Context

• India’s land governance system is deeply entangled in a complex network of legal, institutional, and administrative challenges that have hampered the country’s economic and social development.
• As highlighted in the Economic Survey 2023-24, these challenges are barriers to achieving multiple developmental goals.
• While the 2024 Budget proposed technological solutions to modernise India’s land administration, such initiatives do not address the deeply rooted legal and institutional barriers that hinder effective land governance.

An Analysis of Barriers in Land Governance

• Unclear Land Titles and Insecure Tenure
  • One of the most significant issues in India’s land governance is the lack of clear and secure land titles.
  • Ownership of land in India is often ambiguous due to outdated records, poor maintenance of land registries, and overlapping claims.
  • This problem is especially prevalent in rural areas where the majority of landholdings are informal and not officially registered.
  • Farmers and landowners cannot confidently invest in long-term improvements on their land, as they lack formal proof of ownership.
  • Ambiguous ownership frequently leads to land disputes, which clog the judicial system.
• Fragmented and Conflicting Legal Framework
  • India’s land governance is subject to a myriad of conflicting laws that vary across states and regions, adding to the complexity and inefficiency of the system.
  • These laws regulate land ownership, transfers, leasing, and land use in ways that are often contradictory or overlapping.
  • Several laws impose restrictions on the transfer of land, especially agricultural land.
  • In many states, only certain individuals or groups can purchase agricultural land, and transfers are subject to rigid regulations that differ from one state to another.
• Fragmentation of Land Holdings
  • Land fragmentation is one of the most pressing challenges in India’s agricultural sector.
  • Over time, as land is passed down through generations, it is divided into smaller and smaller parcels.
  • Small landholdings prevent farmers from benefiting from economies of scale, as they lack the resources to invest in modern machinery, advanced irrigation techniques, or high-quality seeds.
• Gender Inequality in Land Ownership
  • Despite several legal provisions that aim to improve women’s access to land ownership, gender inequality remains a pervasive issue in India’s land governance.
  • Women, especially in rural areas, are often denied their rightful share of property due to social norms, patriarchal traditions, and legal loopholes.
  • While legal reforms such as the Hindu Succession Act have been introduced to grant women equal inheritance rights, in practice, women are often pressured to forgo their claims to family property in favour of their male relatives.
• Land Use Restrictions and Regulatory Barriers
  • Many laws in India impose restrictions on how land can be used, particularly in the agricultural sector.
  • These land use regulations are often rigid and outdated, preventing landowners from converting their land for more economically viable purposes.
  • For instance, land that is designated for agricultural use cannot easily be converted for industrial or commercial purposes, even if such a conversion would lead to higher economic returns.
  • These regulations also limit leasing opportunities, thereby stifling investment in the land.

Proposed Reforms: Digitisation and Its Limitations

• Proposed Reforms
  • To address some of these challenges, the 2024 Budget proposed several digitisation initiatives, including the digitisation of land records, the creation of land registries, and the assignment of unique identification numbers to land parcels.
  • Additionally, efforts to integrate land records with digital platforms such as Agri Stack have been suggested to streamline land administration.
  • While these reforms could modernise the way India manages its land records, they fall short of addressing the root causes of land-related problems, which are legal and institutional in nature.
• Limitations of Digitisation
  • The uncertainty surrounding land ownership and insecure property titles are not solely due to the paper-based nature of land records but stem from conflicting laws and administrative procedures.
  • For example, digitising urban land records may not necessarily lead to improved land ownership or access to formal credit, as long as the underlying legal framework remains convoluted and restrictive.
  • A digitised system cannot overcome the risks associated with land transactions, which remain subject to numerous laws restricting land transfers, leasing, and use.
  • The persistence of legal ambiguity, particularly in the context of agricultural land leasing, further undermines the effectiveness of digitization efforts.

The Real Solution to India’s Complex Land Governance System

• Legal Recognition of Land Titles
  • A central component of reform must be the establishment of a legally recognised and enforceable system of land titles.
  • This involves creating a unified framework that provides a clear and indisputable record of ownership.
  • The current system, in which ownership is often based on possession rather than formal title, needs to be replaced with one that provides individuals and businesses with secure and transferable property rights.
• Guaranteed Tenure Security
  • Strengthening tenure security is crucial for encouraging investment in land.
  • Farmers, in particular, need assurance that they will not lose their land to expropriation or disputes, which will enable them to make long-term investments in agricultural productivity.
  • Clear property rights are also necessary to give landowners access to formal credit, as banks are more willing to offer loans when the collateral is secured by legally recognized titles.
• Liberalising Land Transfers
  • Many state laws impose unnecessary restrictions on the sale and purchase of agricultural land, such as limiting who can buy or sell land and restricting the use of land for non-agricultural purposes.
  • These restrictions hinder the transfer of land to more efficient users, stifle investment, and discourage land consolidation.
  • Legal reforms should aim to remove such restrictions while ensuring that land transfers are transparent, equitable, and subject to fair compensation.
• Reforming Land Leasing Laws
  • In many states, land leasing is either prohibited or heavily regulated.
  • This creates a barrier to the efficient use of land, as owners who are unable or unwilling to farm their land cannot legally lease it to more capable or interested farmers.
  • Reforming these leasing laws to allow for more flexible and transparent leasing arrangements would not only increase agricultural productivity but also provide a livelihood option for landless farmers and rural workers.
• Simplifying Consolidation Procedures
  • The legal and administrative barriers to land consolidation need to be removed.
  • This could involve simplifying the process for merging small and fragmented parcels of land into larger, more economically viable holdings.
  • Legal frameworks should encourage voluntary land consolidation, offering incentives to landowners who choose to merge their parcels for more productive use.
• Supporting Collective Farming Models
  • Another avenue for land consolidation is through collective farming models, where multiple small farmers pool their resources and land to achieve economies of scale.
  • Legal reforms could promote such models by providing clear guidelines for land pooling and collective management, ensuring that farmers retain their ownership rights while benefiting from joint production.

Conclusion

• While digitisation can assist in modernising land administration, it is only one piece of the puzzle.
• Without addressing the complex web of conflicting laws, regulatory restrictions, and administrative inefficiencies, India will not be able to fully unlock the potential of its land resources for economic development and social equity.
• True progress will only be achieved through a combination of legal reforms and technological advancements, paving the way for a more inclusive and productive land governance system.