The Land Titling Bill, 2010, the proposed legislation drafted to guarantee property titles, will be a major milestone in securing property rights and will boost credit flows and investments. More importantly, the legislation will help improve the efficiency of not only the land markets but also of related ones like labour, credit and housing, boosting overall growth.
The current system of land records is a major stumbling block in conducting smooth land transactions as it only confers presumptive property titles, without certification of the title by the state. Even the registration of a deed does not confer full entitlement, as the Registration Act provides for the registration of the document but not the title. Though the pitfalls from the poor quality land records were pointed out time and again, there were no major initiatives to update and rectify them. This was because land is a state subject and the governments have no incentive to mobilise resources to improve the record-keeping, as the share of land revenue in total state taxes has dwindled sharply over the years.
Half-hearted measures implemented by some of the states have had no significant impact, especially since the quality of land records differ substantially across the country. At the time of the first Plan, it was noted that village records on land holding hardly existed in states like West Bengal, Bihar, Orissa and Rajasthan. In most other areas, the records were maintained by the zamindars and their petty employees and these were widely misused to encroach on community lands. In the later years, states like West Bengal improved land records as part of their programme to confer cultivation rights on tenant farmers. Some states like Karnataka and Kerala have been fairly successful in computerising a major part of their land records.
The first major casualty of the non-availability of up-to-date land records in independent India was the land reforms programme. Lack of accurate information on the size of land holdings hindered efforts to assess the availability of surplus land or to identify them. Later, the efforts to boost investment in agriculture were also hit by the absence of proper land titles. Banks found it difficult to extend term loans to farmers who had no proper titles, even when they were in possession of the land. Now, there is a bigger problem with large-scale land acquisitions for construction of infrastructure and utility facilities. Households with no clear titles stand to gain very little from compensation packages and hence are usually the first to protest.
The adoption of the Land Titling Bill will help set up a conclusive property titling system with title guarantee. It will also ensure indemnification against losses due to inaccuracies in property titles and usher in the Torrens system of land records, which is widely used in countries like the US, the UK, Canada, Switzerland, Singapore and Malaysia. The model law drawn up for this seeks to empower the state governments to set up a land titling authority. The authority will frame regulations, prepare, maintain and update the register of titles, disputes, charges and covenants and index of maps; assign a unique property identification number to each piece of immovable property in the notified area; undertake property valuation and ensure that the facilities of auto-calculation of due stamp duty, registration fees and other applicable levies or fees; issue copies; and provide extracts of its records upon request.
The land titling authority will have the same powers as are vested in a civil court and no civil court shall have jurisdiction to entertain any dispute relating to an immovable property with respect to which the authority is empowered under this Act. And even if any appeal is filed against the order of the authority before the land titling tribunal or a high court or the Supreme Court, the provisional title shall be deemed to be conclusive and indefeasible only after the final disposal of such an appeal.
But the passing of this legislation for introducing the Torrens system by the states is only the first step. There are others, too. The most difficult of them will be the task of merging the different agencies that handle property records to one single agency (the land titling authority). Currently, the revenue department maintains records, the survey & settlement department prepares maps and the registration department verifies.
The task is humongous, given that the 140 million landowners in the rural sector alone have more than 430 million records. But reform must be done.
p.raghavan@expressindia.com