Blockchain, not blockheads, can provide solutions to India’s problems

J Mulraj | Updated on December 06, 2019 Published on December 06, 2019

Although India’s ranking on the World Bank’s Ease of Doing Business league table has risen, and deserves praise, the World Bank, last week, stated that the Government of Narendra Modi needs to do much more in order to attract foreign investment which would provide much-needed jobs. The trade spat between the US and China has led to transfer of manufacturing from China but little has come to India.

In particular, labour and land reforms, and the sanctity of contracts need to be addressed. Let’s start with the last.

Sanctity of contracts: The new Government in Maharashtra has shelved the Mumbai-Ahmedabad bullet train project, funded by Japan, and put others on hold. Earlier, the new AP Government cancelled an internationally-funded project being undertaken in collaboration with Singapore Government/ companies, to build a new capital city at Amravati.

Why would foreign investors invest in a country where contracts are unilaterally scrapped or arbitration awards treated with disdain? Unless our judiciary treats contractual obligations seriously, and disposes of breaches swiftly, without interminable adjournments, foreign investment won’t come in, jobs won’t be created and new technologies won’t become available.

Flexibility in labour laws; Over 20 years ago, an industrialist suggested that the government allow industry the leeway to fire just 3 per cent of the workforce, after proper procedure and with due compensation. This, in itself, would improve discipline. Current labour laws protect those having one, at the cost of a larger number of those needing one, because entrepreneurs are wary of investing. Should be considered.

Land records: Proper land records are the number one priority for any nation. Our polity does not want this. It wants to be able to manipulate land titles. The local official, the Tahsildar, has unbelievable powers to distort records using a mutation entry.

If Modi’s Government is really serious, there is a solution provided by Blockchain, to store land records in a distributed ledger which cannot be hacked or tampered with. Add to that ‘smart contracts’ and it becomes easy to deal in property in a transparent and secure manner. This would make it easy to attract FDI and create jobs.

The government must also start looking at the advantages of crypto currencies, such as Bitcoin, one of many.

It is safe to assume that most politicians and bureaucrats do not understand blockchain, much less crypto currencies. Blockheads cannot solve our problems, for they drive through life looking in the rear-view mirror instead of the windscreen.

Hence, whilst the rest of the world has developed the technologies needed for the future (5G, AI, robotics, digital payments, etc) India still devotes leadership time over seat sharing, caste/ culture/ religious divides, and has made little progress on new technologies. Remember, it was the European nations that were leaders in the Second Industrial Revolution that became rich enough to conquer others, including India.

Far from preparing for 5G, our government, in its insatiable greed, has destroyed telecom companies by taking a bite from gross revenue, instead of net. Hence, discounts, etc, offered to customers, are borne by telcos. Telcos have been slapped with a huge bill and have had to postpone 5G by five years, and hike call rates by 40 per cent.

In short, the blockheads have succeeded, in their quest for revenue unmindful of the customer, in killing 5G (China will march ahead), knifing the consumer who now pays more for voice and data, which, in turn, stifles innovation in other areas.

Senators in Canada called an expert in 2014, in a closed room hearing, to teach them about bitcoin and address their doubts. Australia did the same. Indian politicians, who consider themselves as gods of knowledge, don’t feel the need to seek advice.

When they do, India will tap its full potential.

The writer is India Head — Finance Asia/Haymarket. The views are personal.

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Published on December 06, 2019
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