Land Monetisation - who is the Owner?

In an interesting book, "The mystery of capital", Hernando De Soto argues that “land titling”, as a process that brings the invisible capital (i.e: extra-legal- informal holding of land) to make the capitalistic economy work effectively. Many of our thinkers and scholars also share this belief that the “Land Titling” process holds "promise for societies” such as India for reform, thereby reaping its benefits. It is estimated that this reform can enable our GDP to increase by 2 percent or so, along with its added multiplier effect.

No doubt, every housing and infrastructure developer involved in the transaction of land will cheer any improvement in the current system. The Government has rightfully taken up initiatives related to improvements to land records and monetization of land on mission mode across the country. This is through a set of pilots and full-scale programme involving survey and digitization of land records ( #ULM, #UPOR, and #NLMC) minus the questionable comprehensive reform suggested by Soto.??

Land ownership and the property rights attached to land is dictated by the “ Title”. The title refers to the bundle of rights conferred to the specific land that often includes possession, development, and its usage. The ownership of property and its use by private persons is a constitutional right and it can be taken away only for public purposes after suitable compensation. Planning bodies and authorities regulate the rights of the landowners and the land use through zoning codes.

There are broadly two systems in terms of titling - Conclusive and Presumptive system. These are determined by the extant legislation of the state in guaranteeing the rights. If the State guarantees the " title ", then it would be conclusive. Australia for example follows this system, known as the Torrens system.

On the other hand, the state may follow a fiscal system such as maintenance of tax records as against the record of "titles" or guaranteeing them.

Currently, in India, the title to land comes about through a set of documents. The Land titles for both urban and rural (agricultural) land are established through a presumptive method that depends on a set of documents, the methods often being obsolete and anachronic. There is always a chance for contestation leading to legal wrangles due to the lack of documents or discrepancies therein. Indian courts are flooded with cases pertaining to disputes related to land and its title. One can estimate that over 60 % of Civil cases can be attributed to this issue.

As the titles are not conclusive, extensive documentation is an absolute requirement. The inheritance rights of the land, the rights of women, endowment land rights, reservation of land for SC/ST, joint families, etc further complicate matters.

It is a common practice for every law firm to have developed a standard checklist of documents for documentation and thereafter provide an “Opinion “. The historical record sought may be of varying age such as 30 years or 60 years or even 100 years.

About 25 documents for agricultural land and 10 documents for urban land/buildings are sought in such checklists. The scrutiny of each document is a specialized task for the legal team with huge experience.

Type of documents and sources

While primary ownership documents are usually registered with the department as public records, the corresponding details of the owner must reflect in the mutation register (MR) and corresponding changes in the Encumbrance certificates (EC). Karnataka for example offers the EC through an online method and is easy to obtain, though the contents are subject to the extract of what is contained in the original document.

The erstwhile land surveys are in the form of village survey maps and survey sketches in paper format measured through chain survey methods. These are often constrained by the lack of accuracy and precision, with the need of human intervention and some adjustments to be called as “final” documents.

The actual extent and the geometry of the parcel can be determined by the Atlas, Hissa Tippani and Akarband sketches. The Hadbast survey carried out by the department for the extent, schedule and the area, including the location of kharab, is also a must. The Kharab land is non productive portion of the land that is not assessed for the taxation such as cart tracks, rocky crops, footpath, drains ,etc. These lands are actually the “commons” and the revenue department has a claim over them.

Tax or Fiscal documents include the Khata and relevant forms such as the Right Tenancy Certificate ( RTC).These provide a record of the taxes paid during a given period along with the name of the person remitting it. The local taxation for the land and property is by the local authority such as Grama Panchayats, CMC, TMC and City Corporations.

Non-Agricultural use

The conversion of land from Agricultural Land to Non-agricultural land is a process known as the alienation of land. Across the country, there are land laws that prohibit the transfer of agricultural land and holding of the land capped to the size and class of persons that can hold it. ?

In agricultural lands, it is observed that the waterways, irrigation canals, and Paths cutting across the fields were developed over a period of time often over centuries to serve efficient access, as easements and irrigation. ?These were usually managed and operated by the community for the sustenance of agriculture.

On the contrary, the urban areas which comprise housing and infrastructure are planned and developed on the logic of maximizing the built-up space and often ignore the environmental value of such commons. Fusing the “commons” within the development requires a delicate balance of preserving the valuable portions and adapting the rest to current needs through Urban design/planning.

A good digital record of the historical document without necessary updation can also cause difficulties. For example such as the land on which the squatter settlement has been over a couple of decades can become extra-legal and considered as encroachment as the historical record may hold information contrary to the ground situation. Many of the lands taken for acquisition at some point is abandoned and records still reflect the condition that acquisition is underway. ?

Often the land held by Government Departments are considered good as there is some kind of perceived "cleanliness" and sanctity. However historically, earlier efforts to monetise the land have faced difficulties due to the clarity of titles and issues such as encroachments that have never been resolved fully.

Extra-legal property occurs as Encroachments, illegal occupation and informal holding or whenever there is a contestation. Such extra-legal incursions often occur with the tacit approval and support of the political and administrative machinery.?

Monetisation of Land:

Disinvestment process usually throws up the lack of documentation and poor titles regularly. Privatisation of public assets and monetisation of land held by the Government has never been easy due to this problem. Given the hard work required by the institutions to build records and the lack of political interest as evictions, etc make it further difficult.

Only a set of investors of certain repute can enter into these land transactions. Schemes such as Slum Rehabilitation through PPP etc are also ways of living with the encroachments and legalisation of the housing tenures.

The defence is the largest land owner, followed by the Railways and other Public Sector bodies both central and state government. The land component itself exceeds unbelievably over 13,505 square kms held by 41 of the 51 Union ministries and 22 of over 300 public sector enterprises. At least a portion of this land holding is prime for monetisation.?

The moot question is, can such process be continued given the need the bulk of government land is to be privatized and monetised in the coming years? How can competition be enhanced and thereby realize full value from such a process?

Shouldn’t a separate piece of legislation be drawn up regarding the Government land guaranteeing Title” thereby protecting larger public interests?

After all the land that is to be privatized belongs to this country, its people and is the most valuable strategic resource for smart urbanization.?