Land ownership in India:
In India, land ownership is primarily established through a registered sale deed (a record of the property transaction between the buyer and seller). Other documents used to establish ownership include the record of rights (document with details of the property), property tax receipts, and survey documents. However, these documents are not a government guaranteed title to the property, but only a record of the transfer of property. During such transactions, the onus of checking past ownership records of a property is on the buyer. Therefore, land ownership in India, as determined by such sale deeds, is presumptive in nature, and subject to challenge.
Land records are poorly maintained; they do not reflect the on ground position
- Land records consist of various types of information (property maps, sale deeds) and are maintained across different departments at the district or village level. These departments work in silos, and the data across departments is not updated properly. Hence, discrepancies are often noted in land records. In the past, surveys to update land records have not been undertaken or completed, and maps have not been used to establish actual property boundaries on the ground.
- Therefore, in several records, the property documents do not match the position on the ground.
- Poor land records also affect future property transactions. It becomes difficult and cumbersome to access land records when data is spread across departments and has not been updated. One has to go back several years of documents, including manual records, to find any ownership claims on a piece of property. Such a process is inefficient and causes time delays.
Policy responses have addressed modernisation and digitisation of land records:
- In order to improve the quality of land records, and make them more accessible, the central government implemented the National Land Records Modernization Programme (now Digital India Land Records Modernization Programme). It seeks to achieve complete
computerisation of the property registration process and digitisation of all land records.
- However, the pace of modernisation of records and bringing them to an online platform has been slow.
Moving to a system of state guaranteed titles will be challenging:
- To address issues with land records, a move towards conclusive titling has been proposed. In a conclusive titling system, the government provides guaranteed titles, and compensation in case of any ownership disputes. Achieving this will require shifting to a system of registered property titles (as opposed to sale deeds) as the primary evidence of ownership, and having clear and
updated land records.
- However, adopting a conclusive system of titling will require undertaking several measures. All existing land records will have to be updated to ensure that they are free of any encumbrances. Information on land records, which is currently spread across multiple departments, will have to be consolidated. Further, several changes in existing laws that govern registration and transfer of land, and institutional changes in maintenance of land records will also have to be done.
THE NEED FOR CLEAR LAND TITLES
- A World Bank study from 2007 states that some estimates suggest that land-related disputes account for two-thirds of all pending court cases in the country.
- These land disputes include those related to the validity of land titles and records, and rightful ownership. A NITI Aayog paper suggests that land disputes on average take about 20 years to be resolved.
- Land disputes add to the burden of the courts, tie up land in litigation, and further impact sectors and projects that are dependent on these disputed land titles.
- Land is often used as collateral for obtaining loans by farmers. It has been observed that disputed or unclear land titles inhibit supply of capital and credit for agriculture.
- Small and marginal farmers, who account for more than half of the total land holdings, and may not hold formal land titles, are unable to access institutionalised credit.
Development of new infrastructure:
- Over the last few decades, the economy of the country has seen a shift from being agrarian based to becoming manufacturing and services based.
- This has necessitated the development of infrastructure, and a shift in land use from agriculture to commercial, industrial, and residential.
- Land that was earlier used for farming, is now being used to set up industries, power plants, manufacturing units, build roads, housing, and shopping malls.
Urbanisation and the housing shortage:
- More recently, land use is also changing due to urbanisation and further expansion of such urban areas.
- While census towns are places with urban characteristics (population above 5,000, at least 75% of the population engaged in non-agricultural work, and a population density of at least 400 people per sq. km.), statutory towns are urban areas with a local authority.
- The scarcity of affordable housing in urban areas drives the urban poor to live in slums or unauthorised colonies.
- Under new schemes for urban development (Smart Cities Mission, AMRUT), cities are trying to raise their own revenue through property taxes and land based financing. This further necessitates the importance of providing a system of clear land titles in urban areas.
- A benami transaction is one where a property is held by or transferred to a person, but has been provided for or paid by
another person. The White Paper on Black Money (2012) had noted that black money generated in the country gets invested in benami properties. Unclear titles and non-updated land records enable carrying out property transactions in a non-transparent way.
- The Standing Committee on Finance (2015) examining the Benami Transactions Prohibition (Amendment) Bill, 2015 noted that generation of black money through benami transactions could be pre-empted and eliminated by digitisation of land records and their regular updation.
WHY ARE LAND TITLES IN INDIA UNCLEAR?
- As discussed above, poor or unclear land records can have wide-reaching impact across sectors.
- The system of land records was inherited from the zamindari system, the legal framework in India does not provide for guaranteed ownership, and the manner in which information pertaining to land records is collected and maintained further exacerbates the gaps in these records.
- The current system of land records was inherited from the pre-independence days (zamindari system), and has not changed much since then.
- Under the Registration Act, 1908, registration of property is not mandatory for all transactions. These include acquisition of land by the government, court decrees, land orders, heirship partitions, and property that is leased for less than one year.
- While registering a property transaction, the buyer has to pay a registration fee along with stamp duty. The rates of registration and stamp duties vary across states. India used to have among the highest rates of stamp duty in the world.
- Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), one of the mandatory state level reforms was to rationalise stamp duty and bring it down to less than 5% by 2018.21 Following this some states have reduced their stamp duties. For example, stamp duty in Delhi and Mumbai is 6% and 5%, respectively. The Standing Committee on Commerce on Ease of Doing Business (2015) had recommended that stamp duty should be reduced to 2%.
- Land administration essentially involves recording, processing and dissemination of information about the ownership, value, and use of land. The system of land records management varies across states, depending on factors such as historical evolution and local traditions. Broadly, such information can be classified as details of the property (such as tax documents, rental documents), spatial records (such as maps, boundary limits), and transaction records (registered sale deeds).
The Torrens System of land titling was originally established in Australia in 1858, and was later adopted by other countries including England, Ireland, Malaysia, Singapore, and Canada. The Torrens system is a method of recording and registering land ownership, and is often used as an example for conclusive titling. Under the Torrens system, the state provides guaranteed titles to all property owners. The system works on three principles:
1. The land titles register accurately, and completely reflect the current ownership and rights of a person in a particular piece of land.
2. Ownership and other interests do not have to be proved by documents such as title deeds.
3. Government guarantee provides for compensation to a person who suffers loss of land.
The Torrens system has created a central registry where all transfers of land are recorded in one register, thereby producing a single title with a unique number that also records easements, mortgages, and discharges of mortgages. Several committees have referred to the Torrens System as an example when suggesting moving to the conclusive titling system. In India, Rajasthan passed a law in 2016 that seeks to provide state guaranteed land titles in urban areas.
The central government’s scheme on modernisation of land records (Digital India Land Records Modernisation Programme, (or DILRMP) also seeks to create a system that will help move towards conclusive titling. The FSRC had also recommended providing reasonable rules to allocate the liability for any loss or damage caused by an error in the administration of the registration and record search system.
CHALLENGES TO ESTABLISHING CLEAR LAND TITLES
Several committees have suggested that moving to a conclusive titling system will help address the issues around unclear land titles. The Ministry of Rural Development has undertaken a land records digitisation and modernisation scheme, the National Land Records Modernisation Programme (NLRMP) which seeks to move to a conclusive system of titles. While moving to a conclusive land
titling system is desirable, it poses several challenges.
- Firstly, it would require ensuring that all existing land records are accurate and free of any encumbrances. Currently, land records are incomplete, inaccurate and do not reflect the position on ground. Cross checking all these records against all past transactions, and with the existing position of ground would be time consuming, and resource intensive process.
- Secondly, it would require that all information around land is available through a single window. Currently, land records are dispersed across various departments. Changes in land records in one department are not always reflected in the records in the other departments. Integration of information across departments would require integrating such information, updating these records, and ensuring that the information across the departments matches. It would also require creating systems where any new information is recorded and updated through a single window, and that gets reflected across all the departments. Note that in municipal areas, some property related data is also stored in other departments such as electricity, and water supply. These would also need to reflect the updated property information.
- Thirdly, with regard to the legal framework, land, registration of documents, and contracts are regulated across both centre and states. Moving to conclusive titling would require amending these central and state laws, and creating a unified legal framework that provides for government guaranteed land ownership.
REFORMS UNDERTAKEN TO IMPROVE THE SYSTEM OF LAND RECORDS
In the last three decades, in an attempt to improve the quality of land records, and make them more accessible, the central government has implemented various schemes for the modernisation of land records. Around 1988-89, the central government started the Computerisation of Land Records scheme to computerise all land records. Other schemes to improve land records and administration
that were introduced around the same time were the Strengthening of Revenue Administration and the Updating of Land Records schemes. In 2008, all these schemes were merged into a centrally sponsored scheme, the National Land Records Modernization Programme (NLRMP).
The scheme has now been renamed as the Digital India Land Records Modernization Programme (DILRMP) and is a part of the Digital India initiative. The scheme was changed into a Central Sector Scheme in April 2016. With this change, the scheme will now be implemented by the central government with 100% of the grants coming from the centre. Between 2009 and 2016, about Rs 946 crore was sanctioned by the central government under NLRMP, of which Rs 412 crore was released.
The major components of NLRMP/DILRMP are the following:
- (i) computerisation of all existing land records including mutations (or transfers);
- (ii) digitization of maps, and integration of textual and spatial data;
- (iii)survey/ re-survey, and updating of all survey and settlement records including creation of original
cadastral records (record of the area, ownership and value of land) wherever necessary;
- (iv) computerisation of registration and its integration with the land records maintenance system; and
- (v) development of core Geospatial Information System (GIS) and capacity building.
NLRMP (now DILRMP) intends to eventually move from the existing system of presumptive titles to conclusive and state guaranteed titles. The conclusive title system is based on four basic principles:
- (i) A single window system for land records which will provide for the maintenance and updating of textual records, maps, survey and settlement operations and registration of immovable property.
- (ii) The cadastral records reflect all the significant and factual details of the property titles.
- (iii)The record of title is a true depiction of the ownership status, mutation is automatic following registration, and the reference to past records is not necessary.
- (iv) Title insurance, which means that the government guarantees the title for its correctness, and will
compensate the title holder against losses arising due to defects in the title.
- While conclusive titling has been suggested as the solution to solve the problem around land records in India, several steps need to be completed before the government starts giving out guaranteed land titles. These steps include: (i) amending laws across centre and states, (ii) administrative changes at the state level that streamline the collection and maintenance of land data, and (iii) ensuring that all data is regularly updated and easily accessible (on a digital platform).
- DILRMP has so far been focusing on the last aspect of digitising and updating of records. Further, the programme’s progress has been slow. Processes such as surveys and re-surveys, which would help update the spatial records have been going on at a slow pace due to the huge volume of records.
- Recently, Rajasthan started the process of giving guaranteed land titles in urban areas by introducing the Rajasthan Urban Land (Certification of Titles) Act, 2016. However, it remains to be seen how successful the new law is in providing people with guaranteed property titles.
Source: PRS India