Reforms Required

As noted here India ranks a dismal 46 out of 97 countries examined in the 2014 edition of the International Property Rights Index (IPRI), behind many developing countries. There exist significant problems with our current property rights regime. Millions of Indians lack a clear, definite title—the titles are either not well-defined or not recognized by the government. (as is the case with tribals living in proximity to forests) The following are some of the major issues in India’s present property rights regime—

Lack of definite titles. Indiscriminate and excessive use of Compulsory Acquisition Lack of proper land administration Regulatory restrictions preventing individuals from freely employing their property (particularly ‘land use regulations.’)

Compulsory Acquisition:

In the last many decades, the state has enlarged the scope of compulsory acquisition—displacing many in the process without adequate compensation or rehabilitation. This has been the source of a lot of discontent among the people, fuelling several grass root movements with people demanding their rights.

Forcible land acquisition is considered to be the necessary price for economic growth and development. It is feared that if we do not resort to forcible acquisitions, large scale projects would not culminate as farmers would refuse to part with their land.

This fear, for most part, is misplaced. There are several projects that have culminated without state interference or resort to forcible acquisition. A notable example is the city of Gurgaon in Haryana, which was developed almost entirely without forcible acquisition. Likewise, if the prevailing laws did not create impediments for businesses to negotiate directly with the farmers; compulsory acquisition and state interference would not need to be resorted to.

There is another point to be noted here—the way property is held and the use to which it is put is decided by the people. As needs change, the ownership and the manner in which land is employed also changes. This decision is made by the people, and should not rest with the government bureaucrats. When these decisions rest with the bureaucrats, the resultant outcomes are neither just, nor economically efficient.

To be sure, there has been some restraint in the last few years in the scope of compulsory acquisitions with the coming of the new land acquisition law; but that has come with its own set of problems. The new bill shows no significant change in paradigm—it still holds land acquisitions to be inevitable. It only seeks to make the new law ‘more just and fair.’ But a law that is coercive and unfair to start with cannot be made ‘less coercive.’ The new law claims to be in the interest of the farmers—but does nothing to extend stronger property rights to them. In reality, the new bill simply creates impediments and bureaucratic hassles that would prevent businesses from directly negotiating with the farmers.

More than anything else, the land acquisition bill points to a larger problem. It is a testimony to the paradigm of development that we have come to follow—one that considers necessary and inevitable the fact of plunder that follows in its wake.

In a civilized society, the scope for coercion and forcible acquisitions needs to be minimal. Indeed, unless the circumstances are particularly compelling, there exists no moral case to forcibly acquire anyone’s property. In the last many decades, the state’s exercise of compulsory acquisition has been indiscriminate and excessive. The state should act neither as brokers, nor as agents of big businesses to negotiate with the farmers for them. The way forward should lie in minimizing the scope of acquisition and according stronger property rights to the farmers.

Land Use and Other Regulatory Restrictions

There exist several regulations that prevent individuals from freely employing their property. For instance, a farmer cannot sell his land for ‘non-agricultural purposes’ without obtaining the appropriate permissions. These ‘land use’ regulations severely depress the value and price of the land.

These regulations are supposedly in place to ‘protect the farmers.’ In reality, they are nothing but an avenue for corruption and misappropriating the property of the very farmers they are intended to protect.

Land use regulations do not only fail to serve the purpose they’re intended to serve—there exists no reasonable reason for their existence. The manner in and the uses to which land is employed reflects the changing needs of the people—as needs of people change, so does the way in which land is employed. For instance, as agricultural productivity increased, less land was required to feed the population, and this people began to instead employ this land in industry.

People, thus decide in the ways land is to be used. With laws and restrictions such as these, these decisions on the employment of land are instead taken by bureaucrats instead of the people. The decisions of the bureaucrats, of course, are taken on the grounds of political expediency instead of any objective assessment of the people’s needs. Likewise, several such regulations restrict what people can do with their land and property.

Land Titles not Recognized by the State

Millions of Indians lack a clear title to their land, and it is hard to establish your title even if you’ve been living on your land for years.

In many cases, the titles are not recognized by the government. This is true of the tribals and indigenous tribes living in proximity to forests. These tribals had been living on their land for centuries, but they were declared encroachers on their own land in British India. They were denied titles to their land and access to forest produce. Even after independence, the India government continued to deny forest dwellers the right to their land.

Only recently has this historical justice been somewhat rectified, with the passing of the Forest Rights Act (2005), which seeks to recognize the land titles of the forest dwellers. Even though the act created mechanisms for the tribals to establish and validate their titles; their claims were mostly rejected by the forest officials. However, with the active support of civil society organisations; the law has had some success in Gujarat. While the act acknowledges the rights of tribals and is a step forward in correcting this historical injustice; it has, for most parts of India, not been realized. (To learn more about the Forest Rights Act, Click Here)

Poor Land Administration

The current system of land administration has its roots in colonial India. The institutions and the processes developed since have only been slightly modified. Our present system of land administration needs to be reformed substantially.

For one, land records are maintained poorly and are not fully computerized. The lack of proper titling means that one’s claim on one’s property and land is not definite or conclusive. if one’s title is in conflict or not properly defined, one cannot employ it in productive outlets.

Our land administration needs an overhaul. We need to develop institutions and processes that are easily accessible and provide mechanisms to the people to definitely establish their land titles.

The economic costs of not having secure and defined property rights are enormous. The lack of property rights hurts people, and it hurts enterprise. None of these issues, unfortunately, are being seriously addressed by the government or our policy makers. The need of the hour, therefore, is a civil society movement that will systematically address these questions and bring these issues to the light of our government.

More About Property Rights In India

What Are Property Rights ?
Importance Of Property Rights
Current Situation In India
Reforms Required
India Property Rights Timeline