Tomorrowland: Indian state’s pilot shows the world how to put land records on blockchain

Photo credit: Rajarshi Mitra.

Property fraud is rampant in India and takes many forms. It’s one of the biggest avenues for investing black money. One way is to hold property in other people’s names, and this practice is called benami, which means ‘false name.’

In this murky scene, the government does not only lose revenue, but buyers can also be duped when the same property is sold to multiple entities. What exacerbates it is rampant corruption. The Indian government introduced a new law and have seized benami properties worth US$282 million since November last year.

We have already given up a lot of our black boxes. We will lead this transformation.

Sprawled across 160,000 sq km on the east coast with a population of over 50 million, the state of Andhra Pradesh wants to use blockchain technology to tackle the problem. Blockchain’s immutability can make land records tamper-proof. Its visibility to multiple entities also makes the system transparent.

The state is running a pilot by Swedish startup ChromaWay to put land records on a blockchain in fintech hub Vizag.

Doing a pilot is one thing, but executing it on the ground can upset the apple cart even within government. So, does Nara Lokesh, the state’s IT minister, expect resistance from vested interests who have gotten used to exploiting the current system?

“We have already given up a lot of our black boxes. Land records have been made online,” Lokesh tells Tech in Asia, referring to the ePragati program launched recently in the state to digitize government services.

The next move for e-governance is blockchain, starting with land records but with potential applications in several other areas like health services, food supplies, and finance. “We will lead this transformation. That’s the only way we can get rid of corruption also,” adds Lokesh.

ChromaWay CEO and co-founder Henrik Hjelte (right) makes a presentation to Andhra Pradesh IT minister Nara Lokesh (wearing white shirt). Photo credit: Nara Lokesh.

Last month, ChromaWay made a pitch for the government project and got the nod to run a pilot. A similar project in its home country Sweden has progressed beyond the trial stage and has a wider ambit of buying and selling property. Apart from involving the land registry, banks, buyers, sellers, and agents, it deals with titles and other documents like mortgages as well as payments.

“In Sweden, we focus on the whole process of real estate transactions. Here in Andhra Pradesh, it’s more about storage of titles, security aspects, and transparency,” says ChromaWay co-founder and CEO Henrik Hjelte, who has been a developer for over 25 years. He was a finance and IT consultant before becoming an early blockchain entrepreneur.

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