Disputes over land and property rights take place all too frequently and widely in India, primarily because the state does not guarantee the authenticity of its property records—if you buy property based on property records that are later proved to be incorrect, the state does not compensate you for this. According to a McKinsey report, over 90% of land units in India are under dispute over their ownership. This lack of clarity over who owns the land raises problems, such as property developers finding it difficult to use the land as collateral for loans. It’s in this scenario that a pilot project in Karnataka could do a lot of good. The system—under the Urban Property Ownership Records (UPOR) project—creates an official record of the current owner of the property. Titling, as the formalisation of ownership of property is known, would immediately reduce the incidence of mortgage fraud. In fact, the UPOR system will distribute cards to landowners after the government has verified that the ownership is legal, after which banks will be able to refer to them to prevent mortgage fraud, with every loan linked to the UPOR database. According to the McKinsey report, streamlining and organising the process of establishing property ownership will boost competition in the construction and housing sectors, which, in turn, would boost GDP growth by a considerable amount, and reduce land prices.
If the system is successful in Karnataka, it’ll be scaled up to the rest of the country—something that should be done, in the interests of transparency, if not the great relief to the judicial system via the reduction in the number of property disputes and the boost to GDP the greater clarity will provide.