Well-defined property rights soon

Centre Asks States To Put In Place A System To Ensure Conclusive Title Guarantees

India's litigation-ridden property rights system might finally get a much-needed makeover, with the urban development ministry writing to state and local authorities to put in place a property title certification system to ensure conclusive title guarantees. The ministry also plans to organize a workshop for local officials to help chalk out an action plan.

This could revolutionise the land market and also have major implications for India's economy. Celebrated economist Hernando de Soto has pointed out that capitalism truly succeeds only in countries with well-defined property rights. In developed countries, assets can be leveraged as collateral to take loans, which form the basis of entrepreneurship. But the lack of property rights in developing countries turns assets into 'dead capital'. It's an argument that resonates in India, with property disputes being a bane for millions. The cult hit Khosla ka Ghosla made the point humorously, but many people have suffered the same problem firsthand, and found nothing even remotely funny about it.

The root of the problem in India lies in the fact that the present system of recording rights is only presumptive. In other words, the person shown on government records as paying property or revenue tax on a property is presumed to be its owner. But in case of a dispute, it still requires courts to establish ownership. Now, in a bid to resolve the problem, the ministry has suggested that city authorities maintain three sets of registers register of titles, register for disputes and register for charges and covenants which together would constitute the complete record of title of all properties. In a letter to all chief secretaries, urban development secretary M Ra-machandran has written, "The objective of reforms is to enable cities to move towards guaranteed title systems. It seeks to create a public record of titles that truly describe the property as well as the title and has a system to reflect any transaction in real time." The ministry has directed city agencies to designate a title registration officer, who could be the collector or any such other authority

To fasten the grant of conclusive title guarantees, the ministry wants cities to establish land titling tribunals and land titling appellate tribunals. "Under JNNURM, all states have committed to introduce reforms. We want them to expedite the process," said an official, pointing out that states like Andhra Pradesh and Rajasthan are already working on schemes to guarantee land titles.

Property experts point out that under the existing system, fragmented land holdings have not been covered by surveys since independence.