For over 30 years, since 1988, India has been trying to fix the poor quality of its land records; new schemes have begun yet again. But rural land markets remain mostly illiquid, trapping farmers in agriculture. Mint explains
For over 30 years, since 1988, India has been trying to fix the poor quality of its land records; new schemes have begun yet again. But rural land markets remain mostly illiquid, trapping farmers in agriculture. Mint explains.
In large parts of India, many key economically relevant facts about land—such as ownership, extant of boundary, pending legal claims, among others—are not easily verifiable. Even the simple act of digitizing existing records has moved at snail’s pace, with the task remaining incomplete in many states. Disputes, counter-claims and legal tangles are common in India’s land markets. These bottlenecks matter because 77% of average Indian household’s assets are locked up in land and real estate, according to RBI. In the US, this share is about 40%. For many Indian farmers, land would be the only tangible high-value asset.
What impact does this have on farm economy?
With limited prospects to safely monetize land assets, many farm families remain trapped in agriculture. With unfree markets in land, farmers are suspicious of freer markets at the point of sale of produce. India’s approach is thus lopsided when compared to China, which created alternative opportunities through rural enterprises first. Between 1978 and 2003, output of these enterprises grew annually at 23%. This offered farmers a chance to springboard into other economic spheres by using their existing assets. It also created a “buy in" for reforms. By the 1990s, China’s support prices got close to market prices.
What attempts have been made to fix the problem?
Centre had launched a Computerization of Land Records scheme back in 1988. The latest ongoing attempt is the Digital India Land Record Modernization Programme, previously called National Land Record Modernization Programme, launched by the then UPA government in 2008. Progress has been patchy, with only a few states making any significant advance.
The PM Modi-led government recently launched a scheme called Svamitva, which aims to distribute property ID cards to people living in abadi village land (or habited areas). In effect, the scheme aims to create new records where none existed—using drone surveys. But problems are rife even in the pilot phase. The scheme is run through the panchayati raj department, while ownership and transaction records are maintained at the state level. If the two databases do not talk seamlessly, the exercise would become redundant in a few years.
What’s the best way to move forward?
Since land is a state subject, the success of all schemes attempting to bring India’s land records into 21st century depends on reaching a national consensus involving all states. With agricultural subsidies being increasingly linked to land ownership via direct digital transfers, questions on who owns what and whether the owner is indeed the actual cultivator will only get more contentious. Many aspects of the rural economy begin and end with questions about land, and India is yet to get a firm fix on that first-stage reform
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