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Can A Move Towards Blockchain Technology Help Inhibit Scams In Welfare Schemes?

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Amid the corona crisis when everyone is in home quarantine facing their issues, be it mental healthcare, passive lifestyle, financial crisis, dooming businesses, etc., we can’t even compare our sufferings to the landless labourers who are migrating from one place to another. 

Many of them are looking up to the government to support their livelihood in this crisis. Most of those hands have built our roads, bridges and homes to shelter us and speed up progress in India. Now, they have nothing left to feed themselves and their low-income families. 

Do you also feel that nothing could be as unfortunate as this situation for India? If yes, you will be disgusted to know that deeply entrenched corruption and greed of middlemen is not even sparing these landless peasants. Without analysing the government, I would rather focus on the framework that is working to enhance the rural livelihood opportunities and social security for these peasants. 

There are many schemes like MGNREGA, PDS, etc. through which the government is trying to enhance rural livelihood opportunities and provide people with food items at a subsidised rate. So, what is the issue? The issue lies in the mismatch of government efforts and what reaches the recipients. There are shocking cases of fraud in such schemes. MGNREGA, which provides at least a 100 days livelihood opportunity to rural adults, regarded as the world’s largest public work program in 2015 by the World Bank, has a huge history of scams. 

In 2012, 10 lakh fake job cards were obtained from Karnataka that amounts to a loss of 600 crores. Often, rural workers complain in Rural Development and Panchayat Raj (RDPR) against middlemen and officials for violating guidelines of MGNREGA. It’s one of the most common things you might encounter interviewing rural people and listening to their stories of how they never get paid or how they never get the work from higher authorities. 

Ironical is the right word for this situation. But is there anything in this technology-driven world that can check the corruption happening around these kinds of schemes? The way blockchain technology (BCT) is bringing a revolution in the world; it can be a ray of hope for the Indian government as well. BCT stores every information in electronic format and once the information is stored on a blockchain, it’s immutable (as it works on consensus algorithms). All the information is shared with the complete network and is accessible to all; thus, it inhibits frauds. 

Smart contracts are self-executed codes based on BCT that help eliminate middlemen and maintain the process swiftly and as per the encoded information. What if we design a smart contract for PDS or MGNREGA, the identification of beneficiaries to disbursal of subsidies everything gets done using self-executed codes written on the blockchain. The need for involving middlemen can be completely eliminated by adopting BCT. 

But even though we know that BCT can change the future of schemes like MGNREGA and PDS, is this the right time to adopt such technology in India? There are many challenges in adopting BCT by the government. One of the major hurdles is a lack of digital literacy and political will to adopt it. A majority of Indians are still not ready to use high-end technology. Apart from a lack of digital literacy and technological advancement, lack of trust is another issue with Indians. When we talk about BCT, we should also talk about cybersecurity and the framework to secure digital India. 

There is a lot to do in this space, but the sooner we adapt ourselves to new technologies, the sooner we will find solutions for other problems. India needs to take BCT seriously and should start seeing it as a viable solution to combat the deeply entrenched corruption in government systems.

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