After its sweeping labour law changes—the Centre is also trying to push through similar legislation in Parliament—and laws to make land acquisition easier, Rajasthan has taken a big step forward with its assembly passing a land titling Bill earlier this week. Right now, as in the rest of the country, all ownership is ‘presumed’. So, if A sells her property to B and the deal is registered and the appropriate stamp duty paid on it, it is not considered proof of ownership, it is merely treated as proof that a transaction took place between A and B —so, if C successfully contests the ownership of the property, there is no one to compensate B for the money invested. Indeed, even regular payment of property tax is not considered proof of ownership of property—several states even state this upfront.
Naturally, what this does is to reduce property transactions since buyers are wary the title can be contested. Under property titling of the sort Rajasthan now promises to give, once B buys A’s property—even if C comes and successfully challenges the title, the Rajasthan government will compensate B for the payment made. Guaranteeing title is not easy, but the government’s reason for doing this is that investors in the state will breathe easier and, if the titling work is done properly, the number of cases where compensation needs to be paid will be kept to a minimum—to the extent compensation has to be paid, it will be more than outweighed by the boost to the ease of doing business.
Though no state has come up with a way to guarantee title, the central government is already working on ways to do this—a Land Titling Authority along the lines of UIDAI would be the ideal way to do this but it is not clear if this is being planned—and there are some models being worked on which Rajasthan will probably adopt. Most states have already computerised their land records and have placed them on their websites—with this already done, the next logical step is to get the data verified by teams of lawyers and possibly to invite challenges to the title. If the authentication/challenge work is outsourced, getting a database on unchallenged titles would become a lot easier.
Those properties for which there is a challenge can be put under a different pool and perhaps be investigated further, giving both the possessor of the property and the challenger an equal opportunity to prove their case. And thanks to geo-tagging, each property can be uniquely identified. How long the process of guaranteeing title will take is not clear, but along with its other changes—including a law on land pooling—Rajasthan is clearly emerging as India’s fastest reforming state.