For years, India's land registry system has been a hotbed of inefficiencies, disputes, and corruption. Amidst the modernization and streamlining of the country's property record management, blockchain technology comes out as the solution. This post looks at how a blockchain-based land registry might shake property management in India, saving billions and giving the country better legal outcomes.
The present state of land registry in India: Land registry is essentially a nightmare-prone process in India. According to the World Bank's Ease of Doing Business Index, India ranks 154th among all countries of the world for the "registering property" category because of its oppressive, at times incomprehensible processes related to property dealings.
One major issue, even now, lies in the incomplete or outdated nature of a large percentage of the land records; although digitization of these records is ongoing, most of them are still on paper. Without any formal titles, this could deny farmers the chance to use their pieces of land as collateral in seeking loans, pushing them to informal channels of lending, which can also be costly and even dangerous.
Besides, land titles are always presumptive in nature in India, and hence they can always be contested in the court of law. This is the reason for the inordinate volume of disputes regarding land. Property disputes account for 66% of all civil cases on trial in courts in India. Corruption just adds grease to this problem. India ranks 93 out of 180 countries as per the Corruption Perceptions Index reported by Transparency International. A high number of Indians reported paying bribes for receiving property registration services, indicating the deep-seated problems the present system has.
How Blockchain Can Solve These Issues
Most of these issues have pretty strong solutions provided by blockchain technology. The main feature of blockchain is its immutability-in other words, everything that hits the blockchain cannot be changed. This makes it virtually impossible to forge or tamper with property records in any way. The transparency of blockchain lets all participants in the network see and track transactions, which helps get rid of untraceable corruption.
This aspect of blockchain, Smart Contracts, can automate large areas of land transaction. Digital contracts execute themselves in case pre-defined conditions appear, with little intervention from third parties. This will minimize the risk of human error or fraud.
With blockchain, a single digital platform could collect all land records in one place, instead of having this information scattered between local bureaucracies. What would follow from this is that a history of a particular property, combined with its current status, would be much more traceable and as such, disputes and fraud would be at as low a level as possible. To learn in more detail how blockchain is used in property management, check out this Forbes article.
A few Indian states have already started piloting the land record blockchain. For example, Andhra Pradesh has partnered with a blockchain company, Zebi, to test a blockchain-based land registry system. According to the State Government, such a project has reduced land disputes by half and enhanced the efficiency of the transactions by nearly 30%. More detail about this pilot project is in [this report by Zebi.
International experiences continue to reinforce the efficiency of blockchain for land record management. Sweden started using blockchain technology in its land registry from 2016. A report by the Swedish National Land Survey estimates that blockchain has managed to reduce paperwork and fraud, which could save Sweden close to 100 million Euros per year. The Swedish example shows how blockchain reduces the red tape involved in the management of lands and enhances the transparency of the whole process.
Blockchain in India
Here, India may go for some blockchain platform which could integrate both public and private components. Example: the LTO Network. A hybrid platform will protect sensitive information while making selected parts of it transparent. It can also very easily integrate with existing systems to onboard step by step towards blockchain solutions and accommodate specific legal and administrative needs in India.
For instance, the LTO Network offers a solution that combines strengths from both public and private blockchain systems. This is particularly important for a country like India, whose dominant land records differ and are often extremely outdated. In this respect, the hybrid approach allows for more flexible and secure implementation, taking into account specific needs within the Indian land registry system.
Future of Blockchain-Based Land Registry in India
An Indian blockchain land registry would be a game-changer: ensure total transparency and weed out corruption in property transactions. The companies, like the LTO Network, have developed systems on top of hybrid solutions that allow them to create such an implementing solution. Establishment of the system will require detailed planning, implementation in stages, and new legislation that can confer legal status on blockchain records.
One of the critical challenges will be gaining public trust and acceptance of the new system. Integration with the existing practices of blockchain-based land records will be very necessary in India as it is on its way to becoming more digitally oriented. Besides, the creation of a legal framework that may support the blockchain records is also required for their successful implementation.
These are offset by considerable potential benefits: a blockchain land registry could majorly cut time and cost for property transactions, reduce disputes, and lessen corruption. As India continues to forge ahead with plans of embracing the latest in digital innovations, the adoption of blockchain for land records could prove one of the huge leaps forward in modernizing India's property management system.
Read more in this article from the World Economic Forum about the future of blockchain in land registries and what it means for the world: https://www.weforum.org/agenda/2021/06/blockchain-land-registration/ .
Blockchain will, once again, make India a pathfinder for the world in digital innovation with respect to property management and modernize the land registry system bit by bit. The path will be cumbersome but worth taking.