IIPM: India needs to change its ambiguous land ownership laws

Among the legal inadequacies, unclear land title in big cities is a hazard. Most of the real estate dealings is done on lease for years; even after the land is sold, ownership remains with the government except in Rajasthan, the only state which has introduced guaranteed Land Title Bill to transfer ownership from government to buyers for its cities. The rest of the states remain ambiguous over the issue. Ask any buyer the relevance of guaranteed title or other legalities!

Developers require a hundred different authorisations which take three to five years on an average; enough to destroy anyone’s motivation! Moreover, stamp duty in India is very high (over 10 per cent) compared to the rest of the world (2 per cent). This, on one hand restricts demand, and on the other hand, increases property cost. Property tax is a mere 0.002 per cent whereas the world average is 1.5 per cent. This gives the government scope to easily increase its revenue by hiking it a little further, as it is a primary tool for government to generate revenue.

Considering all these, there is one thing clear: government alone can not provide housing to its populace, the country needs strong participation from private players and that can only be possible by better transparency and adequate reforms initiation, at least on the above stated issues. A few states’ individual effort might work as a catalyst but India needs a centrally-motivated holistic approach. Will that be possible in this land of disparity? ....Continue