Land ahoy

Indias legal inheritance from Britain is not an unmixed blessing. The common-law system,as the tradition shared by the Commonwealth and the US is known,has long been considered superior,in terms of economic outcomes,to other competing systems the Napoleonic code,for example. One of the core reasons why is that it respects property rights more. But,paradoxically,bundled in with our common-law heritage is a complex system of proving ownership of land that betrays the systems origins in medieval England: to show a plot as your own,you needed a chain of title,documents that confirmed each change-of-ownership all the way back to when the land was first awarded by the sovereign. The remnants of this system are still with us,with words once bandied about by Mughal courtiers jamabandi,khasra girdawari,intqal,fard badar yet potent; and,even once you buy land,you are always vulnerable to legal challenges if one link in that entire chain of title is a little weak.

Which is why the Land Titling Bill that the rural development ministry has put out for comment is a truly extraordinary leap. An enormous amount of energy goes into contesting land title,always presumptive under the current system. A third of all lower-court civil cases are land-related; McKinsey has estimated in the past that barriers to free and conclusive exchange of land held back economic growth by 1.3 per cent each year. In the new system,a comprehensive,high-tech survey of land holding will go towards building a big new land register,a reformists Domesday Book,if you like. And then,if you buy some land,the old owners name is scrubbed out of the register,and replaced with yours and the government backs your right to the land.

This does many things. It frees you up to play with the capital that your land represents. It will spur people to investing in improvements to their rural holdings,now that they are no longer susceptible to capricious legal challenge. And we can finally expect that a free and fair market for land will develop in India,one that will speed up land acquisition,help spread the Green Revolution,and empower millions of poorer Indians. Not,of course,that even a reformist bill is without problems. Why,for example,should a bill for the ages include continual references to stamp duty,the problematic transaction tax which is due to be subsumed into the GST? The goal is quick,easy transfers. Nothing should stand in the way of the transformative power of that idea.