Without grabbing headlines, the government since the last four years is putting in place a regime that is in line with the international development discourse. Providing rural families with titles for their homes and land is a sort of move that has been considerably influenced by Peruvian economist Hernando de Soto’s book Mystery of Capital — published 25 years ago — which persuasively argued that providing the world’s poor with titles to their land and homes would enable them to borrow money to improve their homesteads and start small businesses and unlock $9.3 trillion of assets which hitherto were languishing as “dead capital” under the shadow of law. This scheme pertains to PM Svamitva (Survey of Villages Abadi and Mapping with Improvised Technology in Village Areas) Yojana that is mapping property parcels using drone technology and providing digital property cards to people for the first time. Indications are that the scheme has reached critical mass: The government may provide titles to 40 million rural families in 346,000 villages across 31 states and Union Territories by the end of the next fiscal.
Obviously, it is a tad premature to gauge its overall impact, but the anecdotal evidence does indicate the potentially game-changing possibilities of PM Svamitva Yojana. Last month, when the Prime Minister interacted with some Svamitva beneficiaries in Madhya Pradesh, Maharashtra, Rajasthan, Odisha, and Jammu and Kashmir the overall feedback was positive as they highlighted how the scheme has transformed their lives as they raised mortgages to improve their farms with irrigation facilities or start small businesses. For instance, one beneficiary from Rajasthan related how her family was living in a small house for 20 years without documents. But now with the digital property card, she raised a loan of `7.45 lakh from a bank to start a shop. That income is now helping with her daughter’s higher education. Key states that have generated digital property cards include Uttar Pradesh (10.1 million), Madhya Pradesh (3.9 million), Haryana (2.5 million), Gujarat (1.2 million), and Karnataka (100,000). When all the six lakh-plus villages are covered, it will unlock over `132 lakh crore of property value which earlier was “dead capital’.
No doubt asset monetisation on this scale is bound to have multiplier effects on economic activity in the countryside, besides contributing to decentralised development. Gram Panchayats’ financial position will become much stronger with revenue from property taxes. Digital property cards will also help properly compensate victims of natural disasters like floods and landslides. While all of this is the good news, it is important to bear in mind that providing property titles per se is far from a magic bullet for poverty reduction as has been made out in the international development discourse. The poor do not have property but only their labour to sell. Look no further than the failed promise of the microfinance movement that was also touted as a surefire means to reduce poverty. Ironically, de Soto’s influential thinking has had mixed success in Peru. Slum-dwellers with titles to their unregistered homes did not head straight to the bank in large numbers to take loans according to a former UN Special Rapporteur on the Right to Housing who was quoted by Reuters. Nevertheless, there is a warrant to also extend PM Svamitva Yojana to urban India as many people there lack proper documents for their homes and unregistered businesses.