Land Policies for Growth and Poverty reduction

Land policies are of fundamental importance to sustainable growth, good governance, and the well-being of, and the economic opportunities open to, both rural and urban dwellers - particularly the poor. To this end, research on land policy, and analysis of interventions related to the subject, have long been of interest to the Bank's Research Department, and other academic, and civil society institutions. The report aims to strengthen the effectiveness of land policy in support of development, and poverty reduction, by setting out the results of recent research in a way that is accessible to a wide audience of policymakers, nongovernmental organizations, academics in the Bank's client countries, donor agency officials, and the broader development community. Its main message rests on three principles: 1) provision of secure tenure to land improves the welfare of the poor, particularly by enhancing the asset base of those whose land rights are often neglected, and, creates incentives needed for investment, paramount to sustainable economic growth; 2) facilitation of land exchange, and distribution, whether as an asset or for current services, at low cost, through markets, and non-market channels, will expedite land access by productive, but land-poor producers, so that once economic growth improves, financial markets would rely on the use of land as collateral; and, 3) governments' contribution to the promotion of socially desirable land allocation, and utilization. The report discusses mechanisms to promote tenure security, demonstrates the importance of rental market transactions, arguing the removal of impediments to these can generate equity advantages, and positive investments. It also illustrates mechanisms, ranging from taxation, to regulation and land use planning to address these issues.


INTRODUCTION
In India, land continues to be of enormous economic, social, and symbolic relevance. The way in which access to land can be obtained and its ownership documented is at the core of the livelihood of the large majority of the poor, especially in rural and tribal areas and determines the extent to which increasingly scarce natural resources are managed. Land policies and administration are critical determinants of the transaction cost associated with modalities to access land for business and residential use and, through the ease of using land as collateral for credit, the development of the financial sector. Land also continues to be a major source of government revenue and a key element for implementing government programmes. This implies that land policies and institutions will have a far-reaching impact on the ability to sustain India's current high rate of growth, the extent to which such growth reaches the poor, and the level and spatial distribution of economic activity.
As land administration-through the revenue department-was the core of colonial structures and continues to be a key pillar oflocal government today, issues relating to land have long been the subject of an animated policy debate. There is consensus among policymakers that land administration-which fell into neglect as officers had to attend to myriad other duties-is in urgent need of improvement to effectively fulfil its functions in the 21st century. The key question is not 'whether' but 'how' to go about this task most effectively and which policy issues need to be addressed to ensure that doing so will be sustainable and will have an impact on improved land access and greater productivity of land use.
Recent advances by a number of states that have used information technology (IT) to make significant progress in modernizing their land administration system, as well as a nationwide survey evidence, provide an opportunity to revisit this question. The goal of this report is to draw on recent empirical evidence to assess the extent of improvement in land-related institutions in individual states as well as the impact of a range ofland-related policies. In the case ofland administration we draw on a review ofland records, survey and settlement, and land registration in 14 states while a nationwide survey that spans the period 1982-99 provides the basis for an assessment ofland policies. Analysis of these allows identification of action areas by policymakers to ensure that opportunities provided for modern technology and the convergence of interests-visible in recent initiatives such as the National e-Governance Programme-can be most effectively utilized.

INSTITUTIONAL STRUCTURE AND CHALLENGES
Most of the institutions and processes for administering land in India were adopted from the British at the time of independence and have been little modified since.
Given that their main purpose was to raise resources, the land revenue as well as the survey and settlement departments-the key institutions responsible for land administration in India-were focused on productive rural areas that provided opportunities to generate tax revenues. Both urban and 'marginal' rural areas remained outside the system. This distinction, which was difficult to justify in the first place, has increasingly become archaic in three respects.
First, and most important, any piece of rural land that had been transacted through sale at any point after 1882 entered the land registry system, implying that its records are maintained not only by the revenue but also the stamps and registration department. This duplication of institutions increases transaction costs for landowners without providing commensurate benefits. However, more importantly, it introduces a major source of tenure insecurity and even fraud because, for a variety of reasons, the records maintained by both institutions may well be inconsistent. While the most radical solution, which indeed has been mooted in policy circles, would be to merge the two departments, doing so may encounter strong bureaucratic resistance. Even if it were feasible, it is an option only if and when the necessary groundwork, much of which will be discussed in this report, has been undertaken. At the same time, steps to clarify the legal situation ofland records and ensuring backoffice integration are essential.
Second, rural areas at the urban fringe have increasingly been subject to urbanization. Although this is associated with a significant increase in land values that would warrant a more precise survey, in many Indian states the result of this process was that the survey department's responsibility for maintaining an accurate spatial record of land ownership lapsed and the responsibility was transferred to municipal corporations which were interested in maintaining spatial records only for tax purposes. Some have done this relatively well, implying that spatial records that were established for tax purposes can, in principle, be used as a basis for ownership records. However, others did not live up to the task, resulting in outdated map products of inferior quality that appear to be one of the reasons underlying the high levels oflandrelated conflict (28 per cent of parcels according to one study) in peri-urban areas. Clarifying the institutional situation with a view towards eliminating this 'spatial data vacuum' where required and ensuring that there is one agency with the necessary capacity to maintain spatial records in rural and urban areas is a priority for policy. Last, but by no means the least in importance, even revenue lands that had previously been waste, and thus were not subject to settlement surveys, have increasingly been brought under agricultural cultivation. This implies that one of the key challenges from a poverty perspective is to extend land administration to areas that had been left out. Doing so will require clarification of the interface with the forest department and a broadening of tenure choices that can be accommodated within the land administration system to include, for example, forms of communal ownership. Given the large number ofland and people involved, and the high concentration of poverty in these areas, settling these issues is of very high priority for poverty reduction and requires major policy decisions. Some of these decisions are currently under debate in the discussion of the Forest Rights Bill. Once the broad policy parameters have been set, a serious implementation effort will be needed. While this can build on the general principles identified in this report, specific measures will have to be discussed in more detail. This, together with the dynamic nature ofland records (and the fact that such a step may face bureaucratic resistance), puts a premium on selectivity in what needs to be computerized and on speedy completion of digitization. This seems to be a key reason why, thus far, only states which outsourced digitization to a private operator with clear timelines have been successful in making the switch. Second, the ability of the computerized system to be financially selfsufficient and use the income generated to sustain and/ or improve the system has been critical in reducing political interference and outsourcing specific tasks in cases where public sector capacity was insufficient.

IMPROVING TEXTUAL LAND RECORDS
Business models to ensure this need to be encouraged. Third, to ensure acceptance of, and confidence in, the system, three factors are essential, namely (i) transparency of the process, as embodied in a verification process with active participation of landowners; (ii) integrity of the data, through state data centres with appropriate security features and audit trails; and (iii) publicity, that is, making data available on the internet. Finally, there is considerable I.CUTIVE SUMMARY demand for access to land records at the village level and a number of strategies have been adopted to effectively respond to this demand in the interim while the necessary connectivity to allow village-level access is gradually being put in place.
The impressive success of some leading states in shifting from manual to electronic records should not conceal the fact that, in many instances, large amounts of money have been spent on initiatives to computerize land records with little impact on the ground as yet.
This implies that there is considerable scope to reorient or accelerate ongoing programmes to enhance their effectiveness. Our review suggests that the effectiveness of Government oflndia (Goi) schemes for Computerization of Land Records (CLR) and Comprehensive Modernization of Land Records (CMLR) can be enhanced by incorporating the best practices (identified above) more systematically in design and evaluation to enhance the effectiveness of programmes to be funded under this scheme.
Specifically, computerization initiatives should receive support only if the information to be digitized is relevant for landowners, if a time bound plan for data verification and abolishing manual records exists, if key elements of the process are oursourced to the private sector, if issues of data integrity are satisfactorily addressed, and if they are based on a business model that has the potential to fully cover operational costs. Complying with such requirements is not difficult and the ability to draw on the experience of states that have already completed the process will allow 'latecomer' states to realize significant costs savings.
Efforts to make this experience more widely and easily accessible to other states merits support.
A second issue of relevance for policymakers relates to the fact that, even for the leading states, the benefits from record computerization could be significantly enhanced if guidance and model regulations were available on a number of key issues that include but are not limited to (i) the nature of information to be digitized and a data architecture that can eventually provide a basis to link revenue and registration records in a way that ensures minimum consistency and portability of software across states; (ii) best practices on achieving the integration of rural land records with urban property card systems; and (iii) ways to achieve functional integration not only with registration but also with surveys that go beyond a mere computerization of old manual systems and thus will be cheaper and more sustainable in the long term.
Supporting well-defined pilots to provide guidance on some of these issues will be important to reap full benefits from computerization and should be a priority for the Goi.
Computerizing registration of deeds which is fully or partly completed in Andhra Pradesh, Karnataka, Maharashtra, Rajasthan, and Tamil Nadu, has similarly helped to realize large benefits. One is that, in a number of states, it has been associated with a significant increase in the number of registered land transfers helping to increase revenue from stamp duties even though duty rates, in some cases, were substantially reduced. This suggests that more transparent processes for registration and property valuation increased the usefulness of services to customers and also that demand for registration is price elastic. In addition, the fact that in some states encumbrance certificates for a significant length of time are available helps to increase tenure security. The ability to obtain these electronically via the Internet implies a significant reduction in transaction costs for sellers and purchasers as well as banks although evidence regarding its impact on credit market activity is still limited. Finally, computerizing registry data has created the preconditions for a functional integration between registration and records that will have to be a key element of any effort to make the land administration system more conclusive and thus reduce the transaction costs and insecurity involved in dealing with land.
'Best practice' elements that have facilitated effective computerization of the registry are as follows. First, more than in the case of land records, computerization of the registry has been based on some re-engineering of the underlying business practices that involved the standardization and simplification of deeds (contrary to digitizing virtually everything that is on record), the development of a process to automate market valuation, and the setting of clear performance standards (parallel to including mutation from the start). Second, to ensure financial sustainability, roll-out proceeded from offices with high transaction volume to those with less land market activity, with adaptations made in the process. Third, outsourcing to the private sector was a key element from the very beginning and payment schedules were designed to have high-volume offices implicitly subsidize low-volume ones, thereby ensuring equality of user fees throughout the state. From a purely commercial perspective, computerization of land registration is straightforward and the main source of resistance is likely to be political, often from people in the system whose ability to receive rents would be negatively affected. Similarly to what was the case for revenue records, it is important for the Go I to provide states with incentives to overcome such resistance and draw equal with the more progressive states in terms of computerizing registration. To the extent that the ease of transacting land provided by a well-functioning registry will be an important consideration in investment decisions by firms or individuals who are not limited to a given state, failure to do so can over time translate into widening disparities between more advanced and backward states.
Also, a number of policy issues need to be addressed even in the more advanced states. First, even though some states have moved to reduce high levels of stamp duty that tended to drive transactions into informality, the taxes levied on property transfers in India, in contrast to land taxes, remain among the highest in EXECUTIVE SUMMARY the world. Unless these are reduced, even the best technical solutions for improving land records are unlikely to be sustainable. Options to partially replace stamp duty with higher land taxes-levied on market values and ideally shared between local bodies and states-would be more in line with international best practice and need to be explored urgently. Second, it is important to ensure completeness and consistency of revenue and registry records. This will require regulatory changes to ensure that mutations, for example, through succession, that did not need to be registere.d in the past, will be registered automatically and free of charge, which will not be difficult if the systems are linked electronically. Third, the lack of a consistent reference to spatial parcel identifiers in the registry is one of the key sources of incompleteness and insecurity and needs to be tackled, as will be discussed in greater detail later. Finally, there is a strong perception about registry officials lacking accountability. This issue can be addressed once the officials have easy access to the information needed to perform basic checks on the transactions that are offered to them for registration. While none of these issues poses insurmountable difficulties and many of them will require only small administrative changes in regulations, leadership by the Go I to support pilots, drive the process and ensure communication across states will be important role, especially if and can be linked to the provision of finances.

IMPROVING THE STATUS OF SPATIAL LAND RECORDS
Regarding spatial data, there is consensus on three issues. First, the establishment of a comprehensive, reasonably accurate, cost-effective, and affordable spatial framework will be a key element of any strategy to improve India's land administration system.
Second, due to long neglect and gaps in institutional responsibilities, the reliability of existing spatial data is much inferior to that of the textual database and neither simple digitization of existing data nor attempts to resurrect the tradition of revisional surveys established by the British will be sufficient to address the problem. Third, there is an urgent need to develop viable and replicable models to improve and maintain spatial records, along the lines of that achieved for textual records. This is more difficult because of the highly specialized nature of surveying, the presence of strong vested interests pushing for technically sophisticated rather than the economically viable options, security restrictions related to access to geodetic coordinates and the use of aerial photography, and the fact that surveying costs tend to increase exponentially with precision. A spatially differentiated approach will be needed that chooses strategies based on a comparison of the costs of available technical options to the likely benefits in a given environment and where cost recovery options are in line with beneficiaries' capacity to pay. Still, there is little reason to believe that the principles that helped to achieve success for textual records will not be applicable in the area of surveying as well.
In fact, a cursory review of pilot surveying activities suggests that a key reason for the failure to develop replicable models is that these key success factors have been almost completely neglected. First, instead of drawing on existing information and expanding from there to fill gaps, surveying pilots tried to start from scratch with a complete re-survey. Second, instead of considering a range of technology options and then focusing on cost-effective ones where India has world class capacity, 'modern technology' was narrowly defined in terms of electronic total stations (ETS), an expensive option in which India has little comparative advantage and which provides a level of precision that is not needed for at least 80 per cent of the country. Cheaper and more appropriate options such as photogrammetry and use of handheld global positioning system ( G PS) devices received little attention. Third, even though the need to recover cost was critical to ensure that solutions for textual records remained focused on clients' needs and overall affordability, in addition to helping to avoid undue political interference, it was not adopted in the case of spatial pilots. Finally, although none of the states that successfully completed computerization of textual records did so without outsourcing key components to the private sector, surveying remains a government monopoly in all but three Indian states (Andhra Pradesh, Karnataka, and Madhya Pradesh). Even in these states what passes as 'private sector' appears de facto more as an appendix to the government with limited autonomy either in commercial/financial (rates are set by the government and there is little contact between private suppliers and their clients) or technical matters (technology is narrowly prescribed and output has to be delivered in paper form and checked by officials).
To address this issue, it is desirable that: (i) public sector activity focuses first and foremost on comprehensive coverage with a low precision cadastral index map-something that is a dear public goodrather than establishing islands of high quality spatial data in an ocean that remains largely uncharted.
Combining satellite imagery with existing spatial data (that is, village maps, tax maps, etc.) offers an appropriate and cost-effective opportunity to do so; (ii) pilots focus on developing scalable and cost-effective ways to generate spatial data and link them to textual records that are applicable to archetypical situations-for example, unrecorded subdivisions, complete change in land use patterns, loss of spatial data, or complete lack of survey-and be geared towards producing procedural insights that form the basis for regulations and guidelines; and (iii) a major effort to expand capacity and increase the role of private surveyors (with structures for accountability) is mounted, so that, instead of crowding out the private sector, public effort is focused on setting a regulatory framework and conducting or at least financing surveys in (marginal and tribal) lands that would otherwise not be attractive to private operators.

PUTTING THE ELEMENTS TOGETHER: TOWARDS GREATER TENURE SECURITY AND EASIER TRANSFERABILITY OF LAND
From the very start, the goal of efforts to modernize land administration in India was to increase tenure security and reduce the cost of transferring land. While modernization of textual and spatial records is a necessary condition for this, it will be fully effective only if accompanied by an appropriate legal and regulatory framework. In this context, a key concern that is widely debated in policy circles, is whether, and, if yes, when and how, India should make the transition towards a system of title registration, often also referred to as a 'Torrens' system.
Both deeds and title registration are intended to put rights in land on public record. The key difference is that, while under title registration the register serves as primary evidence of ownership, a deed only provides evidence of an isolated transaction that says nothing about the validity of this transaction. Simply put, under a deeds system potential purchasers will need to expend resources to investigate whether the seller's title is genuine whereas under a title system this is not needed as the validity of such claims has already been checked by the registry system. Under most title registration systems, significant emphasis is placed on the 'indefeasibility' of title and in many systems this indefeasibility is supported by a state guarantee. In a deeds system the cost of a title search by a potential buyer depends on: (i) the completeness of the information contained in the registry; (ii) the ease of searching it; and (iii) the reliability of the registry information. To reduce this cost, steps to make registration compulsory, computerizing it and EXECUTIVE SUMMAR facilitating searches by parcel as well as by person by introducing/improv~ng parcel maps and generating parcel indices in the registers, and ensuring that all documents entered into the registry have undergone at least rudimentary checks for validity by the registrar have been adopted all around the world to improve deeds systems (for example, in the Netherlands, South Africa, the US). Moreover, improved deeds systems of this nature constitute an essential first step in making the transition towards a title system. Taking these steps is essential for India irrespective of whether or not an eventual transition to Torrens title is envisaged.
Even in the states where land administration is greatly advanced, considerable further action is required to reach the point where all of the above are implemented.
Once this is the case, the decision on whether to make the transition towards a full title registration system will hinge on three factors. First, there needs to be sufficient political support to make the legal and institutional changes needed by a system of title over and above one of deeds registration. Second, even if the capacity to run a title registration system is available, a consensus on the desirability of incurring these costs needs to be reached. Finally, an important decision relates to the establishment of a guarantee fund that is essential in most jurisdictions for an indefeasible system of title registration in contrast to merely an improved deeds system. This implies that a title system is more expensive to run but has lower costs of conveyancing whereas the cost of operating a deeds system is lower but the effort required from conveyancers is higher. Two key dimensions for analysis of this issue are related to sustainability and distribution of benefits. Concerning the latter, a title registration system imposes higher costs on society as a whole but makes it cheaper to transfer land for the parties involved. Regarding the former, tide systems are vulnerable to informality and can become dysfunctional if a large number of users are not willing or able to pay the cost of participating in such a system.
In the Indian context, an important barrier to participation in the formal system is the high level of stamp duty.
A better understanding of the magnitudes involved in the Indian context would be critical to reach an informed decision on whether or not to go for a title registration system. A close monitoring of efforts to move towards title, that have been initiated in Andhra Pradesh is likely to yield important insights for other Indian states faced with similar questions. Comparing the experience of England and Scotland-two jurisdictions which, starting from a basis that was much superior to what is currently encountered in even the most advanced Indian states, made a successful transition from a deeds to a title system over a period of decades-with that of less successful experiences of developing countries trying to make such transitions without having in place the infrastructure to support such a system or being aware of the complex issues involved, suggests that trying to fast-track these processes carries significant risks.
A more immediate goal, to be accomplished at least in the medium-term, is to functionally integrate the different databases used in land administration to provide landowners with a certificate-which can even be called a certificate of title-that combines relevant and current information pertaining to a plot (that is, ownership status, other current rights and obligations in the property, under a range of registered instruments that may include mortgages, rights-of-way, easements, caveats, liens, covenants, etc., and a map that unambiguously defines the spatial extent of the land parcel and its relationship to adjoining land parcels) irrespective of the government department maintaining the information. If combined with the option to maintain spatial data at low cost and regulations to ensure that any changes in either textual or spatial records are automatically updated in the system as well as requiring registry officials to perform at least basic validity checks before registering a document, it will allow realization of90 per cent of the benefits from a title registration system at a fraction of the cost, while at the same time providing a more appropriate basis to decide whether transition towards full title is desirable.

LAND OWNERSHIP REFORM
Although improving land administration along the lines discussed above can have a significant impact on the welfare of those who own land, it will at best provide indirect benefits to the large number of households that are landless and, without any tangible assets, may well be caught in a poverty trap from which it is difficult to escape. In India's situation, policies to strengthen land administration will have be complemented by considering opportunities for the poor to access land as a means of improving their asset status and livelihood.
Policies of land reform, through abolition of intermediary interests, tenancy legislation, and land ownership ceilings, have formed the core of Gol policies to improve the land ownership structure.
We use empirical evidence from a nationwide survey spanning the period 1982-99 to assess whether such reforms, proxied by dummies at the state level, have been associated with higher levels of investment in physical and human capital growth, and how their impact has evolved over time. The results suggest that transferring land ownership may have been quite effective, although limited variation in land reform implementation has to be taken into account in interpreting them. Although they were initially worse off, households in states with higher levels of reform effort saw their welfare and investment improve more than that of households in states where land reform implementation remained lacklustre. This is supported by econometric evidence which points towards a positive, significant, and quantitatively important contribution ofland reform to investment and growth with an overall effect that compares favourably to other forms of social spending. At the same time, econometric evidence also suggests that the positive impact of land reform legislation has been declining over time and actually risks becoming negative, something that would be consistent with the notion that land reform legislation is no longer very effective in transferring new land to the poor but continues to affect the efficiency with which land is used by land reform beneficiaries as well as landowners targeted by land reform, due to the fact that the latter may take preventive measures to escape this threat.
If the above analysis is correct, other mechanisms to bring land to the poor will have to be identified. Evidence from different Indian states points towards a range of options for doing so. One option that has been implemented with some success in Andhra Pradesh is to provide the poor with legal assistance to either resolve pending cases or to ensure implementation of court orders on the ground. As the large number of pending court cases generates large negative externalities, one might even think of specific incentives to resolve these, possibly in tandem with a participatory process of improving the land administration system. A second option, currently being implemented in West Bengal, Karnataka, and Andhra Pradesh, is to provide funds to the poor to acquire very small plots ofland in the market, either for residential purposes and market gardening or for productive purposes, often through self-help groups (SHGs). At the same time, to avoid negative effects ofland reform legislation on the welfare of the poor, it is desirable to: (i) allow subdivision and transfer of land received through land reform, especially in the course of generational change; (ii) systematically empower civil society to help resolve land cases; and (iii) explore the scope and effectiveness ofland markets as a means of providing land access. Third, where large amount ofland continue to be held by the government, regularization should be much easier. Options to provide secure access and EXECUTIVE SUMM title to such land include a variety of tenurial instruments such as transfer of government wasteland to private parties, long-term lease of occupancy rights, and formal recognition of communal tenure.
Evidence from Andhra Pradesh highlights not only that there is a considerable amount of land that does not have dear title but also that providing a dear certificate (patta) can significantly increase land values-by 15 per cent to 20 per cent for privately owned and by 30 per cent to 45 per cent for assigned or occupied land. Moreover, having a well-defined right also increases the probability of a plot of land being rented out, thereby providing indirect benefits to the poor and landless. Finally, the considerable potential to improve the welfare of women who depend on agriculture by giving them land rights or ensuring that they can inherit such land has often been neglected in the past. The 2005 amendment to the Hindu Succession Act (HSA) breaks new ground in this respect and sufficient attention is warranted in disseminating its content so as to allow it to become effective on the ground.

LAND LEASE MARKETS
Although land rental markets in India remain highly regulated, empirical evidence on the functioning of land lease markets or the impact of such regulation on poor peoples' ability to access land or use it productively remains limited. Contrary to other countries such as China and Vietnam where economic growth has prompted a veritable explosion in land rental activity, rental market participation in India has declined continuously since independence. This is surprising because in India land rental provides almost the only option for accessing land by a large pool of landless where as (involuntary) landlessness is virtually non-existent in either China or Vietnam.
The fact that more households rented land at any point in time than benefited from land reforms through India's entire independent history further illustrates the magnitude and policy relevance of this issue.
Use of nationally representative data provides four important insights. First, land rental markets contribute to greater equity and productivity ofland use by allowing the 'productive poor' and landless to access land and obtain returns to their labour that are significantly higher than what they would be able to obtain in casual labour markets. While, in the 1980s, land rental was biased in favour of those with higher levels of assets, this bias disappeared in the late 1990s, presumably as a result of the growth of the non-farm economy. Second, contrary to the hypothesis of' reverse tenancy'-according to which the majority of land entering rental markets is supplied by small and marginal farmers in a situation of relative duressit is households with higher levels of education that supply land to the rental market, presumably to take up more lucrative employment in the non-farm economy. This interpretation is consistent with the finding that activity in land lease markets increases with the overall level of economic development in a village. Third, state-level land rental restrictions reduce the ability of the poor to access land and also have a negative impact on productivity, implying that elimination of such restrictions could help to improve both equity and efficiency. Finally, wage rates in casual labour markets for both agriculture and non-farm activity discriminate strongly against women even though there is no evidence to suggest that women are less productive than men in agricultural selfemployment. This suggests that the relative benefits from being able to access land through rental markets would be larger for women than for men, implying that freeing up land rental markets could have a dispropertionately positive gender impact. This is of particular significance in view of the fact that the extent of gender discrimination does not disappear or decrease with economic development.
To reap the potential benefits from land rental, it will be important for states which, in the Indian context, have the responsibility for land policy to: (i) make land leasing legal in states where it is not; (ii) explore options to allow sitting long-term tenants (for example, baragadars in West Bengal) to acquire full ownership of all or part of the land they occupy; and (iii) replace rent ceilings and other limitations on land leasing with more enabling legislation such as dissemination of standardized long-term contracts or leases, local help in conflict resolution, etc. As one would expect the benefits from liberalization of land lease markets to be large, the impact of eliminating land lease restrictions in states where doing so is politically feasible should be carefully monitored and results from doing so disseminated to generate political momentum for similar steps in other settings.

LAND SALES MARKETS
The discussion above suggests that land rental is an important mechanism to increasing efficiency ofland use. However, policymakers have often been concerned that in rural areas where, as a result of credit market imperfections, households are not able to fully insure against shocks, distress sales may have a negative impact on both equity and efficiency. In other words, farmers would be forced to sell off their land, often to usurious moneylenders or other unscrupulous person, at bargain prices that are well below the productive value of the land just to ensure their survival in the face of a shock. As they will not be able to re-acquire the land through purchase once prices return to normal, this would leave them permanently landless, an outcome that is likely to be undesirable both from an equity and an efficiency point of view. Indeed, historically, distress sales were a major factor that led to the accumulation oflarge amounts ofland by powerful, though often not very efficient, landlords and moneylenders.
While there are few restrictions on land sales markets in India except general land ownership ceilings, the government maintains laws that restrict sale of land from tribals to non-tribals as a means to eliminate as much as possible the undesirable impact of landlessness. However, this policy is often not adhered to and procedures to ensure recovery ofland that was sold in contravention of such restrictions are cumbersome, costly, and largely ineffective. To assess whether such a restriction continues to be justified, we use data on land transactions during the period 1982-99 to explore the functioning of land markets in general, and the extent of tribal land market participation in particular.
A number ofinteresting findings emerge. First, even though the land sales markets provides less opportunity for land acquisition than land rental markets and participation requires higher levels of assets, markets constitute a more promising avenue to land access for the landless than non-market channels. Second, we find clear evidence of drought shocks increasing activity in land sales markets, supporting the notion that involuntary distress sales by the poor continue to be an important phenomenon despite legislation to the contrary. Third, consistent with the notion that credit market imperfections are at the root of involuntary land sales, availability of safety net programmes (e.g. employment guarantee schemes, EGS) and access to banks significantly reduce the propensity to sell, especially during droughts when greater inequality contributes to an increase in land transactions. Presence of banks helps activate land sales markets in general but reduces the tendency for land sales to occur in drought years. Finally, scheduled castes (SCs) and scheduled tribes (STs) are less likely to sell or purchase land even after household and village characteristics are controlled for. question whether a prohibition on land sales and rentals is needed and whether other policies allowing tribals to utilize land more productively may be more appropriate. Regarding the first issue, international experience points towards a number of mechanisms, including a right of first refusal, the requirement of obtaining community permission for land transfers, the need for a community decision to allow land sales in general, or an involvement of the community in land sale negotiations. These can achieve the same goal but foreclose fewer options for tribals to benefit from productivity-enhancing transfers. As to the second issue, there is little doubt that establishing and documenting tribals' property rights to the land they cultivate will be more effective in providing them with incentives to manage such land in a sustainable fashion rather than a prohibition on land sales. While largescale initiatives to do so on land that is currently classified as forest will have to await the passage of the Tribal Land Rights Bill, there are many situations where, for a variety of reasons, tribal land rights on revenue land are unclear from a legal perspective or are not well documented in the applicable records.
Immediate action to redress this situation is critical and should accompany any efforts to prevent involuntary land alienation of tribals.
In fact, there are many examples from other countries where emphasis on safety nets, together with providing an overriding right to the community, was a much superior approach to avoiding undesirable land alienation than prohibitions which cannot prevent those in dire need from selling their land, but reduce even further what they can get for it. By re-orienting energies from prohibition of alienation towards regularization of land occupation in tribal areas as well as systematic resolution of conflicts from past sales according to well-established criteria, it is possible to make a more significant contribution to improving the livelihood of the poorest groups. At the same time it will help reduce the potential for land-related conflict and extremist movements whose main rallying cry is land-related injustices. There are many international examples that can be drawn upon and doing so would be fully consistent with the Panchayat Extension to Scheduled Areas Act (PESA) and the spirit underlying the tribal land rights bill.
Launching a major effort towards implementation once this legislation is passed will provide an opportunity to put land administration truly into the service of the poor.

PRIORITY ACTIONS AND NEXT STEPS
Although land administration and policy in India are complex subjects with a bewildering amount of detail and variation across states, a number of key messages and priority actions emerge. First, land administration is an integrated system that is only as strong at the weakest link in the chain. Trying to compartmentalize it into different 'boxes' that are unconnected to each other (either registry or records or survey or ruralurban) will not help to improve the overall performance of the system. In this sense, improvement of textual records has made a very promising start but has solved only half of the problem. At the same time, improving spatial records is much more complex and trying to fix spatial records in an environment where issues relating to textual records are not sorted out may be risky. The MoRD's efforts to enhance the land administration system, and the effectiveness of Go I support to such efforts, can be improved, if a clear policy to lay out these issues is made available and is used to guide allocation offunds to, and reporting on the use of these funds from, individual states. Second, policymakers underestimate the intimate links between land administration and policy, in both directions, at their peril. Although land administration is highly technical, no amount of technical sophistication will neutralize the impact of adverse policies that push the concerned households into informal systems. Similarly, land administration provides important tools to implement policies. In fact, one reason why India has no shortage of bold land policy initiatives for the poor which look very attractive on paper but often cannot be implemented in practice, is the fact that its land administration system is weak in general and often It would be ideal to set up a technical working group to steer this process with the goal of producing results, to feed into a broad debate on this topic, in a 12-18 month time frame.
Allow private sector participation in surveying, focusing government on a regulatory role. Given the size of the gaps in spatial data and the limitations that make it difficult for the public sector to address them comprehensively, the almost complete prohibition of private participation in survey is surprising and inconsistent with international best practice and India's own experience in computerizing textual records.
Efforts to change this should focus on: (i) providing a regulatory framework for application of a range of survey methods with specified levels of precision; (ii) strengthening capacity in the private and the public sectors through a range of strategies including enhancing of capability and resources in the academic sector; and (iii) revamping survey processes, for example, shifting from paper-based to electronic ones to reduce costs and make the surveys more affordable.
Reduce stamp duty rates and explore the scope for replacing these with a land tax. There is little doubt EXECUTIVE SUMMAl1 that the high rates of stamp duty currently assessed on registration of land transfers push people into informality on the one hand, while reducing government revenue on the other. Reducing these rates, which are very high by international standards, is necessary to ensure the sustainability of any improvements made in land administration. To make such a step revenue-neutral, it may be useful to combine it with an increase in the land tax for specific groups, possibly sharing proceeds between states and local governments. While such a decision will not be easy politically, it is likely to have a more profound impact on India's land administration system than a headlong transition towards a title registration system.
Eliminate restrictions on land markets. All over the world, land rental markets allow rural dwellers to join the rural non-farm economy in a manner that provides those who stay back with access to additional productive resources. Indian evidence shows that rental restrictions reduce equity as well as efficiency.
It will thus be desirable to: (i) make leasing legal where it is currently prohibited and replace rent ceilings with regulations to facilitate rental markets instead of constraining them; (ii) allow transferability ofland by land reform beneficiaries at least through lease and also explore options to make the gains from such reform permanent; (iii) drop restrictions on sale of land to non-agriculturalists and on subdivision which have little economic justification; and (iv) review legislation on compulsory land acquisition and, subject to the prevention of undesirable externalities, allow farmers or their representatives to negotiate with and, if desired, transfer land directly to investors rather than having to go through the government and often receive only very limited compensation.

Complement restrictions on tribal alienation with flexible mechanisms providing them with property rights.
While there is little doubt that alienation of lands through distress sales is an extremely undesirable ··~ outcome that should be avoided, increasing rates of tribal landlessness suggest that regulations are often not effective in preventing it. In the short term, the most promising way to reduce tribal land alienation is likely to be effective safety nets, something that could possibly be combined with mechanisms for communities to have a greater say in whether or not land should be transferable, such as a right of first refusal or community consent for sales. Providing tribals with real property rights, either individually or as a group would, in the long term, make a more important contribution to

Introduction
In India, land continues to be of enormous economic, social, and symbolic relevance. The way in which land can be accessed and its ownership documented is at the core of the livelihood of the large majority of the poor, especially in rural and tribal areas and determines the extent to which increasingly scarce natural resources are managed. Land policies and administration are critical determinants of the transaction cost associated with modalities to access land for productive, residential, and business use and, through the ease of using land as collateral for credit, the development of the financial sector. Land is also a major source of government revenue and a key element for implementing government programmes. This implies that land policies and institutions will have a far-reaching impact on the ability to sustain India's current high rate of growth, the extent to which such growth reaches the poor, and the level and spatial distribution of economic activity.
At the same time, the policies put in place by different states and the institutions tasked to implement them often fail to live up to the importance of the issue. In fact, land administration institutions seem to impose high costs without generating commensurate benefits and are generally perceived as corrupt, mismanaged, and lacking transparency. With land reform policies having largely run their course, and CHAPTER growing evidence that restricting land rental may do little to help the poor, many observers have lost confidence in the ability of land institutions to contribute to the welfare of the poor or the potential for improving the performance ofland administration.
In this chapter we first show that land administration in India does indeed have shortcomings but also use data from India to show that addressing the shortcomings of the land administration system is necessary. We then highlight some of the recent success stories to argue that doing so is entirely feasible but only if, in addition to focusing on technical aspects, a number of policy issues are addressed as well.

WHY ADDRESSING LAND ISSUES IS IMPORTANT
Land is of critical importance for the poorest and most marginalized sections of society whose main livelihood continues to depend on agriculture and who may, for a variety of reasons outside their control, have very insecure or non-existent land rights. This makes it difficult for them to fully utilize their productive potential, thereby reducing their welfare and their ability to accumulate assets. Even if land has been surveyed, the complexity and high cost of services by the land administration system may prompt potential D I A-LA N D P 0 L I C I E S F 0 R G R 0 W T H A N D P 0 V E R T Y R E D U C T I Q.
users to opt for informal arrangements rather than use the official system. In fact, various observers have recently drawn attention to the fact that an illfunctioning system ofland administration, together with a second-best policy regime, that is often both a cause and a consequence of the latter, can also seriously reduce overall economic growth. The main focus of the analysis in this report is on the rural economy. However, we report some studies to highlight the broader importance of the topic and to emphasize that the distinction between rural and urban is to an extent artificial and that, the need today is for a national land administration system, based on a legal and institutional framework that is sufficiently flexible to accommodate the needs of both rural and urban areas.
Lack of land rights. Given the way in which land rights were settled by the British, numerous households in marginal areas remain without any rights to land that they have owned for very long periods of time.
This not only reduces their incentive to invest in the land and manage it sustainably but also their ability to obtain credit for doing so. In addition to reducing productivity, investment, and welfare, it also implies that, in case the land is needed for other purposes, they may not be legally entitled to any compensation. The areas involved are often very large; for example, many tribals in southern and western Orissa are cultivating land on the hill slopes without any title because the survey equipment used at the time was unsuitable for land above a gradient of 10 degrees which was categorized as state-owned uncultivable wasteland, despite the fact that much of it is possessed and cultivated by tribal households (Saxena 2005).
In fact, 7 4 per cent ofland in scheduled areas of Orissa is categorized as state land, with 26 per cent and 48 per cent being revenue and forest land, respectively (Kumar et al 2006). Similarly, in Madhya Pradesh, the status of a total of 12,395 sq km or more than 3 million acres, the so-called 'orange areas', is disputed, preventing those cultivating them from obtaining ownership (Upadhyay 2006).
The challenge of informality. Complex and costly procedures of land administration together with legislation that completely prohibits land leasing or imposes strict conditions on it often have the result of driving the poor into informal arrangements. This not only deprives them of formal recognition but also makes it difficult for them to access formal credit and other government programmes. For example, in Tamil Nadu efforts to provide targeted payments to producers in compensation for increases in electricity rates remained ineffective as producers found that it was too cumbersome to update their land records which were intended to provide the basis for the scheme.
Non-agricultural land prices in India are among the highest in the world. Data suggest that inefficiencies of the land administration system, together with the reduction in supply due to land policies and land use regulations and the fact that large tracts of land are under litigation drives land prices up. All these factors contribute to the fact that, in relative terms, land in India is amongst the most expensive in the world. As Figure 1.1 illustrates, land in New Delhi is more than ten times as expensive as that in Tokyo and 50 times more expensive than that in Kuala Lumpur. Within the region, this is likely to translate into a significant comparative disadvantage for Indian business. Difficulty in gaining access to land, as recently reported in the press for a number of Indian cities, will also limit the country's ability to attract new businesses. in the world; India ranks 123 out of a total of 140 countries included in the data (World Bank 2004). 1 This is due to three elements, namely (i) high stamp duties; (ii) the need to comply with complex regulations; and (iii) the time and money spent on procedures that are often duplicative or inefficient. The fact that the first two are largely a result of policy rather than the efficiency of the land administration system highlights that, in addition to improving land administration, policy reform will be a critical element of any effort to sustainably reduce the cost of transacting property. In fact, given the magnitude of stamp duties, increasing the efficiency of land administration institutions alone may be insufficient to ensure that transactions are brought on record. Corruption in land administration is pervasive. Overlapping institutional mandates and ill-defined processes, together with high land values, provide ample opportunities for corruption. Indeed, an independent study confirms that land administration fails to command the respect of citizens; in fact it is considered the least transparent and second most corrupt public service in the country, in the same group with the police and the lower judiciary. Of the households in the study interacting with land records or registration departments, 48 per cent had to pay a bribe, with the total amount of bribes paid each year estimated at Rs 3126 crore (Transparency International India 2005). Almost two-thirds (62 per cent and 63 per cent, respectively) of respondents felt that corruption had increased over time and that there was no commitment by government to reduce corruption in land administration. Figure 1.2 uses state level figures to illustrate that the share of households that had to pay a bribe when interacting with land administration institutions was below 50 per cent in only six out of the 20 states included in the sample, Kerala (29 per cent), Gujarat and Maharashtra (39 per cent), and Himachal Pradesh, Punjab, and Chhattisgarh (46--48 per cent). More significantly, in all the states with the exception of Tamil Nadu and Kerala-where only 37 per cent and 33 per cent perceived that corruption was on the increase-more than half of respondents felt corruption to be on the increase rather than stable or on the decline. 2 Land-related conflicts tie up huge amounts of resources. In addition to the cost ofland administration, ambiguities in the system, in particular a weak or non-existent spatial framework and inconsistencies between different parts of the system, significantly increase the likelihood of land-related conflict.
Estimates suggest that of the worryingly high number of pending civil cases-20 million in lower courts and 3 million in state high courts (Debroy 2000)almost 40 per cent pertain to land. A small pilot study from non-tribal areas in Andhra Pradesh points towards modest levels ofland-related conflict in rural areas (where 2 per cent of plots were affected), as compared to very high incidence-affecting 28 per cent of all plots-in peri-urban environments. To the extent that these figures can be taken as representative, resolving land cases speedily would not only allow courts and those currently involved in litigation to spend their time on more important and productive matters but also make available a huge amount of high-value, peri-urban land for productive investment and development. High incidence of conflict is also likely to be found in tribal areas due to inefficiences related to the prohibition ofland alienation by tribals. functions, and information across departments as a second best option. Initiatives, such as the national e-govemance project that aims to establish connectivity, will provide the basis for doing so. Given the current plans for roll-our of the necessary infrastructure, broad connectivity is likely to be more widely available in a few years and it will be important to utilize the intervening period to establish processes and make the regulatory changes needed to implement them once they become available.

WHY THERE IS SCOPE TO ADDRESS LAND ISSUES
In addition to the lessons noted above, the successful computerization of textual records has also helped to demonstrate the intimate link between policy issues and land administration in two ways. On the one hand, a number of policies, in particular high stamp duties and land reform and land use regulations that tend to drive users into informality have been shown to pose a threat to the sustainability of efforts to modernize the land administration system. On the other hand, policymakers may not be aware of the potential benefits of having in place a comprehensive and well-functioning system of land administration not only for overall economic activity but also to implement policies and programme in a more costeffective and often also efficient manner.
India's remarkable progress in improving the land administration system is unlikely to be sustainable, and prospects for realizing the vision of an integrated and effective institution will not be achieved, unless a number of key policy issues that have emerged as major constraints are addressed. First, levels of stamp duty that are extraordinarily high by international standards will continue to drive transactions underground and thus undermine the completeness of the registers.
Second, an outdated regulatory framework that leaves little space for private-sector participation and precludes the use oflow-cost modern technology for surveying, makes it impossible to generate spatial information at a cost that will allow land administration to reach out to the poor and marginalized (whose land rights have long been neglected). Finally, legislation, most of which is associated with past land reform effons, seriously limits the incentives for individuals to truthfully declare their land holdings (instead of say, registering land in the name of non-existent persons) and ways to deal with such situations.
Modifications to the legislation may be required to modernize the land administration system in a way that is sustainable and allows it to realize its potential.

PLAN OF THE REPORT
The main purpose of this report is to present new empirical evidence on land administration and land policy, as well as the possible interaction between the two, to derive policy conclusions. The empirical basis for the discussion ofland administration is provided by a review of land records, survey and settlement records, and land registration in 14 states. Chapter 2 describes the origin, nature, and main functions of current institutions and the ensuing problems for secure tenure and the easy transferability ofland.
Chapter 3 identifies elements of a 'best practice' INTRODUCTION approach to improving textual data (records and registration) and, based on a review of states' experience, identifies the associated benefits. In both cases, the evidence is used to identifY unresolved issues that should be addressed by pilots and to identifY criteria and indicators of performance that could help make centrally sponsored schemes more effective. Chapter 4 reviews the extent to which lessons from improving textual records could help to give a boost to improvement of the spatial database for land administration, an area that has thus far been largely neglected (not surprising in view of the cost and complexity of the issue) but that will require urgent attention if initiatives to have a system providing higher levels of tenure security are ever to bear fruit. Chapter 5 concludes the discussion on land administration by assessing the scope for title registration to help improve tenure security in India and by identifYing pertinent issues.
The key contribution of our discussion of land policy is that, for each of the policy issues of land reform, land leasing, and land sales markets, we pro-

Institutional Structure and Key Challenges
Land administration deals with the recording, processing, and dissemination of information about ownership, value, and use of land and the resources associated with it. It includes the determination of property rights and other attributes ofland that relate to its value and use, the survey and description of these, their detailed documentation, and the provision of relevant information in support of land markets (UNECE 1996). A land administration system that is affordable, accessible, and efficient will help to: (i) provide secure land tenure for landowners, thus encouraging them to invest and manage this asset in a sustainable manner; (ii) facilitate low cost transfers that allow land to move from less to more productive producers through rental or sale; (iii) provide a basis for the use ofland as a collateral for effective operation of financial markets; (iv) allow spatial planning for issues ranging from provision of infrastructure such as roads and utility lines to environmental protection; and (v) enable central and local governments to effectively implement programmes and collect revenue.

HISTORICAL EVOLUTION AND OVERALL STRUCTURE OF LAND RECORDS
One of the reasons why land administration in India often fails to live up to its goal is that most of the institutions and processes for administering land in India were adopted from the British at the time of independence and have been hardly modified since.
Land administration in India was decisively shaped by the fact that the British turned earlier mechanisms of land management into a tool for revenue collection. institutions and the quality of the records supporting these institutions, that continue to the present day (see Box 6.1). For example, cadastral maps in zamindari areas-where revenue was fixed permanently and maintaining records therefore did not offer benefits in terms of higher tax revenue-are generally less well maintained than those in ryotwari areas.

BOX 2.1: DIFFERENT TYPES OF SETTLEMENT
Depending largely on the political preferences in place at the time when a specific area was brought under colonial administration, the British adopted one of three land revenue systems: landlordbased systems (zamindari or malguzar~, cultivator-based systems (ryotwar~ or village-based systems (mahalwari).
Zamindari systems were established in Bengal, Bihar, Orissa, many parts of Uttar Pradesh, the Central Provinces (Madhya PradeshL and some parts of Madras Presidency (Tamil Nadu and Andhra PradeshL generally areas which have good quality soils and adequate rainfall. It effectively provided property rights in land to the landlord (zamindar) who in turn had to deliver a certain amount of revenue to the colonial administration while being allowed to keep any surplus for himself. In some areas, the level of revenue to be delivered was fixed in perpetuity under the 1793 'permanent settlement' while in others temporary settlements were revised after a number of years .. Also, while in most areas land records remained with the government, they were maintained directly by zamindars in Bihar. · Under ryotwari, which was adopted in most areas of the Madras and Bombay Presidencies and in Assam which generally had lower inherent agricultural potentiat revenue settlement was made directly with the cultivator (ryo~. To provide the basis for revenue collection, a cadastral survey, to be updated regularly through revisional surveys, was carried out and a detailed title document, called record of rights, was prepared. Tax liabilities were then calculated as the monetary value of a share of the estimated average annual output from the land. Under the village-based (mahalwari) system, which was adopted in the North-West Provinces and Punjab, village bodies were responsible for the land revenue. Depending on the nature of the village body, the final result could be similar to a zamindari system (if there was one big landlord) or a ryotwari-type arrangement with individual cultivators.
The primacy of revenue affected the coverage, nature, and evolution of the land administration system in three respects. First, to the extent that the main purpose of the system was to enable the state to collect revenue, it focused on use rather than ownership, and incentives for owners to keep records up to date remained limited. Second, there was limited attention to the spatial framework; and maps were prepared only with reference to the village and were infrequently updated. Finally, coverage was eclectic and land administration focused on agricultural lands only, thus excluding urban as well as marginal lands.
For the latter, there remain large tracts of 'unsettled' land which, although they may have been occupied by local people for generations, remain de jure under state ownership with the result that even long-standing occupants may legally be 'encroachers' who may be evicted or will not be eligible for compensation in case the land is needed for other purposes.
The basic structure ofland administration in any Indian state comprises four main institutions (see Figure 2.1). The land revenue department maintains the textual database for land records as well as tax registers where they exist and continues to collect land revenue but has historically taken on a host of administrative functions. The survey and settlement department is responsible for maintaining spatial data, mapping and demarcating boundaries, and executing

REVENUE DEPARTMENT
The key institution for managing land records is the department of revenue which has traditionally constituted the main interface between the state and the local population in rural areas. Its importance is illustrated by the fact that at the district and lower levels, revenue officials also assume judicial functions.
Institutional structure and types of records maintained  The khata is a tax record showing land revenue, cess, water rates, and other government dues to be paid by a cultivator and the amount paid in a given year.
The khata register is prepared once a year during the annual reconciliation of accounts by the village official.

Key challenges
With a gradual decline in the importance of land revenue as a source of government income, the revenue department has increasingly been settled with other mandates that are unrelated to its original focus on land administration. This made it difficult for officials to keep up the quality of service provision and was often associated with a significant deterioration in the ability of the revenue department to focus on the maintenance ofland records that had once been its core function.

Reduction of revenue and institutional overload.
After independence, the share ofland revenue in state resource inflows declined drastically, from more than 30 per cent in the late 1950s to less than 2 per cent in the late 1980s, as illustrated in

SURVEY AND SETTLEMENT
Even though it originally formed an independent department, the survey and settlement department in many states is now integrated with the revenue department, at least at the higher levels, as is the quality of the task performed. More importantly, as this shift reduced the emphasis on land records in the curriculum for public servants, many may no longer be familiar with the details of the associated documents, something that would, over time, lead to further decline in land record maintenance. To provide a spatial record of land ownership, the colonial administration carried out ground surveys with basic technology (plane table and crosstab) on a village by village basis, and without link to a national coordinate system. Transfers are reconciled in the textual records on an annual basis by the local administrator. However, the main mechanism to update cadastral maps was through periodic re-surveys that were to be undertaken once in a generation, that is, every 30 years. By then, population growth and inheritances, construction of infrastructure (for example, irrigation), and possible expansion of cultivation into adjoining public land implied that a revisional survey, combined with re-assessment of land revenue and generation of a new set of record of rights was probably cost-effective. The basic spatial records are as follows.
Field measurement books. In the process of the original surveys by the British, parcel boundaries and village limits were demarcated on the ground with monuments. Typically, for each parcel a field measurement book (FMB or tippan) was prepared on a 1: 1000 or 1:2000 scale, recording the plot's relative coordinates and distance measurements in chains, links, or other local units, thereby allowing computation of its area (see Figure A2.1). Each parcel was assigned a survey number unique within the village which allowed identification of parcel boundaries.
Village maps. The information recorded in the field books is used to compile the village map, usually at a somewhat smaller scale (1 :7920). This document contains boundaries of individual plots as per the original settlement or any revisional survey that may have taken place in the interim. As can be seen in Figure A2.2, main physical features, the location of parcels relative to each other as well as prominent topographical marks, are also included in the village maps. In some states, village maps were compiled directly using plane

Key challenges
The key challenge in the area of survey can be summarized in terms of three issues, namely: (i) the fact that, for a variety of reasons that include lack of resources and staff, revisional surveys that were intended to provide the basis for regular updating of the textual and spatial records in the original system, have not been carried out as specified by law; (ii) the fact that the survey department was neither responsible nor had established a regulatory framework for surveys in urban areas-particularly cities-where circumstances required establishment or updating of the map base, has led to the proliferation of a large number of map products that did not follow common standards; and (iii) lack of a systematic effort to expand the textual and spatial database for land administration into areas that had not been settled at the time of the original survey or to dose gaps that had arisen for various reasons.  crore. In view of this, whether or not emplacement of boundary stones is required will have a major impact on the cost of efforts to improve the functioning ofland administration in India.

LAND ADMINISTRATl
to current patterns of ownership and occupation may be tenuous or non-existent. In rural areas, a key reason for discrepancies lies in transfers and partitionsthrough inheritance or sale-that were either not recorded or not accompanied by a re-survey. 5 Given the decline in the collection ofland revenue, carrying out such re-surveys at the required speed and scale is no longer an option. A5 a consequence, the spatial framework for land administration even in rural areas has fallen into a state of disrepair. For example, in Andhra Pradesh the average survey is overdue by about 60 years (see Table A2.3), implying that in the average district the last re-survey was carried out around the turn of the last century and the situation is quite similar in other states.
Incompleteness and unclear responsibilities in urban areas. Given its original agricultural focus, the spatial coverage of the land administration system has considerable gaps in both urban and rural areas. In rural areas, large stretches of land were not included in original surveys for various reasons even though they may long have been under cultiv~tion. In urban areas, many of the cities which would be obliged to do so have not conducted city surveys, or have failed to update the surveys and the system of property cards that is supposed to be based on them. 6 Moreover, there is no obligation to have any record of land ownership, either spatial or textual, in habitations with populations ofless than 5000 which are home to the vast majority 5 In fact, the British realized that owners would have few incentives to either register their transactions or carry out a resurvey, implying that neither is mandatory, for example, in case of inheritance. This system works well as long as the cycle of revisional surveys is maintained but breaks down without it. 6 In Bangalore, for example, the city survey only covers about 118 sq km. This leaves about 206 sq km to complete the villages declared to be part ofBangalore city which by itself is only a part of the wider Bangalore Metropolitan Area which covers 1357 sq km. Moreover the city surveys in Bangalore were undertaken in the 1960s and have not been kept up to date (Burns 2004 Lack of quality control and standards for data products. The lack of updating is most serious for urban areas that were previously part of a village, something that applies to the large majority of urban areas in India today. It is not too difficult to imagine that in these cases maps bear little relation to current settlement patterns. In the process of conversion, town development authorities, which normally acquire land for extension of towns, prepare layout plans which are then passed on to the municipal council. However, the latter has neither responsibility nor the incentives and capacity to maintain detailed data on land ownership. Developers or individuals can, of course, take the initiative of getting their plots surveyed but this is not a routine process and no cadastral maps to provide physical descriptions of plot boundaries are normally used in the process of registration or kept at the registry. Even in cities or municipal corporations that maintain maps or some other type of spatial record, the quality and reliability of such information differ widely. Clarification of responsibilities and establishment of clear standards, together with technical capacity to monitor their implementation, could greatly enhance the value of such maps even for land use and urban planning and for a system that could help to define property rights.

Stamps and registration
Administratively, the office of stamps and registration, which deals with registration of commercial 7 According to the 2001 Census, India has a total of 615,168 villages with a population ofless than 5000 (236,004, 158,124, and 221,040 with populations ofless than 500, 500-999, and 1000-4999, respectively (www.censusindia.gov.in). While the total population in these is not directly tabulated, a conservative estimate would imply that the figure is 753.8 million.

Main land-related functions
According to the 1882 Transfer of Property Act, any sale of tangible immovable property worth Rs 100 or more can only be made by registered instrument.
Structure and procedures for registration are governed by the 1908 Land Registration Act with state amendments. The importance of the department of stamps and registration derives from the fact that, upon registration, a fee proportional to the value of the property transacted has to be paid and that, with high rates, revenues from stamp duty have become a major source of revenue-amounting to about one-third of the total in a large number of states.
Registration ofsales and mortgages. Concerning real estate, the key function of the registration department is the registration of sale and mortgages, thus creating 8 In addition to registering property-related transactions such as sales and mortgages, the department is responsible for registering a large number of other instruments (wills, etc.) which we will not consider in the discussion here. This is justified by the fact that, in practice, transactions of immovable property account for the bulk of activity and certainly revenues in most SROs.

FIGURE 2.4: Structure of the registration and stamps department in Tamil Nadu
public record of the transaction. Documents to be registered must be presented in person at the SRO within four months of execution. The stamp duty to be paid for registering deeds ranges between 5 per cent and 12.5 per cent of the property's market value and is often somewhat higher in cities and municipal corporations than in rural areas (Table 3.2 in Chapter 3). In addition, a registration fee that ranges between 0.5 per cent and 2 per cent of the market value also needs to be paid. Registration of mortgages requires payment of the registration fee plus a share of the mortgage value (from 0.1 per cent to 2 per cent). Thus, with the decline in the importance of land revenue, income from registration fees has evolved as one of the major sources of income for states.
Supply of encumbrance certificates. The subregistries also supply, against a nominal processing fee, encumbrance certificates (ECs) that contain all registered dealings for a given parcel over a stipulated period. These certificates are usually prepared by manually going through the indexes of registered transactions. Having an encumbrance certificate for a long enough period 9 is important for purchasers of land to explore possible defects in the tide which a potential seller holds to a specific piece of immovable property, implying that the ease with which such documents can be made available will have a major bearing on tenure security. The EC is also relevant for financial institutions wanting to use a property as collateral for a loan to ensure that no prior and possibly superior lien has been registered on it. It is thus not surprising that this service is in high demand by the public and the financial sector. At the same time, 9 Typically 13 years or a period greater than the period set out the applicable Limitations Act (typically 10 years).

lA-LAND POLICIES FOR GROWTH AND POVERTY REDUC
frequent difficulties and inconsistencies with property descriptions on registered deeds and the fact that registration is not compulsory-and evaded to avoid paying stamp duty even in cases required by lawgreatly constrains the value of evidence from the registration system, irrespective of whether it is generated manually or via computer.

Key challenges
In practice, the effectiveness of registration is reduced by four factors: (i) high stamp duty and often opaque methods of valuing properties prompt parties to keep their transactions informal, with negative consequences for the completeness or integrity of the system; (ii) low efficiency and high cost of even routine operations act as further deterrent to formalizing transactions; (iii) lack oflinks to other parts of the property system reduces the security which registration can provide even under optimum conditions; and (iv) the fact that registration neither ensures legal validity of a transaction nor provides parties with strong assurance as to the validity of the transaction, discourages registration. We discuss these in turn.

High transfer taxes push transactions into informality.
Despite recent reductions of stamp duty by some states, rates remain, with an average of only slightly below 10 per cent of the value of the transaction, very high by international standards. This discourages formal land transa,ctions and leads the parties involved to avoid registration through various means such as powers of attorney and other side agreements, thereby reducing government revenue and threatening to undermine coverage by the land administration system. In the case of mortgages, a common practice to avoid payment of stamp duty is to enter into an equitable mortgage by way of deposit of title deeds rather than a formally registered mortgage.

Undervaluation and corruption. To avoid having
to pay high stamp duties, many parties resort to reporting land values that are significantly below those actually paid. The problem with explicitly or implicitly condoning such an approach in manual systems 10 is that values ofland have to be determined or certified by a government official who will often demand a fee for his 'service'.

Costly and complex procedures even for routine operations
Indexing and retrieval is difficult. Deeds are often lengthy and complex documents that may run over 40 or 50 pages, and specialist knowledge is required to decipher them and navigate the system. A plethora of state-specific land reform legislations and land use restrictions add to this complexity. Simplification of these laws could help to standardize deedssomething that is at present often not complied with even in situations where regulations exist-and thus help make the process of registering property more transparent and less costly. The registration system is governed by antiquated procedures including manual copying and indexing of documents by person rather than by parcel which increases the cost of obtaining information. High costs of obtaining information are particularly important in the case of ECs for mortgages where they could well result in a large number of otherwise credit-worthy borrowers being rationed out of the credit market. where many offices have to be contacted for official papers (Hanstad et al. 2006). 11 Simple improvements in information management could have far-reaching impacts on these performance parameters.

Duplicate and redundant processes
Institutional overlap. Many of the problems with land administration in India can be traced to duplication Property tax receipts, Khata

LAND ADMINISTRATION
that is induced by institutional overlap and which greatly increases the cost ofland administration. The main institutions involved in land administration, together with key data flows associated with dealings in land are illustrated in Figure 2.5. The figure illustrates the complex linkages between different subsystems and the fact that, at any moment, the system may contain a large amount of overlapping or inconsistent information. Local governments as well as the survey and settlement department are likely to use city surveys and tax maps on the one hand and village maps on the other for some of the same areas. Information on ownership of the same parcels of rural land may be available in the registry (ifland was transacted or a mortgage was taken out) or the RoR and the two will differ if land was transferred but mutation was not effected, although neither of them may be definitive. A5 a consequence, any person interested in entering into a transaction for land must conduct searches in the land record and the registry offices. In each of them, time has to be spent andofficial as well as unofficial-fees need to be paid.
Complex procedures. The difficulties resulting from institutional fragmentation can be illustrated by reviewing the processes that an individual transferring a parcel of (rural) land has to go through once he/she has tried to ensure that the transaction is legitimate. 12 First, the transaction has to be registered and stamp duty paid. Once this is done, the registration and stamps department gives notice to both the revenue and the survey and settlement departments by sending a document (J -slip) to do a mutation, as any registered land transaction 13 must also be recorded in the RoR/ record of tenancy and cultivation (RTC) or the property card in the case of agricultural or urban land, respectively. However, to mutate the RoR or to survey the property, the interested party has to approach the corresponding departments to take action. For a variety of reasons, which may include the purchaser's inability or unwillingness to pay the associated bribes or the corresponding department's lack of capacity, this may not happen. The result is a discrepancy between what is recorded in the registry and the RoR or the spatial records. Even if the process is followed through, the amount of time required is substantial, certainly not less than three months, and this provides considerable potential for abuse.

Inconsistencies create potential for ftaud and conflict.
Although estimates of the magnitude of discrepancies 12 In the case of urban land, the process may be simpler if property cards and city surveys are maintained in the same office.
On the other hand, in a large number of cases where one or both of these do not exist, the purchaser is left vulnerable to potential conflicts. 13 There are some types ofland transactions, inheritance being the most common of them, that need to be entered in the RoR but do not need to be registered.
between the different systems are difficult to obtain, a recent study shows that even in Andhra Pradesh, a state that is considered to be one of the more advanced ones, less than 40 per cent of registered transactions were followed by a mutation of the RoR and less than 30 per cent had a survey done (Agrawal2006).
While the extent to which this affects the quality of records more generally depends on the frequency of land transactions, the cumulative effects can be substantial, considering that in many states it has been between 70 and 100 years since the last survey was undertaken. Coexistence of the revenue and registration record systems duplicates effort and creates costs that do not correspond to any tangible benefit and can lead to mismatch of information regarding the same piece ofland. 14 This generates ample potential for fraud and land-related conflict which are near impossible to resolve and will overburden the judicial system. Responses from the World Bank's 'doing business' study reveal that such faults, together with the reason for inappropriate description ofboundaries are a key reason for land conflict. Depending on the state, these conflicts take between 3 and 12 years to be resolved, a period during which there is strong disincentive for undertaking any investment on the land concerned. given that the rationale for registration was generation of revenue, the registrar will, at least in principle, register any document put to him as long as the formal procedures are met and the appropriate stamp duty is paid. This means that the perceived benefits from having a transaction registered may be significantly lower than the cost of doing so, implying that landowners may opt out of the system.

Presumptive nature of registration and lack of cross-checks
No checking ofspatial data. The registry's inability to access and/ or easily refer to cadastral maps makes it very difficult for registry officials to perform even basic checks on the validity or legality of instruments delivered to them, making it near impossible to enforce stricter standards of accountability. This is exacerbated by the fact that the description of land parcels in many deeds may leave a lot to be desired in terms of providing an accurate location of the property, particularly in urban areas, something that greatly increases the possibility of future disputes. Thus the unsuspecting buyers who were not aware of the proceedings under the Ceiling Act (Saxena 2005).

LAND ADMINISTRATION
' l lsystem expends a huge effort to ensure the correct identification of parties to a deed (an issue that is regulated in minute detail) but virtually no regulation exists which is at least as relevant for the accurate geographical description of the land in question.

POLICY IMPLICATIONS
The complexity and overlaps in the land administration system put an additional strain on a system that already has difficulty in coping with demand and there is little disagreement about the need for improvement. In fact, states have launched a large number of promising initiatives aimed at addressing some of these problems.
Since the late 1980s, the central government, under the leadership of the MoRD, the MIT, and the National Informatics Centre (NIC), has provided invaluable technical and financial support and guidance to make innovations feasible and to transfer successful innovations to other states. Reviewing this experience will thus be critical to chart out a possible way forward for land administration in India.
Reviewing lessons from the efforts in the area of both textual and spatial records can provide some cues for ways to address the issues as well as more concrete policy recommendations.

Improving Textual Records Examples and Potential
It has long been realized that, given the large number of records involved, computerizing the textual records used in land administration could bring significant advantages and cost savings. In the late 1980s, the MoRD initiated a centrally sponsored scheme aiming to computerize land records that was later joined by an initiative for roll-out of promising e-governance initiatives by the MIT. Although success was limited, partly due to the limitations then still imposed by technology, very promising results have been obtained more recently. Review of states' experience with initiatives to computerize revenue records and land registries allows identification of the best practices for this process, the benefits from doing so, and the challenges that remain to be addressed.
In both cases, a number of factors were critical for success. All of the innovative solutions are the result of decentralized innovation that emerged in individual states-although supported with central fundingand subsequently adopted by other states. Also, in all cases, innovations were designed to draw heavily on India's strengths in IT, extensive use was made of subcontracting and PPPs to overcome weaknesses of the public sector, and the emphasis was on broad coverage and quick roll-out of viable innovations with a possibility oflearning from experience and adding more sophistication later, rather than designing a 'perfect' solution from the start.

LAND RECORDS
The RoR is not only an important document to prove land ownership but it is also required for a variety of administrative purposes, most importantly, taking out crop loans or insurance.ln a nutshell, computerization ofland records involves digitizing of the entire textual database, designing database software to manage these data and enter mutations in the records, and providing local access points (for example, touch-screen kiosks) where villagers can either obtain legal copies of these documents or view the records to check their status.
By reducing the official and unofficial costs of obtaining such records, this will reduce the outlays to be incurred by farmers and thus make it easier to, for example, access credit.

Status and benefits from computerization of land records
Status. Economic benefits and credit access. By ensuring availability of records in a kiosk for a nominal fee, This allows not only to comfortably cover operation but is also sufficient to pay back the initial investment which, in the case of Karnataka, had amounted to about Rs 24 crore (52 per cent on hardware, 32 per cent for data entry, and 15 per cent for training). The fact that in many cases, the entire investment has already been fully repaid illustrates that computerizing land records can be an attractive proposition even from a purely commercial point of view.
Platform for integration with registry From the point of view of the overall land administration system, one of the most important benefits of computerization is that it can be used as a springboard for back-office integration that has the potential over time to eliminate some of the current duplication of systems. Experience shows that, once records are computerized, it is not too difficult to electronically initiate mutations and have a system to monitor that these are actually followed through. If the registry is computerized as well, there will no longer be a requirement for two separate processes as all the information needed to start registration of a transfer and mutation of the records can be collected once, either in the registry or the records office. All that is then required is that the necessary regulations and circulars are passed to ensure that this is indeed feasible from a legal point of view.
In fact, a number of states, including Gujarat, Tamil Nadu, Maharashtra, and Karnataka, have moved towards such integration. While limited connectivity implies that this still has to be done via dial-up or even physical exchange of floppies or CDs, the availability of statewide wide area networks (WANs) will provide the basis for automating andre-engineering this process. Basis for updating the spatial framework.
Computerization of land records can also help to prepare the ground for a gradual transaction-based upgrading of spatial data which currently constitute one of weakest elements in India's land administration system. For example, in Karnataka an order requiring subdivision survey as a prerequisite for making any mutation in the records that involves a change in parcel boundaries was passed to this effect (Jaamdar 2006). The manual process used earlier is illustrated in Figure    Rl-revenue inspector. Source: Jaamdar (2006). of30 days, the whole process would be fully automated and, in case all the information is found in order, can be completed in a matter of minutes rather than months. More interestingly, once the system is in place, a number of functions (indicated in

Best practice
Abolition of manual records. Experience illustrates that, unless regulations are passed to give legal validity to computerized RoRs and declare manual records invalid as soon as the former are available (possibly on a district by district basis, once digitization has been completed), it may be difficult to make the transition towards computerized records. The reason is that running manual and digital records in parallel for any extended period of time, as is being done in some states, 1 is costly also, if in doubt, staff will always tend to use the system they are familiar with. In fact, in a number of states where manual records were not abolished, digitization of 100 per cent of the textual data and equipment of offices with expensive computers could not prevent computerized records from falling into disrepair. Having a clear timeline for discontinuation of manual records will not only eliminate the discrepancies, confusion, and uncertainty associated with parallel systems but also create the incentives for minimizing errors in digitization, something that has in many cases been further helped by the decision to outsource this task to a private operator. This is important because even in states where digitization is complete, delays in data verification can develop into a bottleneck. 2 Sustainable level of user charges. Rather than succumbing to pressure to make RoRs available below cost, the need for a financially self-sustaining model needs to be recognized from the beginning. In Karnataka, a user charge of Rs 15 was set and it was agreed that any user charges would be kept in a separate account, rather than letting them disappear into the government's general revenue. Although modest, 1 In Orissa, applications for issue ofRoR are sent to the tehsildar who then prints out the copy from the computer, sends it to the record keeper for verification with the manual records and, after this verification has been done, issues a certified copy. 2 Delays in verification of records, which may well be due to foot-dragging by the bureaucracy, have emerged as a key reason for the fact that, in Bihar, digitization of records has not been completed in a single one of the 22 districts and that there is a serious danger that land records will be already outdated by the time the process has been completed. One option of dealing with this is to provide computers and allow circles, some of which have completed digitization, to switch over to an automatic system, thus demonstrating the benefits from doing so to others.
Similarly, in Orissa, records for 157 out of the 171 tehsils in the state have been computerized but have not yet been verified. compared to the amount of informal payments that had often been required under traditional processes, revenue from fees was critical to make the project independent, financially as well as politically. Most importantly, it provided the funds needed for expansion into related areas and created the scope for having licensed private operators take over the running of individual kiosks. The importance of this point is illustrated by the fact that some states, for example, Madhya Pradesh, that originally started out with revenues from computerization going to the general budget are now in the process of establishing independent societies to use these resources.

Security features and audit trail.
Doubts about the accuracy of the data used or their integrity could easily jeopardize and derail the whole process of computerization. Thus, issues of data quality were given top priority right from the beginning and a highly transparent process was adopted in most states.
Two key elements critical for this are use of a state data centre where all the copies of the data would be held from the very beginning, and clear procedures for access control, biometric identification, and a strict audit trail to detect any tampering with the data.
In a number of states, for example, in Gujarat and Karnataka, a transparent process of data verification was implemented. This process drew on the active participation of users by giving them a free copy of the RoR within a set period (often 3 months) during which any irregularities and inconsistencies could be reported for correction. As a further precaution against unauthorized alteration of data or the use of records that are no longer current, regulation also established that only the original RoR, duly signed, would have legal validity, making photocopies unacceptable.
Putting data on the Internet. An increasing number of states (Madhya Pradesh, Orissa, and Rajasthan) now make land records data, in most cases those from a year before rather than the current one, publicly available on the Internet for viewing while others (Gujarat and Karnataka) which already use intranet facilities could easily follow this example. Doing so further increases transparency and users' confidence in the system and can help remove some of the secrecy that currently surrounds land records. In cases where problems are known to exist, this could be combined with a structured process to report and resolve any

Remaining challenges
Even though different states have made considerable progress in computerizing land records, the fact that others are still lagging behind points to the potential to apply some of the lessons learned.
Prioritization of contents and integration with other systems. RoRs in different states contain large amounts of information (cropping patterns, source of irrigation, soil quality, etc.) that were historically important for revenue purposes but have limited relevance for land ownership. Given the large number of land records involved, any additional data field to be digitized will have major implications in terms of the costs and logistics of the process. Inaccuracies in these fields can also impact the public perception of the overall system. It is, therefore, important to be selective and ensure that whatever information is entered into the computer is actually relevant for property rights in land. 3 The 3 For example, in Kerala, computerization of almost 95 per cent of an estimated 10.6 million records at considerable cost had IMPROVING TEXTUAL RECORI) digitization of redundant fields was not so much of a problem for the more advanced states. However, in states with a less favourable policy and institutional environment where the process remains to be completed, and given fact that a focus on computerizing the 'wrong' records can be used as a strategic move to derail the process, guidance on this issue is extremely important. Even if the cost of digitizing these data seems marginal, it will slow down the process and tie up resources that could be used more profitably elsewhere. Identifying a set of fields that are common with the registry and with other states so as to ensure inter-operability and portability of software has significant potential downstream benefits.
Extension to urban areas. Given  Institutional integration. Although computerization of records and registration has shown some impressive results, the current land record system is only the computerization of a very old system without any serious re-engineering of the underlying processes or an examination of the extent to which these may still be appropriate. Re-engineered processes that allow to achieve functional integration with registration and surveys that go beyond a mere computerization of old manual systems will be cheaper and more sustainable in the long term. Supporting well-defined pilots to provide guidance on some of these will be important to completely realize the benefits from computerization and should be a priority for the Go I.

Policy implications
Our review clearly points towards a number of best practices that are critical for computerization to be successful. The effectiveness ofGoi schemes to support these can be enhanced by incorporating the best practices (identified above) more systematically in the programme design and evaluation of proposals for funding. Specifically, computerization initiatives should be supported only if: (i) the information to be digitized is clearly relevant for landowners; (ii) a time bound plan for data verification and abolishing manual records exists; (iii) key elements of the process are outsourced to the private sector; (iv) there are plans to address concerns of data integrity in a satisfactory way; and (v) they are based on a business model that has the potential to fully cover operational costs.
Complying with such requirements will not be difficult; on the contrary, the ability to draw on the experience of states that have already completed the process is likely to allow 'latecomer' states to realize significant cost savings and efforts to make this experience more easily available may merit support.
Widely disseminating criteria for proposals to be eligible for Go I support up front will not only generate a broader debate that could be very useful in educating policymakers, but also provide a basis for accountability of government officials ex post by listing out expectations against which their performance can eventually be compared. Given the demonstrated revenue earning potential of projects in this area, it would be prudent to carefully examine the need for central funds and possibly make a more specific distinction between 'roll-out' activities which will eventually generate revenue of their own and 'pilot' activities that generate significant amounts of new knowledge and thus may warrant 100 per cent Go I financing. The ways in which these funds are rewarded (for example, through competitive grants mechanisms in the case of pilots) as well as the specific outputs to be expected could, in turn, be specified in more detail to ensure maximum impact.

MODERNIZING PROPERTY REGISTRATION: ADVANCES MADE AND CHALLENGES AHEAD
While starting from the other end of the spectrum, considerable progress in computerizing land registration has been made in states such as Andhra Pradesh (CARD), Maharashtra (SARITA), Tamil Nadu (C-STAR), Rajasthan (RajCREST), and Karnataka (KAVERI).

Benefits from modernizing property registration
Improved delivery of registration services. In the states that have completed the process, service level agreements and penalties in the case of non-performance have ensured that standards are vastly improved from those that existed before, these are regularly met, and the arbitrariness of valuation has been greatly reduced.
The experience shows that computerization can help to improve accountability by reducing the scope for demands for 'speed money' as well as discretional valuation of properties. Also, under the new system, search for ECs takes minutes rather than days and can in many cases be done through the Internet rather than through physical presence in the SRO. Although quantitative evidence thus far is limited, it is easier for banks to check a potential client's credit worthiness and should thus be associated with higher levels of credit access, something that is consistent with the recent large increase in mortgage lending that has been observed in India.

Increased number of transactions and tax revenue.
In Maharashtra, computerization has been associated with a 50 per cent increase in the number of registered transfers, from about 1 million in 1998-9 to more than 1.5 million in 2004-5. Stamp duty collected during the same period has more than doubled, from Rs 1624 crore toRs 4137 crore, despite a significant reduction in the rate of stamp duty (from 13 per cent to 8 per cent) that was undertaken gradually before 2004. We must also note that so far reductions in stamp duty have been implemented only in states (that is, Maharashtra, Kama taka, and Andhra Pradesh) where the registry is fully computerized. While this correlation

IMPROVING TEXTUAL RECO
is not enough to establish causality, it suggests that an automated registry can make it easier to implement such changes. In all cases, reduced rates were associated with increased total stamp revenue, suggesting that informality is not insurmountable and that citizens are likely to be willing to pay 'reasonable' amounts of taxes in a hassle free and predictable environment for good service. Encumberance certificates. Operation of a fully automated registry in an environment where registration is compulsory will, over time, lead to the accumulation of evidence that would allow ready issuance of ECs by computer. To make this service available immediately, digitization oflegacy data for an appropriate time period is necessary. Tamil Nadu and Andhra Pradesh have done this for 18 years, with efforts to digitize legacy data and automate supply of ECs ongoing also in Rajasthan and, on a more limited scale, in Karnataka. Although empirical evidence on impact is still limited, the ability to verifY whether a property has a lien in a matter of minutes through the web will not only make it easier to transact property but also ease the burden of financial intermediaries who want to approve loans.
Basis for forther integration. Similar to the case of land records, states that have computerized the registry have embarked on a range of innovative ventures including: (i) establishment of a link between the registry and land records systems (on a pilot basis in Maharashtra and Gujarat); (ii) allowing registration from anywhere rather than the particular SRO in whose jurisdiction the property is located in Rajasthan; (iii) application for ECs through the web rather than via personal presence in Tamil Nadu; and (iv) remittance of stamp duty through franking and banks. The fact that the impetus for making some of these improvements originated in response to the new system illustrates that it may be better to first introduce a limited innovation and then expand rather than to develop a full-blown solution only to find out that it is inappropriate.

Best practice elements
Process re-engineering. Development of SARITA in Maharashtra (which sparked many the other states' initiatives), helped to considerably simplifY the process of registration by clearly defining the requirements for a 'complete' document that can be registered, determining upfront the fees and charges, designing simple forms, accepting only complete documents, and immediately returning incomplete documents with a written explanation of the reason for rejection.
This facilitated the use of an automated system for scrutiny, checking of supporting certificates, and the immediate scanning and archival of data. Furthermore, to reduce other forms of discretion, time limits for every activity were set, which in the end reduced the time required for the registration of standard cases to less than 30 minutes.
Private sector involvement. It was realized that undertaking the Maharashtra project within the public sector would run into formidable challenges, including a high initial capital cost of about Rs 20 crore that was difficult to obtain, given the precarious state of public finances; lack of technically savvy staff to maintain and upgrade hardware and a poor record of the public sector in running computer centres; a diversion of government employees from their core roles; and the danger of strong resistance. To overcome these problems, the project was outsourced to private vendors on a build-operate-transfer (BOT) basis. The private partner supplies and installs the hardware and peripherals needed, keeps the set-up at all locations functional, ensures data entry and scanning of original registered documents, and complies with specified performance standards against a share of the user fees. where, due to low transaction volumes, the expected volume of business is not sufficiently high to make operation attractive for a private operator, illustrates that it is better to address these issues upfront.

Remaining challenges
The examples above show that innovations introduced in the context of computerizing the registry have the potential to address many of the issues that may undermine the credibility of the land administration system. Building on these advances to maintain and, where necessary, further improve the reliability, credibility, and completeness of the information In addition to adhering to the above principles, political support from the highest level, including pronouncements by central government will, therefore, be important in overcoming such resistance.

Policy implications
The fact that, despite the considerable potential commercial benefits, the process of automating

Improving the Status of Spatial Records
One of the unusual features of India's land administration system is that a large part of the information used on a daily basis is actually based on textual rather than spatial data. While this allowed India to make much more rapid progress than if it had first tried to sort out its graphical database, running a land administration system without maps is clearly not sustainable in the long term. Finding cost-effective ways of updating the spatial records, many of which are in much worse condition than textual ones, is thus of high importance. Specifically, it will help to: (i) reduce boundary disputes which are already appearing in increased numbers in periurban areas; (ii) unambiguously identifY land parcels over which rights are recorded and thus allow users to have more confidence in the information provided by the system; and (iii) identifY and subsequently devise strategies for eliminating gaps in the coverage of textual and/or spatial records and in so doing also provide a basis for the more sustainable management of public lands.
In this chapter, we argue that applying the principles that helped to underwrite the successful computerization of textual records can also provide a basis for the improvement of spatial records. To do so, we show that failure to adhere to these principles is a key reason for the lack of success of the large majority of pilots which India has conducted in the area of surveying. We then highlight that a combination of satellite imagery with existing spatial data (village maps) can be used to provide an index map that will allow states to obtain near-complete spatial coverage at a very reasonable cost. Doing so would allow policymakers to: (i) quickly obtain an overview of the problems encountered in different areas of the country that could serve as a basis for assessing the needs in terms of improving spatial data; (ii) devise strategies, based on a wide range of modern technology, to address these problems in a way that uses existing data and India's IT capacity in innovative ways; (iii) get at least a rough idea of the types and possible magnitude of benefits from improving land records, that can help to realistically estimate the potential for cost recovery and, in turn, for potential private sector involvement; and (iv) use all of this information to take decisions on the allocation of public funds for improvement of spatial infrastructure that would not only fit into a broader strategic framework but also allow the development of private sector capacity to complement the expertise already available within the government.

LAND ADMINISTRATION: RATIONALE AND STATUS IN INDIA
There is little doubt that a well-defined spatial framework is needed to eliminate ambiguity in the system, thereby avoiding boundary disputes and increasing tenure security, in addition to providing other benefits such as the ability to search by geographical location and facilitate planning for infrastructure, and the provision of other services.
Moreover, a defining characteristic of well-functioning land registration systems, whether based on title or improved deeds, is that they allow the unambiguous identification of land parcels.
Having a spatial reference will enable the mapping of the the parcels over which rights are recorded in the textual register, thus ensuring completeness, that is, all land parcels are indeed identified, and there are no gaps or overlaps of the parcels for which rights are registered. This also provides a framework to record changes in parcels, for example, through subdivision or consolidation. This framework can either be in graphical or digital formats and can be useful to validate textual data, identifying, for example, parcels where numerical data are not available. Spatial data can also be used to support common registration queries, such as quickly identifying parties with interests in adjoining parcels for service of notice as well as other broader spatial queries such as the identification of land parcels impacted by possible future development activity. The cadastral spatial data can also be integrated with other spatial data such as topographic data, satellite imagery, etc., to support broader objectives such as the formulation of land policy and better land management. The spatial framework can support user-friendly graphical means of accessing the data by plot. Many people will not know their survey numbers, but most will be able to identify their holdings on a map. The use of spatial map data also readily supports a graphical Interface with land records on computers or the internet. implies that precision in actual use is well below potential and that the sustainability of the data is not assured. 4 It will, therefore, be critical to carefully identifY the strengths and weaknesses of specific technologies in specific contexts and to apply a judicious mix that is most suitable for specific situations.
A second and more fundamental concern is that technology is embedded in a broader institutional environment and that before narrowing the discussion down to technology and accuracy of surveys, it will be necessary to clarifY: (i) the role and responsibility of the state vs that of individuals in maintaining the spatial framework; (ii) the scope for private sector involvement; and (iii) the way in which public funds should be allocated. To do so, we first identifY some of the reasons why past efforts had only limited success and then aim to draw some lessons from this experience.  To put India's regulatory regime into perspective, The issue of how much latitude to give to the private sector has been a concern for governments all over the world. The following passage, which is almost literally taken from the guidelines elaborated by the UNECE WPlA highlights insights from Eastern European countries on this topic. Land administration activities lie at the heart of good government. Nations are defined by their land coverage and land represents the source of wealth and the basis for economic prosperity. It is, therefore, axiomatic that land administration represents a key group of public activities. But with proper safeguards and good management, it is possible for specific activities to be transferred to the private sector under PPP arrangements. There are many examples of this in relation to licences or concessions granted to surveyors. In addition to the general principles guiding PPPs in land administration, there are a number of key principles relating to such arrangements.

WHY PILOTS WITH 'MODERN TECHNOLOGY' HAD LIMITED SUCCESS
1. Governments retain final responsibility for the discharge of all public tasks. Even in licencing or concessionary arrangements, the government will, at least in the public perception, be held ultimately accountable for performance and liable for the consequences of any errors or mistakes. At the same time, private partners should be made fully responsible for their activities, including liability for poor performance or mistakes.
2. If the government wants to assign a public task to a third party, it should specify, ideally by regulation, the requirements to be met to ensure proper implementation. Such regulations should comprise: (i) professional standards (education, training, ethical behaviour); (iiJ exact competencies; (iii) indicators for performance measurement; and (iv) liability, including financial and other penalties (for example, revocation of licence) for failure to meet performance standards or mistakes. These requirements should be included, possibly in a more explicit form, in the licence or concession.
3. The government must make appropriate arrangements for monitoring and auditing performance by the private partner. Such arrangements may be included within the licence, concession, or statutory regulation. The extent to which the government retains control will need to be carefully examined in light of the specific functions to be carried out. While 'hands on' control by government may provide assurance, it must be avoided as it comes at the cost of stifling the innovation and initiative which the government is seeking from the private partner. As illustrated in Box 4.1, these principles include: Still, the fact that private sector involvement has allowed most of the transition countries to build a well-functioning surveying sector in a relatively short time period suggests that this route could also be an option for India, especially in view of the fact that these principles are not qualitatively different from those applied in digitizing textual records.

IMPLICATIONS FOR INDIA
To meet these challenges and develop a sustainable model for spatial data, it is necessary to strengthen the regulatory role of the government and take active steps to expand the surveying capacity at the ground level while at the same time putting in place a more comprehensive but low-precision framework that forms not only the basis for prioritizing among potential areas to improve the spatial framework but can also be improved upon by private parties, for example, through subdivision surveys. Running pilots that would explore technology options in specific cases would accompany both of these purposes. Doing so would have the following advantages: (i) the limited public sector capacity would be focused on establishing the regulatory framework and providing basic public goods; (ii) instead of focusing only on areas that have already been surveyed, as is implicitly being done in the current system, the criteria for surveys will be more transparent, and it will be possible to bring equity considerations to bear and at least offer scope to deal with the urgent need of surveying the many marginal lands that were not settled in British times; and (iii) it would reduce the cost of surveying to manageable levels by simplifying and modernizing the process and setting precision requirements that are affordable, given the existing technology.

Improving the coverage of the spatial framework
Use satellite imagery to establish digital base maps. In rural areas, the prime mapping tool should be highresolution satellite imagery, geo-referenced and preferably orthorectified. Although this imagery has a lower spatial resolution than ground or aerial mapping methodologies (0.6 to 2.5 m compared to 0.01 to 0.2 m for high-tech solutions such as ETS) it has a number of advantages that are likely to more than compensate. First, India has strong skills in the generation and processing of satellite imagery.
Moreover, contrary to all other applications, and especially aerial photography, data are likely to be available immediately at minimal cost. Second, the fact that the imagery is readily available should allow quick production of statewide base digital mapping in most states, with the possible exception of hilly and heavily vegetated areas.
Link to existing spatial information to establish a cadastral index map. There is little disagreement that the preservation of existing records is a key task for the public sector and many states have already started processes to digitize or vectorize existing village maps and FMBs (see Table 4.2). In fact, given the magnitude of the challenge, it would be prudent that, in trying to reconstitute the spatial framework, as much as possible use is made of the existing data. The digital IMPROVING THE STATUS OF SPATIAL RECOR  Deciding allocation of public survey efforts.
Overlaying the map described above with other layers-that can provide information, for example, about relative deprivation or the potential productivity of the land-will make it possible to make inferences

Pilots options for specific situations
As measurements undertaken in colonial days were surprisingly precise, the main reason for the maps generated then to become outdated is through unrecorded subdivisions or structural change such as urbanization. Having a statewide digital base map overlaid with existing village maps would not only allow quantification of the relative incidence of these situations but also help to devise strategies to address them.
Technical options. There is little doubt that, in order to establish a land administration system that is widely affordable, India needs a range of technology options, broader than that available in the past, allowing in particular for the extensive use of satellite imagery, aerial photography, and handheld GPS. However, even though the general range of precision that can be achieved with these technologies is well known, the

Mismatches.
A second situation likely to be encountered is that there is considerable mismatch between the ground situation and the entries in different types of records, for example, because of the desire of large landowners to evade land ceiling legislation. Once the magnitude of this issue has been determined, possibly helped by some simple local inquiries through the village officer, it will be possible to devise strategies to deal with the situation. Key issues are whether or not a systematic field verification exercise, to clarifY textual as well as spatial records, is required, how such an exercise would be financed, and what changes are required in the regulatory framework to allow it to be effective, that is, to be IMPROVING THE STATUS OF SPATIAL RECORDS ' " table to resolve at least the majority of conflicts on the spot. Pilots to explore these issues in concrete settings will be of immense importance for informing the policy process. Complete lack ofsurvey. One of the shortcomings of past pilots was that their focus was on land that had already been settled. As a result, certain types of land in Andhra Pradesh, Assam, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, and Tamil Nadu, especially those that had been part of princely states and those above a certain slope (1 0 °) were excluded from consideration. Although satellite imagery may not be the most suitable for these lands due to hilly terrain, covering these is important for equity reasons because it was essentially state action that deprived a large number of tribal households of their rights even though they had occupied and used the land. In fact, in 2000, the Government of Orissa decided to confer ownership to people in scheduled areas cultivating land up to a 30° slope and to carry out a special survey to demarcate the lands in question.
Not surprisingly, given the fact that the technology is not the most suitable for this type of circumstances, carrying out this survey with ETS proved unsuccessful.
Mounting a pilot with handheld GPS-a technology that is much cheaper and can be undertaken with much greater local participation, as it is less demanding in terms of manpower-would not only be an ideal opportunity to broaden the range of choices considered but also to develop procedures that could make a huge difference to the welfare of tribal populations all over the country.

Redefining and strengthening the· role of the public sector
Expanding availability of capacity. The fact that meeting the normal needs of day-to-day re-surveys already stretches current public sector capacity to its limits suggests that expanding the number of trained surveyors is critical. This will in the first instance require technical training. The experience of Andhra Pradesh where a collaborative effort between the survey department and local SHGs trained village youths to become 'barefoot' surveyors and subsequently acquiring a licence with the possibility of either being attached to local SHG federations or receiving a loan to start their own business-suggests that there are plenty of innovative options that can be explored to increase survey capacity not only in urban centres but also at the village level where the lack of surveying capacity is a significant bottleneck. Given that simple handheld GPS devices with 1-2 m precision are available at a cost comparable to that of setting up a computer kiosk, there is considerable scope to explore business models for entrepreneurial rural youth that could make use of this opportunity and

DIA-LAND POLICIES FOR GROWTH AND POVERTY REDUCTIONO
provide surveying capacity at the local level at a reasonable cost.

Regulatory .framework for private sector involvement.
Expansion of supply alone will not be effective unless it is combined with a regulatory framework that allows private surveyors greater independence from the public sector or, in the majority oflndian states, allows private sector activity in the first place. Focus public support on poor areas. The above is particularly important because India has large amounts ofland, especially in tribal areas, where no survey has been undertaken yet and where, as a result, property rights to land may be highly insecure or subject to appropriation by powerful private interests. While private surveyors will be able to cater to the needs of the better-offin areas with higher levels ofland values, especially if a regulation is put in place that allows a reduction in the cost of doing so, it is the poor groups which should be the focus of the government's efforts.
The benefits from doing so would be enormous in terms of poverty reduction, environmental protection, and possible local development. In addition, development of processes to deal with these issues will be important to prepare the ground and to effectively implement the provisions of the tribal land rights bill, once it is passed.

Towards Greater Tenure Security
From the very start, efforts to modernize land administration in India were not an end in themselves but intended to help increase tenure security and make it easier to transfer rights. While modernization of each of the subsystems is a necessary condition for such an impact, neither textual nor spatial records will be fully effective without an appropriate legal and regulatory framework. A key concern in this context has been whether and, if yes, when and how, India should make the transition towards a system of tide registration, often also referred to as a 'Torrens' system. This chapter briefly clarifies key differences between tide and deed registration systems and, based on a discussion of the options to improve deeds registration systems, highlights the trade-offs to be considered while deciding whether to make the transition to a title system, as well as the strategies available for doing so.

THE PURPOSE OF REGISTRATION AND THE DIFFERENCE BETWEEN DEEDS AND TITLES
The key function of a land registration system is to normally associated with a guarantee fund to facilitate payment of such compensation. By contrast, under a deeds system, it is B's responsibility to investigate the veracity of Xs ownership claims and C will be abk to demand restitution of the property from B, implying that B will incur the loss. In other words, under a deeds system, the cost of acquiring information about the ownership status of a particular piece ofland has to be incurred by the purchaser (something that may lead to a less than optimum amount of land market activity) while under a title system the state guarantees this information.
One common misconception is that the Torrens system of registration of title guarantees boundaries BOX 5.1: THE ENGLISH SYSTEM OF TITLE REGISTRATION In Britain, no system of land administration existed before 1862 when the land Registry Act, which introduced a voluntary system of land registration, became the law. The attempt to introduce land registration, however, failed as the Act's high accuracy requirement for boundary demarcation was too costly to comply with, in addition to prompting a large number of conflicts among adjoining landowners. After successive legislation, it led to the concept of registration with general boundaries in 1875, the use of the National Ordnance Survey Map (a very low precision map) as the basis for mapping land registration in 1897.
The land Transfer Act, which was passed in the same year, made registration of title compulsory in dealings with land in the County of london. Compulsory registration of title was extended to cover the rest of the country in a process whereby municipalities were progressively designated as areas for compulsory registration in case of sales. Since 1 December 1990, the whole of England and Wales has been subject to compulsory registration. Once an initial registration had been effected, all other transactions and dealings (for example, mortgages, creation of new rights of way, bankruptcies, leases, etc.) need to be registered.
The Chief land Registrar acts as a title insurer, taking responsibility even if the error or omission has not arisen as a result of a mistake by the land registry (for example, they unwittingly registered fraudulent documents) although the size of indemnity will be affected by the level of carelessness by the person involved and the registry has the possibility to sue the person who committed the fraud. This guarantee covers not only the land register but also any search certificates and official copies of registers and plans issued in response to a proper application. With a total of about 20 million registered (and 3 million unregistered) parcels worth about £ 3000 billion, the annual volume of transactions amounts to 4.6 million, plus more than 11 million enquiries. With a total annual income of £ 410 million, indemnity payments in 2003-4 amounted to £ 2.65 million.
in the sense of guaranteeing lengths of boundaries and areas of parcels. In fact, no title registration legislation expressly supports that notion and no case law supports it. To the contrary, many more modern title registration statutes expressly provide that indefeasiblity does not extend to the lengths, bearing, and areas of registered parcels. While boundaries that can be identified with high levels of precision may be an advantage, they are not essential for a tide registration system. In consequence, surveying and mapping can be undertaken with cheap, cost-effective methods. For example, in England, which operates on a tide registration system, attempts to require costly high-precision surveys failed (see Box 5 .1). Instead a system is used where many of the tide boundaries have not been measured but are what is known as 'general boundaries'. These boundaries are defined by pre-existing buildings, walls, fences, and hedges, rather than by fixed measurement. Cadastral maps then serve essentially as indexes to the land parcels and related tides as well as field measurements. They may or may not have legal status but, in case they have, they are guaranteed to correctly show only the relationship of the land to adjoining parcels and to other features such as roads and public land. This has the advantage that cadastral index maps can be compiled from the best available information, for example, tax maps in some parts of Australia, or regular topographical ordnance survey maps in England.

OPTIONS FOR IMPROVING A DEEDS SYSTEM
Before deciding whether or not to make the transition to a Torrens system, it is necessary to explore the options for improving the existing system. Based on our earlier discussion, the cost which a potential buyer has to incur depends on: (i) the completeness of the information contained in the registry; (ii) the ease of searching it; and (iii) the reliability of such information.

TOWARDS GREATER TENURE SECURITY
Having in place certain simple procedures to reduce these costs can greatly improve the value of a deeds system. These include: Compulsory registration. Registration may be made a condition of the validity of the deed by providing in the law that unregistered deeds may not be admitted in court as evidence of tide. Documents which are not registered can then be safely ignored and searching the deeds register, which can be automated by having computerized ECs, will enable anybody dealing in land to make sure that no material factor has been overlooked, thereby affording significant protection against concealed conveyancing.
Parcel-based indexing. Basic deeds registration systems are normally indexed under the names of the parties, rather than a unique parcel identifier, with cadastral maps not being used in the system and sometimes not even required as part of the documentation for the transaction. In virtually all countries where deeds systems operate satisfactorily, it has been found that an improved system using unique parcel numbers to identifY documents has less ambiguity than a system using changing names of grantees and grantors, making it much easier to review and assess all the documents required to determine the validity of a claim to ownership before entering into a transaction. Thus, while development of plans showing parcel boundaries, unique parcel identities, and cadastral index maps is a precondition for moving towards tide, it is likely to be required to improve deeds systems irrespectively of whether such a transition is planned or not. As the cost of surveying increases exponentially with the level of precision required, much hinges on the extent to which existing information can be used and the degree of accuracy required.

Standardization and computerization.
Computerization of tide abstracts as well as the links to cadastral maps, parcel-based indices, and examination of documents described earlier can greatly improve the quality of information provided by deeds registries · N DIA-L AN D P 0 L I C I E 5 F 0 R G R 0 W T H AN D P 0 V E R T Y R E DUCT I 0 N ·, and reduce the cost of searching them. A number of countries, such as the Netherlands, South Africa, and the USA use these techniques to run highly effective deeds systems that offer levels of protection that are equivalent to, or even higher than, those found in title systems where these are not effectively implemented or where a government guarantee is not feasible. While other jurisdictions, including Scotland and Hong Kong, decided to convert to a title system even from a well-established deeds system, there are little inherent advantages of one model vs the other and any decision will have to be based on the merits of the case at hand (Manthorpe 2004).

Examination of documents to ensure compliance with laws and regulations. The risks of a deed not
being properly drawn can be further minimized by requiring officials to check compliance with essential rules and making the registry liable for any damages incurred as a consequence of negligence and/or by having insurance. Insurance against defects in title for a property being transferred is a common arrangement in most states in the USA where title insurance companies have developed private deeds registers and which insure purchasers against losses as a result of a defective tide. Once a deeds system meets these conditions, the decision on whether to make the transition towards a full title registration system will hinge on three factors. First, there needs to be sufficient political support to effect the legal and institutional changes required for a title system (for example, for having only one land institution). Second, in addition to the need to ensure availability of higher levels of capacity required for maintaining a title system, a consensus about the social desirability of incurring higher cost of title registration is also needed. Finally, an important decision relates to the establishment of a guarantee fund without which a titling system will be not complete. After these issues have been resolved, a strategy for conversion has to be agreed upon.

MAKING A TRANSITION TOWARDS TITLE REGISTRATION: OPPORTUNITIES AND CHALLENGES
Qualified or provisional title. QualifYing the title in a number of ways can help to make a transition easier.
In situations where immediate issuance of an absolute title may not be possible due to constraints, qualified or provisional titles may provide an alternative. Under this system, which has been adopted by a number of countries, land is brought into the title registration system with limited investigation and a provisional title which is not conclusive, that is, that would still be subject to any interests existing in the land which may not be disclosed in the title. A search behind the title to preceding transactions is thus still necessary. However, the advantage is that the land can be dealt with using

2: CONVERTING FROM DEEDS TO TITLES IN SCOTLAND: A LONG PROCESS
In Scotland, land registers were established more than seven centuries ago to give citizens the power and protection of having their rights recorded and to reduce the scope of fraud. From 1876, so-called search sheets creating a parcel-based index map were introduced as a purely administrative measure that helped to greatly improve the security provided by the register as it was now possible to search by parcel rather than owner. Political pressure to introduce registration of title began shortly after title registration was introduced in England and a series of enquiries took place into the subject. However, 69 years passed between the report of the first Royal Commission on the subject (in 191 0) and the eventual passage of the land Registration (Scotland) Act in 1979 which provided conversion to title registration in a sporadic manner upon sales on a county by county basis, similar to the process adopted much earlier in England. Conversion has been a long drawn-out process and the last county was 'converted' to title registration only in 2003. Properties have to be converted to title only if they are sold or leased according to a well-defined process. 1 In 2004, exactly 25 years after the low had been passed, coverage of the land Register stood, with slightly more than 1 million registered titles, at 38.9 per cent, and 1.6 million titles remained to be registered. This implies that, in addition to the land register (of title), the Sasine register {of deeds) remains of great importance. land whenever it is the subject of a transaction, for example, by requiring that the party lodging the deed for registration be required to produce proof of a good tide which will be examined by the registry. The disadvantage is that conversion will be slow and not all land will be converted, as demonstrated by the case of England and Scotland (Box 5.2). Systematic conversion may be necessary if maintaining a dual system for an extended period of time is considered undesirable.
The key benefit normally cited in favour of title registration is that it will cost less to transfer land or access land-related information. While systematic evidence is scant, in Australia, conversion to title registration is said to have reduced transfer costs by to go to the cost and trouble of applying for title registration unless a large-scale development was planned. It was finally concluded that there needed to be some element of compulsion or automatic conversion for the change to take place within a finite time frame. about 50 per cent (Nettle 2006). These benefits need to be compared to the extra costs, at the collective and the individual level, that will not be incurred if a decision is taken in favour of an improved deeds system.

Institutional capacity and status of the current system.
Tide registration requires more complex registration procedures and more highly trained staff, both for first registration and for registration of subsequent transactions. As for legal issues, excessively optimistic projections can easily backfire. For example, Ghana made provisions for conversion from deeds to title registration in 1986. During the first 15 years, lack of resources and staff capacity, in particular to prepare and check survey plans, implied that only 11,000 titles were issued and no activity took place in most of the areas gazetted for systematic conversion. Depending on the status of the system, conversion is likely to require additional resources from the government or the landowner. Careful quantification of these oneoff costs incurred in the process of conversion, as well as the increments in regular registration charges arising in a title system vis-a-vis those incurred in the current system, and the manner in which the burden would be distributed between the public and private parties, is crucial before moving towards a title system. Guarantee fund. One key advantage of a title system for users is that it is usually associated with a government guarantee of title that is supported by an assurance fund. Such a guarantee will, however, require a source of funds, either from levies on registration fees with a government guarantee in case funds are insufficient, or directly from the government's consolidated revenue.
Impact ofinformality. Title registration systems are more dependent on registration, and failure to register has more serious implications in a tide registration system than under deeds registration. The reason is that, in a deeds system, registration can take place despite a gap in the chain of title caused by the failure to register preceding dealings. In a title registration system, dealings must generally be made by the existing registered proprietor or someone claiming ownership through a registrable dealing executed by the registered proprietor. Informality on a large scale can render a title registration system ineffective, implying that individuals need to have an incentive to register transactions, that is, perceive the benefits to exceed the costs from doing so. Unless these conditions are satisfied, or there is at least a process that makes it reasonably certain that they will be attained, shifting to a title system may prove difficult.
The above discussion suggests that, compared to an improved system of deeds registration, a title system will incur three types of additional costs. The first is the cost of reaching consensus and the expense oflegal drafting and possible delays associated with passing a law that would be required if one sticks with an

BOX 5.3: KERALA'S EXPERIENCE WITH 'TORRENS OFFICES'
To illustrate that the high cost of title registration can well constitute a deterrent, it is instructive to consider the experience of 'Torrens offices' in Kerala. In two districts of this state, Kottayam and Eranakulam, so-called 'Torrens offices' were established in 1995. In these offices, it is mandatory for applicants to have their land surveyed before registration, irrespective of whether or not a subdivsion is involved. The FMBs needed are prepared by licensed private surveyors and their quality is attested by the survey department. These are then brought by the applicant to the subregistrar and, with the registered deed, proceeds to the village office where the applicable registers, called Pokku Varavu and Thandaper are duly updated. While this has helped to ensure integrity of land records, the response has been muted as the cost is very high and landowners felt that too much of the onus for ensuring accuracy of records was put on them. The fact that, despite containing many of the best practice elements identified earlier, the approach was eventually unsuccessful suggests that, unless the cost of updating land records can be reduced, for example, through back-office integration along the lines being attempted now in Karnataka, or by lowering survey costs via less demanding standards of accuracy and a more competitive survey sector, requiring individuals to make greater efforts to keep their records updated may end up pushing them into informality.

IMPLICATIONS FOR INDIA
The above examples illustrate that it is generally easier to make the transition towards a title registration system if the existing system is already well functioning.  Note: Pilot stage implies that less than 10 per cent has been completed; roll-out means that 10 per cent-75 per cent has been completed; and near complete means that more than 75 per cent has been completed. Source: Price WaterhouseCoopers (2006).

Land Ownership Reform
Although improving land administration along the lines discussed above can have a significant impact on the welfare of those who own land, it will at best provide indirect benefits to the large number of households who are landless, without tangible assets, and may well be caught in a poverty trap. In India, policies to strengthen land administration will have to be complemented by considering opportunities for the poor to access land as a means of improving their asset status and livelihood. Land reform has long been a key element in the Indian government's strategy.
However, it is surprising that, in spite of the large amount of effort devoted to this policy, the amount of analysis of its impact on a national scale (as compared to case study evidence) has been quite limited. We use a long panel of households that spans the period 1982-99 to provide at least suggestive evidence on this issue and derive some implications for policy which, given that land is a state subject, can then be translated into policy by individual states.

JUSTIFICATION AND BACKGROUND
Researchers and policymakers are increasingly aware that the distribution of productive assets and the associated economic opportunities will have farreaching implications for long-term development to provide public goods that benefit all inhabitants (Cardenas 2003); and a link between inequality and destructive tensions and social strife that can directly and indirectly undermine the basis for economic growth (Conning and Robinson 2002).
There is also a large body of empirical literature on agricultural production which has shown that, due to the transaction costs involved in supervising hired labour (Carter 1984;Feder 1985;Eswaran and Kotwal 1985;Benjamin 1995), a farm structure based on owner-operated units is more efficient than one based on wage labour (Berry and Cline 1979; Binswanger

BOX 6.1: THE FAR-REACHING LONG-TERM IMPACT OF COLONIAL SETTLEMENT
In India the impact of the type of settlement was far-reaching as it affected the nature of property rights and incentives to invest in land, the distribution of wealth, and the structure of political power.
Differences in the security of property rights: In landlord areas, concentration of power in the hands of landlords made peasant property relatively insecure as any productivity-enhancing investments ran the risk of being expropriated by the landlord. In contrast, in the ryotwari areas, farmers had an explicit, typically written, contract with the colonial state, implying higher investment incentives. Incentives for public investment were reduced because the permanent nature of the settlement, together with the political power of zamindars, would have made it difficult for the state to increase rents. The colonial state had thus more interest in the prosperity of non-landlord areas which could be translated into higher rents, something that is indeed reflected in a much higher level of public investment in irrigation, railways, schools, and other infrastructure.
Differences in the distribution of wealth: Under landlord systems, landlords were given the authority to extract as much as they could from the tenants, and, as a result, they were in a position to appropriate most of the gains in productivity-for which they could use judicial and other powers vested in them by the colonial state. As the 19th century witnessed significant productivity growth, the landlord class grew rich and inequality increased. By contrast, in ryotwari areas, the British raised rents frequently to extract surplus from tenants and differentiation within the rural population remained more limited. The distribution of wealth is important because: (i) it determines the size of the group with enough wealth to be able to make lumpy or risky investments to raise productivity; (ii) it affects the balance between owner-cultivation and sharecroppers which in turn has implications for productivity; and (iii) it makes it likely that the political interests of the rural masses would diverge from those of the elite, in particular the support for programmes to expropriate the assets of the rich. Post-independence, this implied that political correctness may have focused more on expropriating from the rich than towards trying to establish public goods (schools, water, electricity) while the rich, who had mainly been absentee landlords, focused on salvaging their wealth or transferring it to urban areas rather than improving productivity and living conditions in rural areas.
eta!. 1995). Market mechanisms can, in principle, be relied upon to equalize the operational distribution of land holdings and thus help maximize production. However, high levels of transaction costs limit the scope for rental markets to do so while credit market imperfections, together with the collateral value of land, reduce the number of transactions in land sales markets and, even in cases where these have the highest shadow value for land, fail to transfer land to the poorest (Binswanger and Elgin 1988). To overcome these obstacles, appropriate ways of government intervention that provide land access to the most productive producers can have significant social and economic benefits (Chau 1998;Carter and Zimmerman 2000).
In situations where non-market forces have deprived the majority of the population from acquiring asset ownership, a redistribution of assets, even though it would improve efficiency and equity, is unlikely to be brought about through market forces alone (Zimmerman and Carter 2003). The potential productivity benefits from a more egalitarian distribu-

LAND REFORM IMPLEMENTATION IN INDIA
Given the inequality in the distribution of productive assets, especially land, which the country inherited at independence, land reform has occupied the centre stage in the Indian policy debate for a long time. Three main policies were used to implement land reforms (Mearns 1999).

Abolition of intermediaries immediately after
independence is considered to have been highly successful. By the end of the 19 50s, almost all states had enacted legislation to abolish intermediary interests that resulted in some 20-25 million tenantsmost of them in the zamindari areas of West Bengal However, in most states, implementation was slow and landlords were often able to resume self-cultivation with wage labour and evict large numbers of tenants to prevent them from gaining more permanent land rights in anticipation of such laws becoming effective (Appu 1997). include sharecroppers, implying that the extent to which they will benefit from protection depends on local discretion. The literature on land reforms in India and beyond is considerable (Warriner 1969;Thorner 1976;King 1977;Haque and Singh 1986)  line with earlier studies (Lieten 1996; Rawal200 1).
Attention to land reform is widely seen as one of the key reasons for the remarkable political stability in West Bengal. Use of state level data over time suggests that land reforms had a significant impact on poverty reduction, though not on increased productivity (Besley and Burgess 2000)-something that is interpreted as indicating that the poverty reducing impact ofland reforms will be worth the cost in terms of productivity (Besley et al. 2004  Initial conditions in high land reform states were worse than for those with low effort.

Growth effects
Positive impact on asset accumulation and consumption growth. To test whether land reform affected growth rates of income, consumption, and asset ownership,  This, together with a highly significant and negative coefficient of the landless dummy for asset accumulation (but not for other variables) could point towards the presence of credit market imperfections.
Although we find signs of conditional convergence, the initial land endowment, as well as household size, contributed positively to subsequent growth of income and assets.

Evolution of land reform effects over time
Reform impact declines over time: As in most states the bulk ofland reform implementation was undertaken shortly after the promulgation of the respective laws, it will be of interest to use our sample to assess whether the effectiveness of land reforms in bringing about growth and asset accumulation has changed over time.  (Binswanger et al. 1995). This has reached a point where deregulation ofland rental and rural labour markets is seen as a key obstacle to achieving a smaller-scale production structure that can in time, and with appropriate policies such as credit for land purchase also help to address the problem of latifundismo (Rezende 2005). Similarly, in the Philippines, a long drawn-out process ofland reforms that entailed a very low limit on operational land holding, together with prohibitions on land leasing, is found to have negatively affected land lease as well as rural credit markets, thus severely reducing private investment in rural areas up to the point where it has been accused of trapping many rural households in poverty not only because of investment disincentives but also because of the inability of beneficiaries to increase their holdings even through rental (Fabella 2003).

OTHER OPTIONS TO INCREASE LAND OWNERSHIP AND ACCESS BY THE POOR
Our results suggest that providing land access to the poor can have a significant and very positive impact, thereby vindicating the emphasis on redistributing land in post-independence India. They also support the notion that land has a broader social and cultural relevance. At the same time, they imply that the legal mechanisms that have been used to redistribute land earlier are no longer very effective and that their continued maintenance may have to be re-thought.

Regularization of government land
There is little doubt about the potential to regularize occupation on government land, either by giving provided information that subsequently allowed the state to distribute a total of325lakh acres to 2.4lakh beneficiary households (Raju et al. 2006). It is likely that a systematic review will lead to similar results in other states.

Land purchase
One of the key justifications for land reform has been the insight that, to achieve sustainable poverty reduction, government programmes should not only provide temporary relief bur transfer or help in the acquisition of assets. Agricultural land is no{ only an asset that can generate self-employment, utilize unused family labour in the most productive manner to produce for self-consumption as well as marketable   Reduction Project (RPRP). 10 Obviously, these benefits could be further increased through an appropriately designed system of user charges.

Strengthening women's rights
One issue which has often been neglected in the past relates to land tenure security, in particular inheritance rights, for women. This is surprising because the negative impacts of limitations on Indian women's ability to inherit land have long been recognized (Agarwal 1994). The 2005 HSAA (see Box 6.2) demonstrates that policy change even on such a controversial issue is feasible and the challenge now is to disseminate these rules and ensure their implementation. If those affected are aware of legal provisions and are confident that they will be implemented, the implications of this change, which is comparable to reductions in stamp duty if land is LAND OWNERSHIP REFOR

BOX 6.2: THE 2005 HINDU SUCCESSION ACT AMENDMENT-A FAR-REACHING CHANGE
The 2005 Hindu Succession Act Amendment (HSAAJ addresses a number of issues which in the past had negatively affected gender equality. First, it is clarified that all agricultural land is to be inherited according to the HSA, annulling earlier regulations in a number of states-for example, Uttar Pradesh, Delhi, Haryana, Punjab, and Jammu and Kashmir which together are home to more than one-sixth of India's population and gave primacy to male descendants. Second, sons and daughters are now both independent coparceners with shares of the property that cannot be willed away. In particular, daughters have rights equal to those of sons in residing and obtaining a share of the parental dwelling house. Finally, widows of a predeceased son or of a predeceased son of a predeceased son or a brother can get an equal share of the land and non-land inheritance even in cases where they have remarried, something that had not been possible earlier. The HSAA demonstrates that not only is policy change possible even on a contentious topic but also that such change can affect a huge number of individuals and with far-reaching multiplier effects. Even where the income derived from the land in question is small, a woman's ability to access (or the prospect of being able to access) her own regular stream of income will affect her bargaining power within the household and the way in which resources in the household are spent. Although no analysis of the impact of the HSAA is available, evidence from India points towards significantly lower rates (18 per cent vs 48 per cent) of intra-marital violence against women who own property as compared to landless ones (Panda and Agarwal 2005); and having a greater share of household income going to women has been linked to higher spending on children's education and health (Quisumbing and Maluccio 2003). The implications could be far reaching, and possibly affect not only women's ability to start enterprises of their own but also the magnitude of dowry which is traditionally viewed as a substitute for a woman's share in her parental property. A more detailed examination of these benefits and the extent to which they depend on dissemination would be highly desirable. registered in women's name in a number of states, are likely to be far reaching. Possible impacts would include greater empowerment and bargaining power of women within the household but could also comprise an increased number of non-agricultural enterprise start-ups by them. Ensuring that dissemination of these changes is adequate to make women aware of their rights is a high priority.

Land Lease Markets
While one justification for tenancy legislation was land reform, that is, the desire to award property rights to tenants, a second motivation for adopting such legislation was that policymakers were concerned that, in an environment where land was virtually the only economic (and social) asset and possible tenants had few alternatives to make a living outside of agriculture, monopolistic landlords would abuse their position to extract the maximum rent from their tenants. As we have already seen, such legislation no longer transfers large amounts of land to tenants, therefore the rationale for its maintenance hinges on whether or not it provides effective protection to tenants. Exploring whether this is still the case and whether there are any other impact of land leasing restrictions on the poor are the purpose of this chapter.
Economic theory indicates that well-functioning

SOME STYLIZED FACTS ON LAND RENTAL MARKETS IN INDIA
Rental market activity has declined precipitously over time. India is one of the few countries where participation in, and activity of, rental markets has declined sharply since the early 1970s. As Table 7  Such a decline in rental activity is contrary to trends elsewhere. The decline in rental market activity observed in India is surprising in view of the fact that, virtually all over the world, economic growth has been 2 To the extent that households may not be willing to disclose their participation in rental markets in violation of existing legislation, the figures included in this table establish a lower bound on actual rates of participation and land rental market activity. As it is reasonable to assume that the tendency to conceal rental market activity has been constant over time, the evidence on changes still remains credible.
associated with a significant increase in the extent of rental market activity. It is instructive to contrast this decline in India with recent increases in such activity observed in China and Vietnam, both of which are now characterized by much higher levels ofland rental market activity than India. In Vietnam, the share of households renting in increased from 3.8 per cent to 15.8 per cent in the 5-year period between 1993 and 1998 (Deininger and Jin 2003). In China, the same variable increased from 2.3 per cent in 1996 to 9.4 in 2001 (Deininger and Jin 2005). This is surprising as, with much higher inequality and landlessness in India than in these countries, the potential for land rental markets to equalize preexisting inequalities in factor endowments is clearly much greater in India. It has long been known that in China, land performs an important function as a social safety net (Burgess 2001), thus allowing the government to minimize spending on social safety nets and instead invest in infrastructure construction. In addition, high levels of rental market activity in China played a key role in facilitating growth of the rural non-farm economy, allowing those who do not have a comparative advantage in agriculture to rent out their land to those who lack alternative opportunities (Deininger 2003).

EFFICIENCY AND EQUITY IMPACT OF LAND RENTAL: CONCEPTUAL ISSUES AND INTERNATIONAL EVIDENCE
Endowments and ability as basic determinants of market participation. To understand the rationale for land rental market functioning, let households be endowed with fixed amounts oflabour and land but different levels of agricultural ability. As it is costly to supervise hired labour in agricultural production (Binswanger et al. 1995), it will be more efficient for households to allocate their labour between self-employment in farming on their own land and off-farm employment at the going wage rather than cultivation using wage labour. It can then be shown that it will be those with higher levels of ability and lower per capita endowments of land who will tend to rent in land which they will use more efficiently than those from whom they are renting. This implies that rental markets will transfer land to 'land-poor but efficient' producers and that will increase overall productivity in the economy (Deininger andJin 2005). Also, any increases in the wage for off-farm employment will increase the supply of land to the rental market and thus the amount of land transacted in them. This will result in a reduction of the rental rate and, in a risk-free environment, will make everybody better-off.

The role of transaction cost and policy. Participation in land rental markets is not costless. Those interested
in participating need to acquire information on market conditions while actual participation requires the screening of possible applications, negotiation, and enforcement of payments. The existence of such transaction costs will drive a wedge between the amount of resources expended by renters and that received by landlords. This will expand the range of producers who remain in autarky, thereby reducing the number of households able to gain access to land through rental as well as the amount ofland transacted through such markets. Anything that reduces these transaction costs will thus increase rental market participation, total output and productivity, and social welfare. Policies, such as the restrictions on rental imposed in India, also increase the transaction costs ofland market participation, for example, they force market participants to spend resources on circumventing them or entering into informal agreements. They would, therefore, have similarly negative impacts on social welfare.
Urban evidence worldwide demonstrates significant policy impacts. A number of studies have analysed the impact of rent ceilings and other forms of policy restrictions that increase transaction costs of land rental in urban contexts. In these settings, rent control served as a textbook example for policies that can effectively transfer resources in the short term but will be associated with inefficiencies in the medium to long run (Arnott 2003). The key reason is that, by fixing rents below their equilibrium level, rent controls reduce the supply of new housing or the maintenance of existing units by landlords who face an artificially reduced price. Rental restrictions would indeed transfer resources from landlords to sitting tenants when they are imposed but also make access to rental property more difficult for those who were not renting when the controls were imposed (Basu and Emerson 2000).
With a constant or decreasing number of beneficiaries and an increasing number of new entrants who need to access land through now distorted markets, the social cost of keeping land rental restrictions in place is expected to increase over time. In practical terms, this has led policymakers in many urban areas of the world to realize that rent controls do not benefit the poor and that a more flexible approach is needed (Arnott 1995).
However, rental restrictions could have larger impact in rural areas. Although empirical evidence from rural areas is more limited, a number of reasons would lead one to expect a larger and more significant negative impact of rental restrictions on the functioning of such markets than on those in urban settings. First, as owners of urban housing stock have fewer opportunities to revert to self-cultivation (or cultivation with wage labour) than rural landowners, the supply of housing to urban markets will be less elastic, and thus the negative supply response less pronounced than in the case of rural land. Second, to the extent that rural rents are defined in kind-often as a share of outputcontract terms in rural areas will be less flexible than in urban ones, limiting the scope for circumventing rental restrictions by adjusting rental rates. Third, the rights given to tenants in rural areas are often non-transferable and heritable but incomplete (that is, still requiring them to pay rent to the landlord), reducing both parties' incentive for making landrelated investments. Limits on sub-leasing could have a pronounced impact if, with generational change, the original tenants are no longer able to farm the land they received in the most efficient way while their offspring may have taken up non-agricultural occupations. Finally, for rural (but not urban) land, disincentive effects of wage-labour-based cultivation imply that land use or ownership arrangements will affect productive efficiency (Binswanger et al. 1995).
Also, if tenancy laws are combined with land ceiling We use three measures to represent rental restrictions. The first is the number of tenancy and ceiling laws enacted since independence, something that also allows us to maintain comparability with the existing literature (Besley and Burgess 2000). At the same time, it is well known that counting laws in the absence of a measure for their content is at best a very imperfect proxy for the constraints actually faced on the ground. And even if it were, the ability to implement such laws has often lagged significantly behind the legislative zeal (which may itself be a substitute for actual implementation). To deal with this, we complement the number of laws with the share of households which actually benefited from tenancy and ceiling legislation in each state, the variable that was used earlier. In addition to providing a measure for the eagerness of a given state to implement land rental legislation, doing so is also justified by the fact that in all states the ability to transfer land that was received through either of these means is highly restricted. 3

EMPIRICAL EVIDENCE ON EFFICIENCY AND EQUITY IMPACT OF LAND RENTAL IN INDIA
Land rental is important for the poor. Table 7.2 presents descriptive evidence on household variables disaggregated by their type of land rental participation, that is, whether they rent in, rent out, or remain in autarky. Comparing per capita land endowments across the three groups (0.20, 0.36, and 0.64 ha for renters, autarkic households, and landlords, respectively) suggests that, as expected, land rental provided an opportunity for land-scarce and labour-abundant households to gain access to land. Note that, of those who rented in, 37 per cent were landless. Comparing levels of consumption and asset ownership for households which differ in the 3 As none of the Indian states permit sub-leasing of lands to which tenants had received permanent rights and most states also impose restrictions on transfers ofland received in the course of implementing ceiling legislation, this is an indicator of direct restrictions on the operation of land rental markets. nature of their land market participation supports the notion that rental provided opportunities for poor groups to access productive resources and thereby improve their well-being. The value of all assets owned by those renting in land is at Rs 33,839, more than 25 per cent below the average, compared to levels of asset ownership close to the mean for autarkic households and about 33 per cent higher than the mean for those renting out. Clearly, it is the asset-poor who benefit from the market-mediated land access.

Land rental allows pursuit of off form opportunities.
The data also illustrate that households who rent out land are endowed with higher levels of human capital (61 per cent have a head who had at least primary education, compared to less than 50 per cent for autarkic and renting households) and are much more likely to engage in salaried employment (30 per cent as compared to 11 per cent for those renting in and 16 per cent for autarkic households). This supports the notion that, as non-farm opportunities increase, those with little advantage in agriculture will tend to move out, thereby making land available to provide human and physical capital assets to those with lower levels of ability, and also give them nonfarm opportunities, with a possibility of gaining access to (additional) land and improving their livelihood. This is consistent with the notion that renting will provide opportunities to accumulate experience and capital and can thus constitute an 'agricultural ladder' that will allow landless people to accumulate land (Spillman 1919) and contribute to greater diversification of income sources and occupational mobility in rural areas (Alston and Ferrie 2005).

Ability to rent in land increases returns to labour.
Estimation of a production function (not reported) allows us to compute the marginal product oflabour from agricultural cultivation and compare it to the wage rate for casual agricultural labour. Doing this suggests that both males and females obtain a value marginal product of about Rs 150 per day engaged in agricultural self-cultivation. We are unable to reject the hypothesis of equality of such returns among males and females, implying that females are as productive as males. Noting that the casual wage rate in agriculture as well as non-agriculture is less than Rs 50 per day, it appears that land rental provides a very attractive opportunity to improve household well-being even after subtracting the rental payment.

Econometric evidence
Rental markets allow landless and land-poor households to gain land access. To assess the impact of restrictions on determinants of land rental participation, we estimate an ordered probit model on pooled data from 1982 and 1999 where renting out, autarky, and renting in are coded as 1, 2, and 3, respectively.

LAND LEASE MARK
includes structural factors affecting overall rental market participation and for cut points marking the transition between renting out and autarky as well as autarky and renting in, respectively, are reported in Wealth barriers to rental market participation have disappeared. Contrary to widespread belief which assumes that markets favour the wealthy, the lack of significance of households' total asset ownership suggests that, consistent with descriptive statistics, land rental markets are not biased against the poor although the composition of a household's asset portfolio does matter. 4 Right-hand side variables include the following: (i) a set of household characteristics including total asset and land endowments, age, education, household composition, and dummies for caste as well as landlessness; (ii) a measure of agricultural ability that is derived from a stochastic frontier production function to make inferences on the impacr ofland markets on productivity of land use; (iii) mean village income to assess the response of rental markets to higher non-agricultural activity; and (iv) the three measures for rental restrictions as discussed above. Notes: Robust z-statistics in parentheses; * significant at I 0 per cent; ** significant at 5 per cent; *** significant at 1 per cent; Constants and regional dummies included throughout but not reported.

Land rental increases productivity of land use.
To identifY the impact of rental markets on productivity, we estimate a stochastic production frontier (not reported) that provides a measure of agricultural ability for each household in the sample. This measure is then included in the regression and in all the three specifications, the coefficient on our measure of agricultural ability is highly significant, suggesting that it is households with higher levels of ability who gain access to additional land through the rental market. This implies that rental markets can be expected to increase the overall productivity ofland use in the economy. 5 Land rental focilitates off-form development. We also find that higher levels of education, measured by the completion of at least primary education by the head, increase the propensity to supply land to the rental market due to higher opportunity cost oflabour for more educated individuals. Mean village income increases the tendency to rent out, implying that as the level of income increases with overall development, households will be more likely to move out of agriculture and supply their land to the rental market, thereby allowing those with higher levels of agricultural ability to increase their holdings and income levels, similar to what is happening in China.
The highly significant coefficient on ability also supports our hypothesis of rental markets transferring land from less to more efficient producers, pointing to the potential for land transfers through rental to significantly enhance efficiency.
Rental restrictions reduced supply of land to the rental market. We find that policy measures not only reduced demand (as indicated by the upper bound equation) 5 Results with ability are reported separately because the fact that ability is defined only for households or dynasties who engaged in agricultural production in either of the two periods reduces the sample by about 2500 observations. The fact that this does not significantly change our results provides an additional robustness check.

LAND LEASE MAR
but also supply. 6 This is in line with evidence suggesting that landlords will be less ready to rent out their land if regulations either imply that part or all of their property rights to land that is rented out may be lost or limit their ability to freely negotiate the amount of rent to be paid. This result obtains irrespective of the variable chosen to empirically represent policy.
Comparing coefficients suggests that the number of laws passed had the least impact. This was followed by implementation of ceiling and tenancy legislation, and is consistent with the notion that ceilings pose less of a threat than tenancy laws which, in contrast to the former which are applicable only to large owners, apply to all market participants irrespective of the size of their holding. This is also true because enforcement of the latter is less politically controversial and administratively complex than that of ceilings. We also note that, even after adjusting for the factors discussed earlier, SCs, STs, as well as other BCs are less likely to rent out land than others. This finding may relate to lower levels of social capital and thus either less opportunity to find partners in rental markets or to protect property rights to rented out land. The highly significant 1999 dummy illustrates that supply of land to rental markets has increased significantly over time, beyond the expansion due to higher village income. This result is robust to the choice of policy variable.
Rental restrictions make it more difficult to rent in land. Turning to the (upper)  While this is an encouraging sign, one should note that, given the magnitude of the coefficients, almost a century will be required for the time trend to fully offset the impact of tenancy legislation. This, together with evidence that circumventing such legislation is normally easier for the rich than the poor (Yugandhar 1996;Thangaraj 2004) would imply that expecting the passage of time alone to eliminate the negative effect of tenancy regulation is unlikely to be a realistic policy option.

Equity and efficiency effects of rental market participation
Rental restrictions reduce equity. The discussion provides strong support for the hypothesis that land rental restrictions constrained the ability of the poor and landless to acquire land that would help them to improve their income and social status. There may, however, still be an underlying trade-off between equity and efficiency (Besley et al. 2004). To make inferences on this, we interact the policy coefficient with a dummy for landlessness or the level of productive efficiency. Key results from doing so (with the coefficients for the main equation omitted) are reported in Table 7.4. Coefficients are broadly consistent with those reported earlier and in addition, provide some interesting insights. The upper bound equation suggests that a major impact of tenancy regulation on the demand side is to prevent access to land by landless and more efficient producers; in fact, after accounting for both these effects, the coefficient on the policy variable by itself is no longer positive but turns negative and highly significant.
One explanation consistent with this is that sitting tenants who already own land but are not necessarily the most efficient producers, especially when they become old and their children do not want to continue in farming (as was seen in the Philippines), benefit from tenancy regulation at the cost of landless but more productive producers. The latter are constrained by the transaction costs imposed through tenancy restrictions and are unable to effectively express their demand in the market.
Rental restrictions also reduce economic efficiency. Economic development alone will not narrow the gender gap. To assess whether such large differences are just a temporary phenomenon that will disappear automatically with economic development, we interact the male dummy with the mean level of income in the village (column 2). Results suggest that, contrary to what one would expect, the difference between male and female wages tends to increase as the village grows more affluent. It is also interesting to find that, everything else being equal, wages are lower in villages where land is distributed in a more unequal fashion, as measured by the Gini coefficient ofland distribution (column 3).

Self-employment (including on rented land) increases opportunities for women. While differences in human
capital or physical ability between men and women  Notes: Robust z-statistics in parentheses. *significant at 1 0%; **significant at 5%; ***significant at I per cent. State dummies included throughout but not reported.
could be a reason for observed differences in wage rates, estimating a production function where male and female labour are entered separately (not reported) suggests that this is not the case; in fact we are not able to reject the hypothesis that the coefficients on male and female labour are equal to each other, that is, there is no difference in the productivity of male and female labour in own agricultural production. This suggests that the gender gaps estimated here are indeed a sign of discrimination but also implies that the relative benefits from providing women with access to land, that is, the difference between what they could earn from agricultural cultivation on such land-even after the rental fee has been deducted-and their opportunity wage in casual agricultural labour, is significantly higher than that for men. This is consistent with anecdotal evidence from Andhra Pradesh where a large number of women organized in SHGs found land rental to be a very attractive opportunity and often used the group to obtain access to such an opportunity, possibly even paying more to the landlord than was allowed under existing rent ceiling legislation. Case studies suggest that a combination of women having better access to finance, as well as social pressure and availability of alternative opportunities for landowners has led to a significant increase in women's land rental market participation, with a consequent positive impact on their ability to generate income.

POLICY IMPLICATIONS
Freeing land rental could yield significant benefits. Our analysis suggests that rental markets can make a significant contribution to productivity and equity and that the pro-poor nature ofland rental has improved significantly over time as wealth biases that had earlier characterized such markets have disappeared.
Rental markets are more active in places with higher levels of non-farm activity, thus making an increasingly important contribution to diversification of livelihoods in rural areas. The fact that tenancy and ceiling laws are found to reduce rather than increase land access by landless and more efficient producers is a cause for concern. Consistent with our earlier results on land reform, it suggests that, even in situ- Furthermore, careful and impartial monitoring of such efforts to assess their impact will be critical to generate the momentum for further reform within a state and to make the case for reform in similar settings. As our results suggest that women could derive particularly large benefits from such a measure, careful attention to potential gender -differentiated impacts is warranted.

Land Sales Markets
Policymakers have often been concerned that in rural areas where households are not able to fully insure against shocks due to credit market imperfections, distress sales may have a negative impact on both equity and efficiency. In other words, farmers would be forced to sell off their land, often to usurious moneylenders or other unscrupulous persons, at bargain prices that are well below the productive value of the land just to ensure their survival in the face of a shock. As they will not be able to re-acquire the land through purchase once prices return to normal, this would leave them permanently landless, an outcome that is likely to be undesirable both from equity and efficiency points of view. Indeed, historically, distress sales were a major factor that led to the accumulation oflarge amounts of land by the powerful, though often not very efficient, landlords and moneylenders. However, even though the extent, incidence, and impact of land sales are among the most hotly debated policy issues on land, most of the empirical evidence to support such arguments is based on case studies or surveys of small samples that may not be representative for a larger population. Our data, therefore, provides an opportunity to obtain evidence on the nature of such transactions in India. This should help to identify wh~ther restrictions on the operation of land sales

EMPIRICAL EVIDENCE ON OPERATION OF LAND SALES MARKETS
Households who bought land significantly improved their welfore. Descriptive statistics on household welfare are presented in Table 8.1, separately for those who remained autarkic as well as those who purchased or sold land. We find that over the 17 -year period covered by our data, 15 per cent of households bought land and about 8 per cent sold land. We note that on average the land sales market seems to have transferred from those with higher endowments ( 1.9 ha on average for sellers) to those with less land (1.32 ha for purchasers) and that 13 per cent of households which originated from a landless dynasty 2 were able to make the 1 One problem in all surveys dealing with land transactions is that, because parties who sold land may have dropped out of the sample, there may be considerable selectivity which may bias the results. In our case this danger is reduced by the fact that respondents in 1982 were randomly selected and that in 1999, information on all the descendants of a given household or dynasty has been collected. 2 We use the dynasty's land endowment as it may well be the case that a specific individual or household had not yet received  suggests that the redistributive potential ofland sales markets is more limited than that of rental markets.   to gain access to credit. In peri-urban areas, the problem is even more acute as it prevents small farmers from selling their land in small pieces to benefit from high prices and encourages informal deals and corruption.

IMPROVING THE FUNCTIONING OF LAND MARKETS
Eliminating such restrictions is, therefore, desirable.

Compulsory land acquisition. In an environment
where land rights are often ill-defined and the ability of individuals or groups to transfer their rights is highly restricted, land acquisition will have to be resorted to more often. This is true even in situations where no public purpose is involved and negotiation between private parties may be more expedient and advantageous, than 'land taking' by the public sector.
This is especially relevant given that bureaucrats are often ill-equipped to represent local communities and that the Land Acquisition Act's (LAA) main intention was to make it easy for the state to acquire land, rather than protecting the rights oflandowners and providing them with appropriate compensation. While amending the LM to remedy these defects is an important issue for policy, it is equally critical to define more clearly as well as strengthen land rights of individuals and groups in areas where land acquisition is likely, so as to allow more decentralized negotiation.

Prevent inefficient land loss by improving markets for credit and insurance.
There is little doubt that prohibition ofland sales is a costly second-or even third-best policy and it would be more effective and preferable to deal with the root cause rather than the symptoms. Both international experience and our empirical results suggest that the first line of defence against productivity-reducing land sales should be effective implementation of safety nets that would eliminate the need for individuals to dispose of their land to cope with shocks in the first instance. Banks and/ or federations of SH Gs which can provide access to credit in situations of distress would perform the same function and should be encouraged.

Emphasize (group) rights rather than prohibitions.
While wholesale prohibition of land sales will not always prevent socially undesirable land alienations, it may have the impact of preventing desirable land transfers where groups could negotiate with outsiders to obtain significant benefits. To the extent that such LAND SALES MARKET·.· cases currently require the government to resort to expropriation-with amounts of compensation determined in what often seem rather arbitrary ways-constraints that had originally been intended to improve the welfare of tribal populations may well end up worsening it. There is now a growing current all over the world to deal with such situations by giving rights to the groups which-as long as they follow transparent and democratic procedures-can decide about the specific way in which land rights should be defined (including possible restrictions on land alienation) and allocated internally based on their own mechanisms and preferences. Given that existing legislation such as the PESA already defines an institutional framework at the local level that has many of these properties, it would be worthwhile to consider that, instead of deciding in a centralized and rather paternalistic fashion whether or not land should be alienable, it would be better to gradually devolve this authority to the community level provided that such a decision is taken at the local level in a transparent way, and with the possibility of enlisting the support of pubic servants in its enforcement. Having a debate on this issue, followed by a dear policy decision would be highly desirable.
Deal with the huge backlog of land alienations in a quick and flexible way. Even if policy is changed to allow for more flexibility and greater community control in transfer of land, a large number of land transfers from tribals that have already been undertaken in contravention of the law will have to be dealt with. This is in some way similar to instances (already discussed) where systematic adjudication efforts are needed to update the spatial framework and link it to textual records because of too many irregularities in non-tribal areas. Any efforts to clarify and enhance the land rights enjoyed by tribal people will need to be combined with a mechanism to resolve this backlog in a quick and comprehensive way. In a similar experience in Mexico (Box 8.2),

BOX 8.1: GMNG LAND RIGHTS TO GROUPS AS AN ALTERNATIVE TO PROHIBITING LAND SALES
Restrictions on land sales markets can increase the costs associated with certain actions, but if the rewards from circumventing them are high enough, will not eliminate them. For example, owners who have no desire to farm tend to disregard the temporary prohibition of land sales in Nicaragua and circumvent it through long-term rentals with the promise to sell which, because of the associated insecurity, leads to them receiving much lower land prices. The danger of beneficiaries' undervaluing their land could be reduced through other means, and the goal of preventing small landowners from selling out in response to temporary shocks would be better served by ensuring that they have access to output and credit markets and to technical assistance, and by providing safety nets during disasters to avoid distress sales. One case where temporary restrictions on land sales can be justified is in the presence of significant knowledge gaps. This was the case, for example, in many transition countries in Eastern Europe where, after decades of collectivism, new landowners did not really understand the working of land sales markets and were thus in danger of disposing of a hugely valuable asset way below its true value, something that would have led to negative social consequences and re-concentration of land in the hands of speculators. To avoid this, many counties introduced moratoria on land sales, for example, for the first 10 years after land had been privatized, to prevent quick sell-offs at unrealistically low prices. In some transition and developing countries !for example, Albania and Mexico), but also in developed ones !for example, France or Germany) a permanent 'right of first refusal' is in place. This means that before selling land to an outsider, neighbours and other village members lor in some cases other government bodies) must be given the opportunity to acquire the land at the same price for some period, usually 30 or 45 days. This not only helps to allay fears of being bought out by outsiders but also makes the prices paid for land public knowledge and prevents land from being disposed of at fire-sale prices-in which case somebody can offer a higher price.
A second reason why communities may restrict land sales is that, in closely knit (indigenous) communities, disposition of land by one individual can generate negative externalities for the whole community which has the obligation to care for him or her after the loss of land !Andolfatto 2002). This implies that giving communities the right to make a conscious choice by the group and the group has clear and transparent mechanisms for changing the land tenure regime, such restrictions are unlikely to be harmful. If traditional social ties loosen or the efficiency loss from the sales restriction becomes too high, groups are likely to allow sales to outsiders in some form. For example, if an outside investor requires land, it may be more efficient for the group to bargain as a whole and to jointly obtain the benefits accruing from such a transfer land possibly invest them in social goods) rather than having individuals do so. For example, in Mexico, communities were recently given the ability to decide-by majority voting-whether they would want to eliminate the restriction on sales to outsiders. Quite surprisingly, in a country that has about 1 0 times the per capita income of India, only about 12-15 per cent of the communities-largely those living in peri-urban areas where demand for land was very high and where often large chunks of land had already been sold informally-<:hose to freely allow sale of land by individuals. This suggests that they did perceive that the benefits from maintaining land internally enforcing) land sales restrictions for the time being exceeded the costs from doing so, especially in view of the fact that they would always be able to change this policy should the need arise.

BOX 8.2: INGREDIENTS OF A COMPREHENSIVE PROPERTY REFORM-THE EXAMPLE OF MEXICO
From the 1917 revolution until 1992, Mexico implemented a large-scale process of land reform, which distributed more than 100 million hectares, or 50 per cent of the arable area, from large farms to the 'social sector' which comprised the so-called ejidos. Despite the physical achievements, the desired benefits did not materialize because of numerous restrictions on tenure security and transferability of land within the ejido. To overcome these, in 1992 the Mexican government adopted a comprehensive set of reforms that focused on modifications of the legal environment and institutional changes. The goal was to not only eliminate restrictions on the functioning of land markets but also empower communities to choose the property rights regime most suitable to their needs (that is, either communal, individual, or mixed), increase security of tenure and investment by issuing certificates of land ownership, and deal with the backlog of land conflicts that had been inherited from the past. To do so, a large-scale systematic programme of land regularization, called 'PROCEDE', was implemented which yielded quite impressive results at least in terms of the area certified.
One key lesson from this experience is that, in view of the fact that many (informal) land transactions that were essentially illegal had taken place, an effective way of resolving disputes was a must. To allow this, a system of 42 land courts and one appeals court was created. In 5 years, these courts dealt with nearly half a million conflicts, thereby helping to eliminate a huge backlog of cases that had accumulated from the past. In dealing with conflicts in a systematic manner, these courts were explicitly instructed to seek out of court settlements and special mechanisms were put in place to ensure accessibility by the poor. Since small farmers who had been under the tutelage of local authorities for a long period of time would still find it difficult to ascertain their rights-especially to correct past irregularities-a special institution, the Procuraduria Agraria, was created to provide legal assistance to landholders, represent them in court dealings, perform an ombudsman function, and supervise the implementation of the regularization programme. Evaluation of the programme suggests that, in addition to the economic benefits that were associated with clarification of land rights and receipt of a secure and unambiguous document, beneficiaries often perceived the main impact to be in helping them to gain independence from local political bosses who had long used land as a means for exercising political power. efforts to improve the land administration system had to be accompanied by an involved and rather complex effort of adjudication-which included special incentives for out of court settlements-to resolve the pending disputes and conflicts. Similar approaches to systematic conflict resolution will need to be thought about for programmes to extend tenure security to tribal areas and populations. The goal should be to have these in place by the time the Tribal (Forest) Land Bill is passed so as to ensure that-in contrast to many other progressive and farreaching laws in India-this piece oflegislation can be swiftly implemented and have a real impact on the ground.

Towards an Integrated Land Policy
While few Indian policymakers disagree on the importance ofland administration and land policies for the poor, lack of systematic empirical evidence on the status ofland administration in different states and on the impact of specific policies on intended beneficiaries has in the past often resulted in a highly, and unnecessarily, polarized debate on these issues. This report departs from the premise that the opportunities provided by new technology and overall economic growth in India warrant a closer look at empirical evidence to inform policymaking in these critical areas. This chapter first summarizes some of the more surprising findings from the review of empirical evidence before drawing out some possible implications and options for policy.

KEY CONCLUSIONS FROM EMPIRICAL ANALYSIS
Modernization of land administration has made greater progress than is often realized by observers, including policymakers at various levels. Although progress varies across states, which moved at very different speeds with no single state having developed an approach addressing all the areas to be covered, putting together the experience of various Indian states allows clear identification of the steps to be taken to put in place a more comprehensive land administration system. Experience also illustrates that doing so provides an opportunity to significantly enhance tenure security, investment incentives, and access to credit, while at the same time simplifYing the system to reduce the transaction cost of securing and transferring land rights. The transition towards comprehensive management ofland administration, although by no means automatic, is thus definitely within reach.
New data used for this study also suggest that the pessimism about the poor being able to benefit from land (rental or sales) markets that had traditionally underwritten government interventions to overcome perceived imperfections in these markets-which may have been justified in the past-no be longer be warranted. We find that rental markets work in favour of the poor, that restricting them will reduce productivity and equity, and that unclear land records reduce the scope for land rental. Also, land sales markets emerge as an important channel to provide land access. While prevention of involuntary land loss by the poor through distress sales is a desirable goal, our analysis implies that restricting transferability of land is rarely the most appropriate measure to do this and it must be complemented by other instruments.
One issue that emerges clearly from our analysis is that the synergies between land administration and land policies are stronger than are often assumed. The lack ofland rights in many marginal areas and outdated or contradictory records may be more important than traditional market imperfections in reducing asset endowments by the poor, the ability to use land in the most effective way, and the potential for land markets to operate. Similarly, a merely technical approach to land administration that neglects critical policy dimensions, for example in terms of stamp duties, may not be sustainable. The recent HSA Amendment illustrates the potential impact of policy measures to change the way rights are defined. With well-defined land rights, elimination of restrictions on lease markets will have a positive impact and it will be possible to put in place policies to help avoid distress sales by the poor and reduce the need to rely on ex post intervention to deal with this issue.
In view of this, it is desirable for the government to: (i) build on the successes in land administration but integrate the systems to eliminate duplication at the operational level; (ii) systematically clarify land ownership including resolution of disputes and a basic spatial reference; (iii) expand beyond settled areas to ensure that the most needy will not be left out; and (iv) ensure that operational and policy issues are tackled in tandem. This is a task of huge proportions which existing institutions are not well equipped to handle on their own. Experience from computerization of textual records suggests that, if the regulatory framework is clear and enforced effectively, PPPs offer a major opportunity to scale up successful approaches.
To take advantage of this opportunity, greater focus of the public sector on regulatory functions and evaluation of pilots to determine their potential is required. A key task of this committee, to be accomplished in the short term, would be to draw on the existing experience to formulate a policy on land administration through a participatory, consultative process. The policy should be clear on the strategic vision and should contain specific recommendations for the design of programmes and funding arrangements to attain this goal. Once in place, proposals for funding by individual states can then be justified and judged based on: (i) their fit into the overall strategy and compliance with key elements (for example, the switch from manual to computerized records); (ii) the extent to which they generate true public goods; (iii) financial contribution by beneficiaries or state governments in line with their means; and (iv) proven capaciry for implementation or appropriate outsourcing arrangements. This will also help to clarify the targets to be accomplished by specific interventions, which in turn can serve as a basis for allocation of future funds.

OPTIONS TO FULLY REALIZE THE POTENTIAL OF LAND ADMINISTRATION
Beyond this immediate task, the committee would be responsible for defining and possibly also supporting pilots, overseeing their systematic evaluation, ensuring that lessons are codified in regulations, and Integrate textual records. Limited integration of records with registration records increases the risk of inconsistencies among different types ofland records that can give rise to land conflict. To deal with this, it is desirable to refine and roll out systems for backoffice integration of records and registry, including definitions and standards to ensure inter-operability at the technical level. This should be combined with more systematic evaluations of the impact of specific elements ofland record computerization on household welfare and decisions by other economic actors (for example, banks). This would give the issue the policy attention it deserves, overcome bureaucratic resistance to such a step, and provide guidance as to priority areas for attention.
Provide a basis for statewide spatial coverage. Large amounts of money have been, and continue to be, spent on surveying pilots with ill-defined objectives the results of which are rarely subjected to rigorous evaluation." On the contrary, pilots often make officials lose sight of the forest for the trees. Drawing on India's capabilities to combine satellite imagery with existing village maps and other readily available spatial products to generate a basic cadastral index map would be a lower cost option to provide a comprehensive framework, identifY gaps, and on this basis establish criteria to address spatial data problems in an affordable manner and in the near term. This could easily be combined with preservation of existing village maps through vectorization and geo-referencing to link to the cadastral index maps.
Pilot ways of improving textual and spatial records for well-defined situations. In line with the ultimate goal of the land administration system, the purpose of piloting should be to establish processes that can be scaled up rapidly to improve the overall (that is, textual and spatial) records and formulate regulations that can help to do so, possibly by subcontracting to the private sector. To achieve this, pilots should be targeted to archetypical situations arising from the nature oflndia's land records (that is, unrecorded subdivisions, inconsistencies across records, decay/ loss of maps, change of land use patterns, unsettled lands). It would be ideal to set up a technical working group to steer this process with the goal of producing results, to feed inro a broad debate on this topic, in a 12-18 month time frame.
Allow private sector participation in surveying, focusing government on a regulatory role. Given the size of the gaps in spatial data and the limitations that make it difficult for the public sector to address them comprehensively, the almost complete prohibition of private participation in survey is surprising and inconsistent with international best practice and India's own experience in computerizing textual records.
Efforts to change this should focus on: (i) providing a regulatory framework for the application of a range of survey methods with defined precision requirements; (ii) strengthening capacity in the private and public sectors; and (iii) revamping survey processes, for example, shifting from paper-based to electronic ones to reduce cost and make surveys more affordable.

OPTIONS FOR POLICY REFORM
Reduce stamp duty rates and e>.:plore the scopefor replacing them with a land tax. There is little doubt that the high rates of stamp duty currently assessed upon registering land transfers push people into informality while reducing government revenue. Reducing these rates, which are very high by international standards, is likely to be necessary to ensure the sustainability of any improvements made in land administration.
To make such a step revenue neutral, it may be useful to consider combining it with an increase in the land tax for specific groups, possibly to be shared between states and local governments. While such a decision will not be politically easy, it is likely to have a more profound impact on India's land administration system than a transition towards a title registration system.
Eliminate restrictions on land markets. All over the world land rental markets allow rural dwellers to join the rural non-farm economy in a way that provides those who stay back with access to additional productive resources. Indian evidence shows that rental restrictions reduce equity as well as efficiency. It is thus desirable to: (i) make leasing legal where it is currently prohibited and replace rent ceilings with

Complement restrictions on tribal alienation with flexible mechanisms providing them with property rights.
While there is little doubt that alienation of lands through distress sales is an extremely undesirable outcome that should be avoided, increasing rates of tribal landlessness suggest that regulations are often not effective in preventing the same. In the short term, the most promising means to prevent tribal land alienation is likely to be effective safety nets, something that could possibly be combined with mechanisms for communities to have a greater say in whether or not land should be transferable, for example, a right of first refusal or community consent for sales.
Providing tribals with real property rights, either individually or as a group, would in the long term make a more important contribution to their productive development and help them to avoid distress sales. Therefore, the longer-term goal should be to implement systematic programmes that would recognize tribal land rights and according to accepted principles of policy resolve whatever conflicts exist as a result of past alienations in contravention of the law.
Develop state-specific roadmaps to improve land policy and administration and monitor closely. Contrary to the case of land administration where the need for change is widely acknowledged and a wide array of experiences can be drawn upon to identify at least the first steps on this way, policy issues remain more controversial. To ensure that any reforms are properly sequenced and synchronized with improvements in the land administration structure, it is important to base such reforms on a broad policy dialogue to help set priorities, sequence implementation, and monitor realization of the desired impact. While certain strategies need to be state specific, there is considerable scope for assistance by the centre and for comparing experience and learning across different states.

Issue
Limited integration of records with registration records increases risks of inconsistencies among different types of land records that can give rise to land conflict. Paucity of systematic information on magnitude of benefits from modernizing different elements of land administration (and the synergies between them) makes it difficult to give the topic of integration between registry and records the priority it deserves. 2. Coverage of spatial data remains spotty and vast mismatches with textual records remain but their extent is not known to decision-makers There are wide gaps in the spatial data but the magnitude and type of such gaps is unknown and, as a consequence, no strategy for dealing with them in a systematic way (and according to well-defined processes) exists.
Absence of a comprehensive spatial framework makes it impossible to define a strategy for improvement and measure progress towards it. Existing maps are in precarious condition and in many cases no longer usable. Initiatives to preserve them are not systematic and the products of doing so are not integrated in the process of land administration and management. Non-compulsory registration leads to inconsistencies between different sets ofland records. High rates of stamp duty lead to non-registration of land transfers, driving users into informal arrangements. Make the computerized records available on the Internet after they have been validated in a participatory manner. Implement pilots to compare the suitability and costeffectiveness of different surveying methods as a basis for formulating recommendations and regulations. Wherever appropriate, change paper-based workflows into digital ones.
Make availability of a strategy to integrate records and registry a precondition for moving towards activities to improve spatial data. Ensure that whatever spatial data are generated in this way will be integrated into the existing system. Based on pilot studies, develop regulations to resolve these conflicts in an incentive-compatible way, ideally simultaneously with a comprehensive updating of textual and spatial land records. Establish incentives, with sunset provisions, for settling conflicts out of court in an expeditious manner. Establish technical working group to: (i) explore options for survey, recommend appropriate pilots, and issue regulations and manuals for specific situations (from sporadic/systematic subdivision surveys to complete loss of records and unsettled areas) and (ii) investigate whether changes in the institutional structure-to ensure greater consistency and quality of surveys especially in urban areas and to regulate an emerging private sector would be appropriate. Provide the basis for developing technical capacity (for private or public sectors) by reviewing appropriateness of schools and revamping curricula. Authors.

Action
Abandon rent ceilings and instead replace them with legislation that will enable better functioning of rental markets. Carefully evaluate state-level pilots to abandon land rental restrictions to make the case for similar action by other states.
Allow transferability of land received through land reform by beneficiaries, especially through sub-leasing. Explore options for giving ownership rights to long-sitting tenants through decentralized mechanisms that do not involve the government bureaucracy.
Review and, where possible, eliminate unwarranted restrictions on land sales. Encourage direct negotiations between landowners and potential buyers in peri-urban areas and provide guidance for these. Revise the Land Acquisition Act and clearly circumscribe its applicability. Complement such legislation with options to improve access to insurance and decentralized governance Complement bureaucratic control of preventing land alienation with safety nets, a right of first refusal, community approval to sales, and collective bargaining. Improve the land administration system in tribal areas to provide the basis of information needed to enforce any regulations relating to land. Strengthen land rights of tribal populations instead of restricting them. Develop ways to implement systematic programmes to clearly establish rights and resolve conflicts in tribal areas, to be scaled up once the Tribal Land Rights Bill is passed.   Source: PriceWaterhouseCoopers (2006).