Recent slowdown of the Indian economy has been a matter of concern for policymakers. The 5 per cent growth rate for the fiscal year 2019-20 is far below the desired double digit growth rate for India, attributable to a mix of both, internal and external factors. India’s economic journey proves to be an example of partial success. The early success was triggered by the liberalization efforts in 1991 entailing the removal of industrial controls and licenses, following a phase of socialist policies for about three decades post-independence (with a Hindu growth rate of 3.5 per cent). After the economic reforms in 1991, the growth rate reached around 5 per cent for the three year period of 1994-97. However, external factors like global economic crisis have dwindled this economic growth, the last one being the global financial crisis in 2008-09. Since the crisis, India has not been able to recover and attain the desired double digit growth, something that China exhibited in its peak years. The unsustainable growth model of India despite the macro-economic reforms reflects the inherent weaknesses of the economy in the form of domestic rigidities.
Land Policy and Governance, an Impediment to India’s Economic Growth
A major area of concern that drags the growth of the economy has been the festering issue of land policy. Issues and challenges surface now and then in the form of widespread land scams, litigation cases, land acquisition hurdles, distorted land pricing mechanism. The root cause of the problem lies in the failure of Indian administration to have evolved from the British era’s land record and revenue measures. Lack of attention given to land record management in India is reflected in the dearth of any major change in the land record management system over the years.
Evolution of Land Record Management: What is the Missing Link?
Under the British, the purpose of land records was tax revenue collection; the format of the records thus was a reflection of that. Over the years, the objective of land based revenue collection has reduced significantly – for one of the largest Indian States, Uttar Pradesh, the land revenue collection as a percentage of total tax revenue has fallen from 40 per cent in 1957-58 to a minuscule proportion of 0.3 per cent in 2019-20. Despite this redundancy, the land records for most of Indian States/UTs continue to exhibit the relevant columns for tax revenue collection details. This signifies lack of priority conferred upon the land record quality and its relevance as per the current needs.
Post-independence, a slew of land reforms were proposed and introduced across India. The blueprint for these reforms as laid out by the Centre at the time essentially addressed six essential issues:
a) Abolition of intermediaries
b) Abolition or regulation of tenancy and improving the security of the tenants
c) Fixation of ceilings on landholdings and redistribution of surplus land
d) Payment of compensation for acquired lands
e) Consolidation of holdings
f) Choice of appropriate form of organisation and promotion of cooperatives
However, land being a state subject, the implementation of these reforms varied across states. This has translated into divergent paths of land policy and governance in Indian States/UTs. This disparity is also reflected in the land records across states, characterized by the lack of standardized formats of data collection and recording one comes across in India.
With the objective of land records management for land revenue collection becoming a thing of the past, land revenue officials are also observed to be lax in their attitude towards record keeping and management. Instead of redefining land records as a proof of land/property ownership, these officials have been loaded with miscellaneous work like natural disaster management and municipal duties that gives them lesser time to focus on land records accuracy and quality.
Changing the Objective of Land Record Management
With the transition of country from an agrarian economy to a more industry and services driven economy, it is imperative that land records capture details relevant for the times. Today, accurate land records are the minimum essential requirements for supporting efficient and hassle free development. These records must necessarily reflect ground reality and capture all the possible encumbrances – mortgages, litigation cases, land acquisition proceeding or land-use restrictions – clearly to limit the dispute cases and hence make the transaction efficient.
An assessment of the Digital India Land Record Modernization Program (DI-LRMP) conducted by National Council of Applied Economic Research (NCAER) in Himachal Pradesh revealed that around 72 per cent of cases with a variation between reported and the on-ground possession, were due to excessive joint ownership. With such a scenario, when the on-ground subdivision is not reflected in the land records, the chances of it being used as ownership proof for any possible loan from financial institutions slims down, adversely impacting the growth of mortgage market. Further, unclear ownership also makes acquisition processes tedious and long drawn, causing significant escalation of project costs.
Poor land record management also often serves to be the raison d’être for legal disputes over the land/property. Often, the area/extent of land recorded in the legal documents is found to vary with respect to the ground situation. Surveys/Re-surveys in Indian States/UTs have progressed at a snail’s place or have been stalled due to lack of priority towards such detailing. This lack of attention essentially derives from the fact that land revenue collection is no longer the objective of the land record departments.
NCAER’s recent work on creating a nationwide land records and services index has shown, that barring some instances of mortgages, other restrictions/conditions over a plot of land are seldom noted in the textual records. Only 2 states were found to record civil court cases concerning land parcels, while 8 States/UTs were found to record an instance of revenue court cases. With such a poor record of ongoing court cases, property is likely to exchange hands on illegitimate grounds and can further accentuate the chances of legal disputes.
It is clear that there is an urgent need for land record departments across States/UTs to re-orient their focus on ensuring quality and accuracy of land records. Re-establishing land records as a tool for ensuring well-functioning mortgage market and for limiting the land/property related disputes is essential. Clear land records can be a major step towards removing bottlenecks to land reforms in India, and the sooner it happens, the better the chances of spurring rapid growth in India get.
This piece was originally published in Arthasha-Stree, Prerna Prabhakar’s personal blog.