Cracking the Case of Indian Land Titling
Two years ago, a large protest overtook India. The 2020–2021 Indian Farmers Protest was a culmination of poor treatment of farmers by the Indian government over a series of issues, most notably the issue of land rights. Being in the Western Hemisphere, we underestimate the monumental importance of property rights. These bills and titles allow us to engage in the economy, sell, buy, and trade land with incredible efficiency, allowing us to leverage money we don’t have to build something better for ourselves, which could be anything from a mortgage to a business loan. This didn’t happen for these farmers. Land titles for farmers are minimal, opening the door for a plethora of problems, many of which end up in disputes to the highest court of the land. Focusing on land rights may seem silly to those who already have them, but this is the bedrock for which a strong economic base can be created for. If land titling can be solved efficiently, the case load in the Indian court system is significantly reduced, the land can be harvested in a more efficient manner, and the Indian economy will continue to grow.
The Problem:
The current government of India is focused on developing land as a flagship for positive change, which includes fiscal help, loan forgiveness, and other farmer support. As land is central to India’s developmental trajectory, finding a solution to land conflict is the foremost policy challenge for the current Modi government.
The Economic Curse:
32% of land disputes in India are solely in common land, putting $57B of investments in jeopardy, which affects 960,000 people from these disputes, specifically in rural India.
A common land dispute is one where there is a conflict on where public land lies or where property is allowed to go; which usually occurs when private investment purchases land that the government may utilize. This stems from a British rule, which regards the state as the owner of any land not privately owned, and gives it power to redistribute land at will as largesse to select beneficiaries.
The Destruction on Courts
Land disputes account for the largest set of cases in Indian courts — 25 per cent of all cases decided by the Supreme Court involved land disputes, of which 30 per cent were related to acquisition; and surveys suggest that 66 per cent of all civil cases in India are related to land or property disputes. Governments (including India) have trouble keeping pace with the large amount of RoR (Record of Rights of Land Documents) changes made every day, can increase odds of land disputes. “Poor land records”, “inaccurate price reporting”, and “presumptive, not conclusive, titles over land” are fundamental problems that must be fixed before we can have a paradigm shift on land acquisition.
Corruption is also rampant in the application process, as 30% of applicants give a bribe to the clerk.
The Status Quo of the Problem
India currently follows a system of presumptive land titling, meaning that land records are maintained, with information on possession, which is determined through details of past transactions. Ownership, then, is established on the basis of current possession. Registration of land is actually a registration of transactions, such as sale deeds, records of inheritance, mortgage and lease.
The entire process goes through the government and land titles, meaning:
- Holding registration papers does not actually involve the government or the legal framework guaranteeing the ownership title of the land.
- The registration of land or property refers to the registration of the transaction (or sale deed), and not the land title (Ministry of Rural Development, 2008). A registered sale deed is not a government guarantee of land ownership.
This means that if someone chooses to purchase land, with a beneficial transaction on both sides, this doesn’t automatically mean that the government will protect this transaction. The land can still be stolen away.
- Land ownership is established through various documents. These include registered sale deeds, record of rights (document with details of the property), property tax receipts, and government survey documents. These must be held by both owner and state.
If there’s a problem on either end, a family that has farmed on that land for decades upon decades may not technically own the land.
- 35% of all land has been surveyed by the gov, and only 9% of all rural area has been surveyed.
- While registering a property transaction, the buyer has to pay a registration fee along with stamp duty. Stamp duty rates across states vary between 4% and 10%. In addition to stamp duty, registration fee is an additional 0.5% to 2%, on average.
This means that a family who owns around $100,000 worth of land, the cost to register the property could be up to $12,000, while a farmer traditionally only makes around $1300 a year in profit. This can add up if farmers are registering acres of land, a cost that many of them cannot afford without selling part of their land, something they can’t do without registering it. Many just don’t register, or simply aren’t incentivized to, because of the cost.
It’s difficult to keep track of physical documents, especially without a big digital database. Much of the land that should be surveyed/accounted for, has not been. Farmers/rural owners of land aren’t incentivized to register said land, sue to potential high costs. Without land registration, farmers cannot apply for loans, meaning that they cannot help boost their own property value to get tools that will help them.
The Status Quo of Current Solutions:
The main reason land disputes happen is because there are no official documents proving a farmer’s ownership of a specific plot of land. If every farmer had land titles relating to their piece of land, then disputes would be much more rare. If a company is not increasing the ownership of land titles (thereby reducing the number of land disputes) then they are not tackling the root cause of the problem.
Companies in this space are oriented towards reducing court congestion, to make the process of settling disputes easier. However, this does not directly decrease the amount of land disputes. It just makes the process of land disputes less painful. This is the gap between the solution and current companies. They do not focus on increasing official land titling/directly decreasing land disputes, they focus on the process of resolving land disputes.
There is a similar trend with the Indian government’s DLIMP program. Although this program is intended to organize the land records of India to get more land accounted for, it does not solve the fact that many farmers in India don’t even have land records, let alone digitalizing them. Even if all the existing land records in India are kept in perfect order, this will not effect the state of farmers who are not able to afford land titles, and are therefore vulnerable with their land.
In terms of acquiring land titles, there are two variables that make it harder for a farmer to get land titles:
- 💰💰 Cost of getting land titles
- ❓❓Uncertainty of receiving land titles
Farmers have to pay around 10% of a plot of land’s value to submit a request for the land title. This means that if you have an acre of land that is worth $10,000 then you have to pay ~$1000 to submit for a land title. Since most of these farmers have barely any other assets than their plot of land, meeting this high price barrier is difficult.
In addition to this, there is also an uncertainty factor: for if, and when you will receive your official land title. In some occasions, a farmer’s land title application slips through the cracks of the process, getting lost. This causes all of the farmer’s application money to go to waste as they would have to submit another request for a land title. If that is not the case, farmers can get their land titles years, up to decades after they submit their request. If a bribe is not payed, the process can take a very long time, leaving the farmer vulnerable for longer periods of time, but also making a land title less desirable.
In order to fix this issue, it is important that these two variables are directly attacked. For the cost, it must be easier for the farmer to pay the application fee (paying small amounts over extended time, or lowering application costs etc.) For the uncertainty, there must be some sort of assurance, or consistency in delivering these land titles in an acceptable period of time.
Our Solution
One interesting thing that we found out is that if the work were to be already done for the government, the stamp fee can be waived due to the incentive of more money in the economy. With that information, if we could find a solution that every single party in the system would be comfortable with, then we have the solution that is ready to be registered. Given advances in satellite imagining technology, machine learning, and access to information from farmers, we decided to combine these ideas together to create something that has the potential to solve this mammoth of an issue.
The Satellite Images:
We’d create an app that is accessible to farmers that contains satellite images of their district from the USGS Earth Explorer. We’d also use hyperspectral and land sat imagery to get a more accurate image of the fields that will be determined. Farmers would open the application, and an existing GPS system in their mobile device would direct them to their current location. Then, farmers would map out exactly where their farm was, including borders. Other inputs including what they grow, access to wells, and access to sunlight would also be required to get an accurate valuation on their land. Providing a valuation on land allows for farmers to get some semblance of what their land is worth before a land title is officially given, meaning that they won’t fall prey to predatory practices.
Disputes:
If neighborly disputes do occur, we plan to solve this through a third party system instead of going through the quagmire that is the Indian Court System. An online system with some form of a chatbox can be established, or a discussion between them through some form of a village head or an impartial party. An algorithm could also propose other borders that may make them both accept the decision.
Valuation:
Given the multiple datasets that we have available, we’d be able to create a fairly accurate model of what the valuation of that land could be like. This data includes crop yield, pH levels, aridity, turbidity, and so on, and at that point we’d be able to utilize a machine learning model to combine these zeros and ones into a clear valuation.
Official Titling:
Once we have all the data and the maps ready, we can send that to the Indian government. Given the work already done, there is little left to do but to submit the official stamp of approval with no cost, so that farmers actually do have their land ready.
Economics
The average amount of money that the government budget allows to survey a single village is $4500. According to Google Firebase estimations, our application should take up about $60 a month. Assuming 3 months until the whole village is mapped out, the total cost to map out a whole village should be ~$180, the total cost is 25x under the budget, significantly decreasing surveying costs. In order to make a 40% profit per village, we could charge the government $250 per village surveying. Essentially, we would be selling cadastral maps of rural villages to the government for a fraction of the price they can survey land for. The average budget the Indian Government has for surveying a village equates to $4500. Using Google’s Firebase application servers, our application could survey each village for $180. Including 40% profit margins for the company, we could sell land surveys to the Indian government for only 4% of their per village budget.
Our Next Steps:
The path to success involves a series of moving parts, most notably:
- An app that farmers can reliably use to design and draw borders that make sense for them
- A series of datasets about the land
- A machine learning algorithm to predict the value of said land
- Strong infrastructure in these areas of development
- Understanding of the Indian Government and its incentives
Currently we are focusing on a small village in the center of Tamil Nadu known as Odanthurai. We are in contact with their leader, as well as other government officials that can help us implement this solution. With a successful pilot it will be possible to build trust with one of these rural villages in India.
Our Hopes:
We can give farmers financial freedom via loans, enabling them to increase their harvest by up to 80%. With this solution, it will be possible to bring a future where millions of farmers do not worry about the potential of their largest asset, their livelihood, and their home, to be taken away. The boosts on the Indian farmer and the Indian economy as a whole can largely increase, creating for a better country, and a better world.
