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Summary: National Strategy on Blockchain revised by MEITY

The IT Ministry plans to rope in government bodies to implement a framework for the adoption of blockchain tech.

A National Blockchain Framework (NBF) can be developed wherein different domains such as health, agriculture, education, and so on would be distributed on a common blockchain infrastructure, the Ministry of Electronics and Information Technology (MeitY) said in a 52-page report on the National Strategy for Blockchain.

Initially, the NBF will be used for e-governance domains and thereafter, the transition would be made for use cases beyond its ambit, the report added.  While these applications are being implemented, MeitY suggested that laws and policies would have to be modified or amended. Certain bodies too will be constituted to provide guidance at the policy level for blockchain initiatives in the country. They are —

  • Blockchain Advisory Council: The minister in MeitY would be the chairperson and representatives from various Union government ministries/departments, states, academia, and industry will be members of this council.
  • Steering Committee: Secretary in MeitY to be the chairperson, with secretaries of various Union government ministries, selected state IT secretaries to be members of the body which will review and monitor implementation of the National Blockchain Strategy.

Blockchain is still an emerging technology and other than a few pilot projects in the private sector or by the government, its commercial application and adoption numbers have been slow. Therefore, the strategy recommended that to increase blockchain adoption, a framework must be created. Earlier, in February, MeitY had released a draft of its National Strategy for Blockchain.

For the complete revised report, please refer here.

What would the NBF look like?

Source: Ministry of Electronics and IT

Smart control logic: On each blockchain platform under the NBF, the domain-specific chain such as property chain, health chain, education chain, etc. may be hosted and controlled using the smart contract logic.

Smart contracts: MeitY said that the framework should be able to hold multiple smart contracts and ledgers

API: “Basic process automation functional aspects related to assets such as asset creation, linking of asset to users, transferring or tracking of asset, etc. could be provided using easy to use and standard APIs using the National Blockchain API,” MeitY said.

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Geographically distributed nodes: The NBF would be hosted on nodes that are geographically distributed across the country, MeitY said.

These other features will also be given room in the NBF —

  • Proof of storage
  • Proof of existence
  • Predictive visual analytics

Role of various government institutions in implementing NBF

  • C-DAC: MeitY said that C-DAC would work on the research and development of NBF, and would address various technological challenges during its implementation. It will also work on user awareness and skill development programmes.
  • National Information Centre: The NIC, will host the national-level blockchain infrastructure and also develop applications on blockchain.
  • Standardisation Testing and Quality Certification (STQC): As the name suggests, this body will work on standardising, testing, and certifying blockchain initiatives.
  • Institute for Development and Research in Banking Technology, Society for Electronic Transactions and Security, and other institutes: MeitY said these institutions will work to address research challenges.
  • National e-Governance Division (NeGD): This body will work on the implementation of projects undertaken by various ministries and departments, MeitY said.

Other outcomes of the National Strategy on Blockchain

Apart from the National Blockchain Framework, MeitY outlined several other strategies proposed to be developed to support NBF. They are —

Adoption incentives: Union and state governments have been asked to formulate respective schemes and guidelines detailing out fiscal and non-fiscal incentives in this sector to enable large-scale adoption of blockchain in the country.

Awareness among judiciary: MeitY said that awareness should be created among the judiciary about smart contracts

Human resource development: For developing skilled personnel in blockchain, MeitY recommended the Union government’s Future Skills programme and added that other capacity-building programmes will be taken up.

Digilocker to be integrated into Blockchain

In the section about the integration of national-level services with the blockchain, MeitY said that Digilocker would be one such integrated service. This online service provides every citizen with an account in the cloud to access documents/certificates such as vehicle registration, academic certificates and mark sheets, driving license, and so on, said MeitY.

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These are other existing applications that are set to be integrated into blockchain —

  • eSign: eSign is a Public Key Infrastructure (PKI)-based online service, which helps the citizens in the instant signing of their documents, MeitY said.
  • ePramaan: ePramaan is a standards-based e-authentication framework that provides “Assertion Markup Language (SAML) based Single Sign On which can seamlessly get integrated with state and national level applications,” added MeitY.

What about privacy and security?

The National Strategy for Blockchain received a slew of suggestions on “security and privacy”  as part of the recommendations from stakeholders to MeitY during a consultation process. Here’s what the ministry has and hasn’t adopted from the recommendations:

What MeitY agreed to —

  • Security audit and assessment: Stakeholders said security audit and assessment processes and guidelines may be evolved considering smart contacts and other specific constructs of blockchain. This is reflected in the strategy document for the National Blockchain Framework, wherein MeitY said that those who are interested in installing geographical nodes have to “undergo security audit and assessment by empanelled agencies before being part of the national level blockchain infrastructure”.
  • Security and privacy as vertical components: Stakeholders said that security and privacy should be addressed across various layers in the blockchain infrastructure. This is reflected in the mentioning of security and privacy by MeitY in various sections of the strategy document.

What MeitY seemingly dismissed —

  • Data localisation: Stakeholders suggested to MeitY that data localisation should be enabled in the framework. “This may be achieved by hosting the blockchain infrastructure, data and smart contracts within the country. In future, infrastructure from various organisations and state data centres within the country maybe contributed through crowd-sourcing mechanisms towards implementation of the framework,” it read. The strategy document does not mention data localisation anywhere.

What about a blockchain platform for managing multiple IDs?

Despite several government officials claiming recently that a blockchain platform was being developed by the Indian government wherein various government-issued IDs such as Unique Health ID will be hosted, the National Strategy for Blockchain does not mention any such use cases.

Recently in a webinar, Centre for Development of Advanced Computing (CDAC) Joint Director Lakshmi Eswari had said that the digital ID system is one of the applications that will be hosted on the universal blockchain platform and the government would onboard other applications in the coming five years.

Justifying the blockchain-based ID management system, Saurabh Thukral, Senior Specialist at NITI Aayog, said that currently, it is hard for Indians to prove their identity in the online sphere. The government wants to have a mechanism where citizens can prove their identity like one does in the offline world by sharing physical ID cards.

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