Clearing land

Clearing land

The exercise of granting clear land titles in urban areas by Rajasthan, Andhra Pradesh and Karnataka can only be welcomed. As Mint has been reporting, land titles and the broader issue of property rights have been ignored in India for far too long. This prevents investment and development of property except in big cities. Corruption and inefficiency in land transactions are now considered a rule of the game.

The results are there for all to see. A recent World Bank study on land policies in India found the ratio of land cost to per capita gross domestic product to be one of the highest in the world. The ratios for New Delhi and Mumbai are 100 and 115, respectively. Tokyo’s 9 and Singapore’s 12 seem puny in comparison. Rural India does not fare any better; the only difference being the slower turnover in the land market in these areas.

The three states hope to bypass these by a mix of technology and incentives. Appropriate mapping technology coupled with dematerialized storage, instead of paper documentation that can be manipulated, is the route being taken by them. One incentive that may push things in the right direction is eligibility for funding under the Jawaharlal Nehru National Urban Renewal Mission. Titling reform is necessary for such funding.

Perhaps this may work in cities such as New Delhi, Hyderabad or Jaipur, but doubts will remain in the case of India at large, where a perverse set of institutional and political incentives is in operation. Technical fixes are unlikely to overcome them.

To begin with, the system of land records based on field surveys by revenue officers went out of vogue soon after the British left India. This happened because land revenue ceased to be an important source of revenue after independence. As a result, land settlement, once carried out at regular intervals, has now become extinct. With that has gone the know-how that came with the job. Updating land records is not a priority in states anymore.

If records are out of date, information that was once available in one office now has to be collated from different agencies of the state. This not only adds to the transaction costs, but has also allowed land grabbers to become a part of the system. To give an example, even if one has revenue records for a piece of land, the officials concerned are unlikely to know anything about litigation, disputes, etc., for that land. Even if one registers the property, that will not make it secure from legal problems.

This vacuum has been filled by land grabbers, who are either politicians or their affiliates. The problem is especially acute in North India. In states such as Punjab, Haryana and Uttar Pradesh, the system is unlikely to be reformed as politicians across the spectrum own large tracts of land acquired by dubious means. Further, many layers of bureaucratic controls ensure that corruption on the administrative side will remain well entrenched.

This may sound hopeless. In many cases it is. However, there are a number of steps that can be taken to prevent the situation from deteriorating further. Easier and quicker judicial resolution of land disputes is the key here. If land is grabbed from poor owners, they should have a fair chance to get it back through judicial intervention. But given the procedural challenges that accompany any litigation, this requires radically amending laws to speed up decision-making. It also requires useless laws to be erased from the statute book.

The Central government, too, can chip in. The states routinely demand money for projects, citing financial constraints.

In future, it can make funding for projects linked to land incumbent on reforms and cleaning up of the stables. Here success or failure will depend on the pressure that citizens exert on politicians. Unless that happens, it will be business as usual.

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