Perhaps the two least reformed sectors of the Indian economy are its labour and land markets. They are also two of the biggest impediments in achieving double-digit growth. And while reform of labour laws unfortunately continues to remain off the agenda of the UPA government, there may finally be some creative thinking on making land markets more efficient. The department of land resources in the ministry of rural development has come up with a draft legislation?Land Titling Bill, 2010?that would create a new register of titles, give every parcel of land a unique number and record ownership and other details with clarity. The fact that the outcome of this exercise will be endorsed by the state will give people conclusive ownership rights. At the moment, countless land disputes find their way to courts and carry on for years without resolution, at considerable cost to the parties involved and the economy. That bottleneck will hopefully be relieved with this new legislation. Of course, there is a big catch in getting this reform through?since land is a state subject, all states will have to be brought on board. As we know from experience in other reform measures, this is often hard to achieve quickly. But the Centre must make every effort, given the huge benefits such reform will yield. Industry may finally be able to acquire land more easily and without contentious intervention by the state. The poor and landless will get a point of access to the formal market economy. And various land mafias are likely to be directly hit, and with time marginalised.
Of course, this is only one dimension of the bigger land problem in India. Even with a better titling regime, there needs to be a satisfactory regime for resettlement, rehabilitation and appropriate compensation. The draft Bill, which was supposed to address this satisfactorily, has been put in cold storage courtesy Mamata Banerjee?s opposition. The government must find a way to expedite this. The government must also find ways to ease its own ownership and control over vast tracts of land across the country. There is absolutely no reason for the government to be such a significant land holder in a capitalist economy. Much of the land owned by the government is wasted in any case, without serving any productive purpose. Letting it out for productive utilisation would be the sensible way for the government to proceed. When all that is done, comprehensive reform of land markets in India will be achieved.
