Those of us who studied economics in our youth had it drilled into our heads that well defined property rights are crucial to facilitate the socioeconomic development of the poor. Why so? Because formal land titles – theoretically speaking – enable the poor to use their land as collateral for credit, providing them with a valuable insurance and savings tool. At least two generations of celebrated economists from Max Weber to Hernando de Soto to Douglass North have written extensively on this subject. In a celebrated literature survey published in 2010 on this subject (along with some elegant mathematical proofs of how property rights work), Tim Besley and Maitreesh Ghatak of the London School of Economics said:
“…property rights are an important element of the institutional structure of an economy. However, property rights are not exogenously given—they evolve over time, driven by economic and political forces. Therefore, a study of property rights also requires consideration of the arrangements, both formal and informal, that ensure that property rights are well defined and enforced. Recent advances in political economy have given greater prominence to the role of the state in codifying and protecting such rights.
By property rights economists typically refer to private property rights a key feature of which is being able legally to exclude others from using a good or asset. This affects resource allocation by shaping the incentives of individuals to carry out productive activities involving the use of the good or asset, undertake investments that maintain or enhance its value, and also, to trade or lease it for other uses.”
It’s in this context that what’s happened in India over the past decade should bring a smile on the faces of those living in rural India. As Risha Chitlangia explains: “State governments have issued as many as 1.32 crore property cards in 2.55 lakh villages across the country…giving people ownership documents for their property, ThePrint has learnt.
These cards are being issued under the central government’s Survey of Villages and Mapping with Improvised Technology in Village Areas (SVAMITVA) Yojana, which creates a Record-of-Rights (RoR) for inhabited areas (as opposed to agricultural land) in villages — data that most states don’t have.
The Survey of India — the central agency for mapping — is preparing maps using drones and information provided by state governments about property owners after on-field verification.
Launched in 2021, the SVAMITVA scheme is also meant to address land-related disputes, help villagers take bank loans against their properties and aid gram panchayats in preparing development plans and collecting property tax.
The yojana is being implemented in 3.72 lakh notified villages out of 6.62 lakh villages in 31 states and Union Territories (UTs)…
The Ministry of Panchayati Raj, which is implementing the scheme together with state governments, has already mapped 69 percent of the notified villages, and plans to complete the drone surveys by March next year.”
The senior Government official quoted in The Print article claims that work under the scheme would be completed by March 2025. This is how an economy develops, not through the launch of pizza delivery apps but through the development of the institutions which underpin resource allocation for hundreds of millions of people.
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