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Tuesday, July 27, 2021

Systematic and selective land titling, and charging owners extra, is an idea worth pushing

Systematic and selective land titling, and charging owners extra, is an idea worth pushing.

Written by Bibek Debroy |
Updated: December 25, 2015 11:27:42 pm
Land titling, Niti Aayog, land prices, Indian express, express column To get to the terminal goal and implement these principles, there was a government-appointed committee, and it submitted a report in February 2014.

Land titling is sometimes controversial, unnecessarily so. It is also often associated with the name and work of Hernando de Soto, no less controversial. Stated simply, land titling allows individuals and/ or households to get clear formal titles to land. This cleans up land markets, establishes security of tenure and allows land to be used as collateral. (Those are the kinds of benefits catalogued in de Soto’s 2000 book, The Mystery of Capital). For land titling, we had our own advocate in D.C. Wadhwa, then at the Gokhale Institute of Politics and Economics, and known more for his fight against the re-promulgation of ordinances. Most of us know the essence of the problem.

As a mark of respect towards Professor Wadhwa, I am going to quote not from what he originally wrote in 1989, but from a subsequent piece (written in some anguish, because nothing had happened) in 2002: “The person shown in the record as responsible for paying land revenue for a particular piece of land is presumed to be the proprietor of that piece of land unless it is proved otherwise… But the entries in such records are not conclusive. Whatever be the entry in the record-of-rights in land, it is permissible to challenge it in an appropriate court or tribunal. Therefore, the revenue laws of the states lay down that no suit shall lie against the state government or any officer of the state government in respect of a claim to have an entry made in any record or register that is maintained by the government or to have any entry omitted or amended. Similarly, the law relating to registration of documents (deeds) also lays down that while accepting a document for registration, the registering authority need not concern itself about the validity of the document.”

Some cross-country controversy around land titling and de Soto is about whether it really led to presumed benefits, in the instances where it was tried. Other controversies are about the difficult transition from customary and common law systems to what is called Torrens, after Robert Richard Torrens, who drove it in parts of Australia in the second half of the 19th century.

Many common law jurisdictions do have Torrens systems now. Since 2008, there has been a National Land Records Modernisation Programme (NLRMP) and titling/ Torrens is the avowed terminal goal, with states like Andhra Pradesh, Delhi and Rajasthan even having experimented with preliminary legislation. In 2011, the department of land resources had a draft bill, with the intention of introducing titling in Union territories. Here is a quote from the 2008 NLRMP statement: “Puducherry is an example of the system of conclusive titles from within India itself. The French introduced the Torrens system there. However, after Independence, Pondicherry had to regress from conclusive titles to the presumptive titles system prevalent in India due to the provisions of the Registration Act, 1908. The system of conclusive titles is based on four basic principles: One, a single agency to handle land records (including the maintenance and updating of the textual records, maps, survey and settlement operations, registration of immovable property mutations, etc); second, the “mirror” principle, which states that, at any given moment, the land records mirror the ground reality; three, the “curtain” principle, which refers to the fact that the record of title is a true depiction of the ownership status, mutation is automatic following registration, there is no need of probing into past title transactions, and title is a conclusive proof of ownership; and four, title insurance, which refers to the fact that the title is guaranteed for its correctness and the party concerned is indemnified against any loss arising because of inaccuracy in this regard. At the moment, land records in India don’t reflect any of these principles.”

To get to the terminal goal and implement these principles, there was a government-appointed committee, and it submitted a report in February 2014. This sets out a land titling roadmap. (You will find the report on the internet.) The way I think about it, it is like every plot of land getting something like an Aadhaar number. However, a prerequisite is reliable (and not dated) cadastral surveys. De Soto is a great speaker too, and I once heard him dismiss this problem in the context of rural Indonesia: “Whenever I walked to a different farm, a different dog began to bark. Dogs know when titles change and humans don’t.”

Cadastral surveys/ resurveys are indeed a problem, though not as much as they used to be. But as a roadmap towards the terminal goal, the 2014 committee report is worth reading. It proposes systematic selective titling, not across the board. In the committee’s words, “Given the state of land records and cadastral surveys in our country, this model can be applied to the properties when new virgin titles are created, for example, when a builder/ developer of multi-storied apartment blocks hands over the ownership of an apartment (flat) to the first owner. Here the property has no past history and as such there is no worry about defects in the title. Of course, the title over land on which the property stands needs to be verified.” The committee estimated that 40-50 per cent of urban properties could be covered in the next 20 years.

One should probably not use the word “pilot”. These are instances where one can demonstrate the benefits of titling and perhaps even charge additional fees from owners. It’s an idea worth pushing.

The writer is member, Niti Aayog. Views are personal.

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