In the absence of such a survey to clearly delineate boundaries and establish titles, there is no easy way for an ordinary citizen to verify the authenticity of the property title that s/he is purchasing. Computerization of existing land records will only help with data storage and retrieval, but does not guarantee the authenticity of a title.

The state government charges a very steep registration fee to officially record the transaction between two parties, but claims that it is not responsible for ensuring the authenticity of the property title! It is a shameful state of affairs and is a complete abdication of the state's duties. In a modern democratic society, if there is no sanctity for private property rights, why will anyone invest in such an economy and how can you have growth?

Let us look at two other issues relating to land policies, which are severely curbing the growth potential of the state and inhibiting private investment. One of them is the Urban Land Ceiling Act known by its acronym ULC. After the repeal of the land ceiling act by the union government, most of the states followed suit excepting for a few like AP and Maharashtra. This Act, introduced some 25 years ago was originally intended to serve as an instrument for redistribution of surplus land for the needy urban poor. Instead it has ended up as a powerful weapon of pelf and patronage and led to tremendous political and bureaucratic corruption. Most of the urban properties got tied up in legal tangles, which in turn led to an artificial land scarcity and rise in urban land prices. It also led to the rise of urban mafia and criminalization, which affected every facet of urban life. The cost of administering ULC Act is greater than the value of land acquired for the poor, and the volume of corruption is several times more! We should call for an immediate repeal of the land ceiling act, which succeeded only in locking up vast tracts of land and making housing prohibitively expensive for the average family.

The other critical issue is the outrageously high registration tax (stamp duties). Stamp duties and other taxes approaching 15 %, have severely dampened the construction activity and forced the industry to resort to under-reporting of the true value, which in turn led to massive corruption. The high and varied stamp duties also contributed to the uncontrolled rise in housing prices and inhibited the natural growth of this essential sector. The sensible thing to do would be to reduce the stamp duties to a reasonable and uniform level, which will not only bring most of the construction activity above ground, but will also augment the states revenues significantly.

The state should take immediate steps on all the three fronts i.e. survey of all lands, repeal of the land ceiling act and rationalization of stamp duties. There is never real scarcity for housing. All we need is to build roads with sensible planning and open up vast tracts for construction activity. The state has a fundamental duty to protect property rights and to ensure fair and transparent policies for promotion of genuine economic activity, and affordable housing for the poor and middle classes.

 

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