data collection, scaling up efforts to merge blockchain with these applications will aid in the digitization process.
Governance in India faces several challenges as we are the largest democracy in the world and the second most populous country in the world. Given the diversity and complexity of managing distribution utilities (PDS), blockchain offers unique benefits and opportunities to help improve governance. Blockchain provides a way to track and manage goods sent to recipients as every step of the supply chain can be tracked on the blockchain. The information is readily available to be tracked in real time on the blockchain and ensures that there are no leaks within the PDS and that the end recipient receives the goods and services as assigned. Increased blockchain adoption will directly bring benefits to the economy through better contract and procurement management, better quality control, and reduced leakage and waste in supply chains.
Further blockchain adoption will support SMEs and allow the private sector to conduct business more efficiently. With the deployment of the blockchain, if the government allows “self-regulation”, governance will improve significantly, as entities will be able to directly interact with each other on the distributed ledger via a trusted medium with reduced dependency on the cumbersome regulatory oversight and compliance. Improved transparency and accountability will significantly increase business efficiency, as the time and cost of permit approvals and issuance of permits will be drastically reduced through integrated smart contracts, helping to improve “ ease of doing business.
Blockchain is also beneficial in the Indian agricultural sector by deploying the technology in the National Agriculture Market (eNAM), which is an online trading platform for agricultural commodities in India. By recording the flow of information on the blockchain, audit trails of all the farmer’s products are created and data cannot be hindered as each record on the blockchain is cryptographically hashed. This reduces mistrust between farmers and arhatiyas (mandi middlemen) and also reduces transaction costs, increasing commodity trade across India. Additionally, blockchain encourages farmers to produce high quality goods, as the incentive to earn more for their products can be attached by providing certification of provenance of organic produce which fetches a higher price in the market. export.
In times of natural calamity, blockchain can help with disaster management and insurance claims by automatically releasing claims in real time by retrieving data required for claims management through smart contracts, saving money the costs and money involved in the process. The education sector benefits from blockchain as it allows for easier verification of education certificates and record keeping.
Blockchain has the potential to impact social structures and economies and its invention can be compared to other revolutionary innovations such as electricity, steam engine, computer and internet. The benefits of increased blockchain adoption are unprecedented, however, several factors will play a major role in accelerating its growth and technology awareness and education should be part of the education system.
To take full advantage of the technology, it is essential that there is cross-collaboration between institutions, industry and academia with government support. Furthermore, it is strongly recommended that since the technology is decentralized, the government works alongside other countries to achieve interoperability of data and processes on the blockchain to ensure smooth application in payment systems, health records, supply chain, etc.
Blockchain offers immense employment opportunities for India, especially since the technology requires software developers, business acumen and legal expertise. The application of blockchain will also act as a catalyst to revamp existing governance processes and achieve greater efficiency and transparency in the system.
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