Modernizing land records in India

Introduction:

India is one of the fastest growing economies in the world, but its growth potential has been compromised by resource misallocation, especially when it comes to land.

India is one of the most land-scarce countries in the world. The demand for land has accelerated with the increase in the pace of industrialization and urbanization.

Impact of poor land records:

Nearly two-thirds of all pending cases in Indian courts are related to property disputes.

NITI Aayog has said that such property cases take an average of 20 years to settle.

The result is that millions of Indians cannot use their principal asset as collateral to borrow from the formal financial system. The poor suffer the most.

A large proportion of government land lies unused. A large part of the unused land is high-value property in prime areas in major cities

Land hoarding by government agencies has created artificial scarcity and is one of the main drivers of skyrocketing urban real estate prices.

Reasons for non-availability of ownership data:

In India, we have a system of registered sale deeds and not land titles.

The Transfer of Property Act, 1882, provides that the right to an immovable property (or land) can be transferred or sold only by a registered document.

These documents are registered under the Registration Act, 1908. Therefore, the transaction gets registered, and not the land title.

This implies that even bona fide property transactions may not always guarantee ownership, as earlier transactions could be challenged.

Land ownership is established through multiple documents maintained by different departments, making it cumbersome to access them

For example, sale deeds are stored in the registration department, maps are stored in the survey department, and property tax receipts are with the revenue department

These departments work in silos and do not update the data in a timely manner, which results in discrepancies. One has to go back to several years of documentation to find any ownership claims on a piece of property, which causes delays.

The cost of registering property is high and, hence, people avoid registering transactions

While registering a sale deed, the buyer has to pay a stamp duty along with the registration fee.

In India, stamp duty rates across states vary between 4% and 10%, compared to 1% and 4% in other countries. The registration fee is an additional 0.5% to 2%, on an average.

Under the Registration Act, 1908, registration of property is not mandatory for transactions such as the acquisition of land by the government, property leased for less than one year, and heirship partitions

To improve the quality of land records in the country:

The Digital India Land Records Modernisation Programme (DILRMP), the erstwhile National Land Records Modernisation Programme seeks to improve the quality of land records in the country, make them more accessible, and move towards government-guaranteed titles.

A land title is a document that helps determine land ownership.

This will be achieved through complete computerization of the property registration process and digitization of all land records.

Digital India Land Records Modernisation Programme (DILRMP):

The main aims of DILRMP are to usher in a system of updated land records, automated and automatic mutation, integration between textual and spatial records, inter-connectivity between revenue and registration, to replace the present deeds registration and presumptive title system with that of conclusive titling with title guarantee.

The DILRMP has 3 major components

• Computerization of land record
• Survey/re-survey
• Computerization of Registration.

Benefits to citizens from DILRMP:

The citizen is expected to benefit from DILRMP in one or more of the following ways:

• Real-time land ownership records will be available to the citizen
• Since the records will be placed on the websites with proper security IDs, property owners will have free access to their records without any compromise in regard to confidentiality of the information.

• Free accessibility to the records will reduce interface between the citizen and the Government functionaries, thereby reducing rent seeking and harassment.
• Public-private partnership (PPP) mode of service delivery will further reduce citizen interface with Govt. machinery, while adding to the convenience

• Abolition of stamp papers and payment of stamp duty and registration fees through banks, etc. will also reduce interface with the Registration machinery
• With the use of IT inter linkages; the time for obtaining RoRs, etc. will be drastically reduced
• The single-window service or the web-enabled “anytime-anywhere” access will save the citizen time and effort in obtaining RoRs, etc.

• Automatic and automated mutations will significantly reduce the scope of fraudulent property deals
• Conclusive titling will also significantly reduce litigation
• These records will be tamper-proof
• This method will permit e-linkages to credit facilities

• Market value information will be available on the website to the citizen
• Certificates based on land data (e.g., domicile, caste, income, etc.) will be available to the citizen through computers
• Information on eligibility for Government programs will be available, based on the data
• Issuance of land passbooks with relevant information will be facilitated.

Conclusion:

India is one of the most unequal countries in the world. The richest 1% in India own 53% of wealthcompared to the richest 1% in the US who own 37.3% of the wealth.

Clear land titles will ease a lot of constraints from making it easier for the poor to borrow from the formal financial sector to easing commercial land acquisition for infrastructure projects instead of the misuse of eminent domain.

Reducing land market distortions is a key step towards making growth more inclusive and achieving double-digit growth.

Way Forward:

Solving the problem of wastage could generate employment and pull masses out of poverty, thereby aiding the economy to grow fast.

The need of the hour is a comprehensive inventory of land resources and usage patterns for all government branches.

Conclusive titling has been proposed to address issues with unclear land titles.

In this system, the government provides guaranteed titles and compensation in case of any ownership disputes. This will require several changes in existing laws that govern registration and transfer of land.

A system of registered property titles will have to be developed as the primary evidence of ownership. All existing land records will have to be updated to ensure that they are free of any encumbrance.

Information on land records, which is currently spread across multiple departments, will have to be consolidated.