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Tuesday, July 27, 2021

Shine the light

Controversy over purchase of land in Ayodhya points to need for making deals more transparent, putting checks in place

By: Editorial |
Updated: June 18, 2021 7:43:43 am
Considering the stakes involved and the fact that assembly elections in Uttar Pradesh are only a few months away, it is unlikely that this controversy will fade away on its own.

The allegations of corruption surrounding the purchase of land in Ayodhya by the Ram Janmabhoomi Teerth Kshetra Trust only underscore the opacity of land markets in India. The chasm in prices between two transactions involving the same piece of land has led to doubts of the dealings not being kosher; there is inadequate transparency on how the price of the land in question escalated so quickly so sharply. On its part, the trust maintained that the land was purchased at a rate much lower than the market price of a nearby area, and that the payment was made through official banking channels. But, as reported in this paper, official records also show that the trust purchased two parcels of prime land in Ayodhya on the same day, at two very different prices. Considering the stakes involved and the fact that assembly elections in Uttar Pradesh are only a few months away, it is unlikely that this controversy will fade away on its own.

Land acquisition in India is a complicated, tortuous affair, with inefficiencies deeply entrenched in the process of acquisition. Information asymmetry and the lack of clear titles add to the challenges. Over the years, numerous allegations of the misuse of states’ discretionary power to change land use, which can dramatically increase the value of the piece of land, have also come to light. According to estimates, around two-thirds of all civil cases in India are related to land/property disputes. The recent example of controversial land transactions in the city of Amaravati underlines some of these long-standing issues. There are allegations that those with inside information of the region being declared as the capital of the new state bought land at cheap prices, only to profit handsomely once it was officially notified.

Considering the potential spin-offs of the construction of the Ram temple at Ayodhya for the larger economy — the state government is hopeful that once the temple is constructed, the city will be transformed into a major tourist destination — demand for what will now be prime real estate will skyrocket. However, such periods of rapid economic transformation also provide ripe moments for unscrupulous and resourceful individuals to manoeuvre to their advantage. It is necessary to guard against crony capitalism. Care must be taken to ensure that the entire process is transparent, and subject to stringent scrutiny. Adequate checks must be put in place, lest the process is shadowed by recurrent allegations.

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