the housing sector, the robust policies of the past few
years paid off and there is a construction boom. Impressive
work has been done in laying roads, and over 7000 km of
highways are expected to be completed ahead of schedule,
a new experience in a country plagued by perpetual delays!
area for sensible policy initiatives is land ownership.
If land titles are clear, and the poor and marginalized
sections can be secure in ownership, a lot of capital will
be unlocked, credit will be accessible and economic activity
will be generated. Most poor people have no clear titles
to valuable land in our cities and even small towns and
villages. The work of the Peruvian economist Hernando de
Soto clearly established how the poor are denied precious
capital for want of land titles. Real estate prices are
skyrocketing even as vast tracts of urban land are locked
up because of needless regulation or for want of clear titles.
governments at the Union and State levels can initiate four
important steps to redress this situation. First, updating
of land records. In most states, land surveys have not been
conducted after the British left. Land records are outdated.
Computerization of existing records will only improve data
storage and retrieval, but is no substitute to clear titles.
Many people are cheated in land purchases, and many occupants
of vacant land have no titles. Often government land is
sold to unsuspecting buyers, and the state even registers
such sale deeds after collecting hefty stamp duty. Later
the purchasers are denied ownership rights, and they are
in perpetual fear of eviction. This is a shameful state
of affairs for any government which claims to be civilized.
The first duty of the state is to ensure clear and unambiguous
titles to land. It is high time all lands, particularly
in urban areas are resurveyed, and titles are clearly established.
Wherever government land is under the occupation of the
poor, there titles need to be regularized subject to zoning
laws. If people purchased government lands through registered
sale deeds, the state has the obligation to recognize the
titles by collecting a small fee. The state which could
not protect people from fraud despite collecting stamp duty
has no right to penalize innocent citizens.
high and varying rates of stamp duty for property transfer
have dampened construction and pushed much of the economic
activity underground. With stamp duty and other taxes approaching
15%, almost no body declares the real market value of land.
Sometimes sale deeds are not even registered, and buyers
have nightmares of losing the property. It is high time
we had uniform and low stamp duties to bring land-related
activity overground. The state will actually gain in terms
of revenues in the long run, and the citizen can be secure.
urban land ceiling laws have still not been repealed in
many states, though the Union law has been repealed. It
has been clearly established that urban land ceilings only
increased corruption, locked up vast tracts of land, created
artificial scarcity and drove up land prices and made housing
unaffordable except to the very rich. And yet, our politicians
and babus pretend that they are serving the interests of
poor! All states need to be persuaded to repeal urban ceiling
laws. There is no scarcity of residential land even in India.
All you need is to repeal ceiling laws, and build roads
in vacant lands. Vast tracts will be opened up for housing.
rent control laws have inhibited construction and economic
activity. Mafias are taking over real estate precisely because
honest entrepreneurship is made impossible. The fate of
Delhi Rent Control Act, which could not be notified or implemented
despite enactment of the law seven years ago is a testimony
to the power of vested interests. If the Parliament and
government have no concern for the laws enacted, all governance
becomes a sham. We need to repeal all rent control laws
to encourage fair competition and true entrepreneurship.
is a lot the state can, and should, do to promote growth
and investment. Sometimes better regulation at low cost
can yield greater dividends than vast expenditure and grand
gestures which remain on paper.