Opinion | Modernizing land records in India

The Digital India Land Records Modernisation Programme (DILRMP)—the erstwhile National Land Records Modernisation Programme—seeks to improve the quality of land records in the country, make them more accessible, and move towards government-guaranteed titles.

A land title is a document that helps determine land ownership. This will be achieved through complete computerization of the property registration process and digitization of all land records. The scheme completed a decade in operation in August this year.

The DILRMP is being implemented across all states with differential progress. As of August, while two states (Karnataka and Odisha) and three Union territories have completed 100% computerization of land records, four states are yet to start the process. The remaining states have computerized between 80-90% of the records. Nineteen states/Union territories have started issuing digitally-signed record of rights (RoRs), a record that shows how rights on land are derived for the land owner, and records the property’s transactions from time to time. These states have also started linking RoRs to cadastral maps (a record of the area, ownership and value of land). Out of these, three states (Goa, Odisha and Tripura) have almost completed this process.

However, progress on some other components of the scheme has been slow. As of August, computerization of land records has been completed in 87% of the villages. However, mutation (transfer of ownership) records have been computerized in only 50% of the villages. Further, only about 21% of the villages have started real time updating of RoR and maps. This suggests that, while records have been digitized, they may not be up to date.

Maps form an important component of land records as they provide data on property boundaries and details on the exact limits of ownership. However, only about 48% of the cadastral maps have been digitized so far. Spatial data has been verified in just 45% of the villages and survey and re-survey work, which helps update spatial records, has been carried out in only 9% of the villages.

While the scheme so far has looked at the digitization of land records, it has not addressed issues around land ownership. It is well known that land records in India are unclear and do not guarantee ownership. Such unclear land titles are there because of a variety of reasons, some of which are discussed below.

First, in India, we have a system of registered sale deeds and not land titles. The Transfer of Property Act, 1882, provides that the right to an immovable property (or land) can be transferred or sold only by a registered document. These documents are registered under the Registration Act, 1908. Therefore, the transaction gets registered, and not the land title. This implies that even bona fide property transactions may not always guarantee ownership, as earlier transactions could be challenged.

Second, land ownership is established through multiple documents maintained by different departments, making it cumbersome to access them. For example, sale deeds are stored in the registration department, maps are stored in the survey department, and property tax receipts are with the revenue department. Further, these departments work in silos and do not update the data in a timely manner, which results in discrepancies. One has to go back to several years of documentation to find any ownership claims on a piece of property, which causes delays.

Third, the cost of registering property is high and, hence, people avoid registering transactions. While registering a sale deed, the buyer has to pay a stamp duty along with the registration fee. In India, stamp duty rates across states vary between 4% and 10%, compared to 1% and 4% in other countries. Further, registration fee is an additional 0.5% to 2%, on an average.

Fourth, under the Registration Act, 1908, registration of property is not mandatory for transactions such as acquisition of land by the government, property leased for less than one year, and heirship partitions. Thus, several property divisions are not recorded and, hence, do not correctly reflect the ownership of the property. This often leads to litigation related to rightful ownership.

Unclear land titles impede development on several fronts. For example, in rural areas, small and marginal farmers, who may not hold formal land titles, are unable to access institutionalized credit. In urban areas, disputed land titles lead to lack of transparency in real estate transactions. Any infrastructure created on land that is not encumbrance-free can be potentially challenged in the future, making such investments risky.

Further, under the Smart Cities and AMRUT (Atal Mission for Rejuvenation and Urban Transformation ) missions, cities are trying to raise their own revenue through property taxes and land-based financing. This necessitates the importance of providing a system of clear land titles.

To address issues with unclear land titles, a move towards conclusive titling has been proposed. In this system, the government provides guaranteed titles and compensation in case of any ownership disputes.

However, adopting such a system in India will require several measures. Several changes in existing laws that govern registration and transfer of land will be required. A system of registered property titles will have to be developed as the primary evidence of ownership. All existing land records will have to be updated to ensure that they are free of any encumbrance. Information on land records, which is currently spread across multiple departments, will have to be consolidated. Although the DILRMP aims to move towards conclusive titling, it only addresses these issues partially.

Prachee Mishra and Roopal Suhag are with PRS Legislative Research.