In his book The Mystery of Capital, Peruvian economist Hernando de Soto explored why capitalism had flourished in the West but stalled elsewhere. His answer was that it was not a matter of culture or a lack of initiative; after all, the poor are generally hardest-working and enterprising. But they lacked access to capital. The poor in Lima owned houses and land, but without a system of property rights that made clear who owned what, it was difficult to mortgage a house to start a business, or to sell it to a stranger who could trust that the seller was the owner.
These questions are particularly relevant in India where, according to the Reserve Bank, land and property are the single most important assets most Indian families — they constitute 77% of the average household’s assets. But is a difficult asset to transact or borrow against. Recognising the value of clarity on property rights, in 2008, the government launched a programme to computerise land records and cadastral maps, and more recently began assigning each parcel a 14-digit identification number. A Parliamentary Standing Committee recently reported that by January 2026, 99.8% of records of rights had been computerised, along with 97.4% of cadastral maps and 95.7% of sub-registrar offices.
But anyone who has tried to purchase land knows that the ground reality is rather different. A buyer still must trace the title back at least 30 years, obtain an encumbrance certificate covering the same period, confirm that every legal heir has signed the sale deed, and send a surveyor to check the boundaries against government maps if they are to avoid litigation. Although the records have been digitised, the system behind them remains unreliable.
The underlying problem is that India uses a system of presumptive titling. The State registers deeds, the documents used to transfer ownership, but not titles, the legal right of ownership itself. When a sale is registered, the government records that a transaction took place but does not certify that the seller owned what she sold. Registration and mutation, the updating of the record after a sale or inheritance, have traditionally been separate processes, and only 17 states even claim to trigger mutation automatically when a sale is registered. In reality, this process is unreliable. Moreover, modern record rooms, where the physical documents used to settle disputes are kept, are only about three-quarters complete leaving plenty of scope for ambiguity around ownership.
{{/usCountry}}The underlying problem is that India uses a system of presumptive titling. The State registers deeds, the documents used to transfer ownership, but not titles, the legal right of ownership itself. When a sale is registered, the government records that a transaction took place but does not certify that the seller owned what she sold. Registration and mutation, the updating of the record after a sale or inheritance, have traditionally been separate processes, and only 17 states even claim to trigger mutation automatically when a sale is registered. In reality, this process is unreliable. Moreover, modern record rooms, where the physical documents used to settle disputes are kept, are only about three-quarters complete leaving plenty of scope for ambiguity around ownership.
{{/usCountry}}A 2016 survey of more than 9,000 litigants by the research group DAKSH found that land and property disputes accounted for nearly two-thirds of the civil cases reported by respondents. About 90% of the litigants surveyed earned less than ₹3 lakh a year, and land disputes take about 20 years on average to resolve, according to a NITI Aayog paper. According to one analysis, a quarter of cases decided by the Supreme Court have involved land. Judicial statistics understate the extent of land disputes because many land cases are handled by revenue authorities rather than courts. Uttar Pradesh alone had 1.13 million pending revenue cases in August. The cost of litigation of all kinds is estimated at about half a percent of GDP each year. This legal ambiguity is expensive for most people but very profitable for some: litigants for whom a long court case is a negotiating tool, and bribe-seekers at many levels. The losers are usually small owners who cannot afford to spend money on courts and lawyers.
In contrast, in the US, a buyer can purchase a house with reasonable confidence because title insurance protects against claims arising from defects in ownership; in Britain and Australia, the State itself guarantees the land register. While title insurance is mandatory in India under RERA projects, the market is very small, partly because the poor quality of the underlying records makes the risk expensive to insure.
One solution is conclusive titling, in which the State guarantees that the person named on the register actually owns the land. Rajasthan passed an urban titling law in 2016, and NITI Aayog circulated a model law in 2020, butfew states have moved on implementation. Conclusive titling requires first cleaning up ownership records, a daunting task for any bureaucracy, and it makes the State liable for errors. It is also important to proceed carefully, in ways that do not deny someone’s legitimate rights to the property, such as an heir’s share or the customary ownership of tribal communities in the Northeast, where land is often held collectively. Done poorly, conclusive titling can create more problems than it solves.
But there is a potential transition path. Much useful work on untangling titles is being done by private firms that buy and consolidate land. Bengaluru-based Agrocorp, which buys and develops farmland, says it has transacted more than 1,200 acres without a single case of litigation. Its due diligence involves carefully tracing the title history and family lineage and checking the land against government surveys and with the relevant departments, the equivalent of vetting used cars to certify some as drivable while rejecting others.
This is valuable work, but it is slow and expensive. Once it is done, a process, with public notice and a window for objections, could allow for the findings to become part of the public record, so the next buyer is saved the trouble of verifying the same facts. Over time, we could build a title system, starting with titles that can be certified.
Few investments could unlock capital and free enterprise in the country the way cleaning up land titles could. Without it, Indians will remain capital-constrained with low formation of new businesses despite owning valuable assets, on paper. And that will be a formidable barrier to a Viksit Bharat.
Ramanan Laxminarayan is president, One Health Trust. The views expressed are personal