1. Good Afternoon everybody.

Today, I will be speaking to day on Urban Land Management: A

Legal & Administrative Perspective.

2. Before I begin, I would like to briefly introduce myself. I began my career in 1987 as a member
of the Indian Administrative Service. Now, as we all know, working for govt gives a thinking
individual plenty of time to ponder over the deep questions of life. For instance: Should I open
this file? Should I close this file? Or that all important intellectual puzzle that no one has
succeeded in cracking as yet: Should I sign this file? So all these questions led me to the portals
of the Indian Institute of Management Bangalore, first as a Masters Student in 2002 and then as
a Doctoral student in 2007. For 5 years I was on sabbatical to complete my doctorate. Now,
having returned to the government, I pursue a composite career. I am the Chairman, Karnataka
Appellate Tribunal which is a civil service position, but as a researcher & academic I am
associated with the Institute of Social & Economic Change, Indian Institute of Science & IIM
Bangalore and National Institute of Urban Affairs New Delhi. I am also associated with a social
organization in Mysore called the Swami Vivekananda Youth Movement.

3. Our agenda for today. My presentation today revolves around the question: What ails urban
land management in India? In the process, we look at the history of urban land management in
this country, the problems that continue to dog us, and the remedial measures that may help
alleviate or solve our problems. I draw mostly from my experience as a civil servant and
researcher in Bangalore, but I think the urban experience will resonate with most of you in
other cities and towns in the country. My work on land is a work in progress, and I greatly value
your feedback.

4. Why is urban land management important? All of us will agree that, while land has always been Commented [A1]: India has the second largest urban
system in the world with 310 million people and 5,161 cities
and towns.
an inextricable part of our collective consciousness, it has become an overwhelming Urbanization has become irreversible with the urban
population expected to reach 575 million by 2030 at the
preoccupation in the last decade or so. As Chakravorthy puts it in his book, The Price of Land current rate of growth.

(incidentally this is a book that I recommend to anyone interested in land matters, not just as a
 researcher or professional but even as an informed citizen). There are several reasons for this:
India is today facing unprecedented urbanization at a pace and intensity that we have not seen
before. The increased affluence of urban society puts pressure on land, creating the need for
vast amounts of built space to be added to India’s towns and cities. The growth is thus land
hungry; thus land becomes the key to infrastructure and housing development. More
worryingly however, land has also emerged as the single most important reason for project
delays & cost escalation.

5. What ails urban management? A picture speaks a thousand words. But that means researchers
will be out of business, or be replaced by artists. So let us look into this in finer detail. Commented [A2]: Add the bit about hist & intell story

6. Land management in urban India faces 3 distinct challenges: The chief among these is the
quintessential demand vs supply problem; related is the Nature & Quantum of Regulation and
the third is the Social perception and its Impact of land.

7. First, there is a large shortfall in supply of urban land as compared to demand. We saw that the
growth is land hungry, requiring large amounts of built up space. While some of this addition
will be accommodated by the densification of existing urban areas, most will have to be
accommodated by the expansion of towns and cities. And it is not just land itself, but the
nature of the land that compounds the problem. The surrounding countryside is hardly
unutilized and usually under cultivation. The agricultural landscape usually consists of
irregularly shaped plots in a mosaic and is rarely available in large tracts under single ownership
public or private. Expanding out into the surrounding countryside involves converting a
fragmented agricultural landscape into a serviceable landscape fit for urban uses.

8. The second is the nature and quantum of regulation in land. Government plays a major role in
the supply of urban land. The regulatory requirements are excessive; we will go into this a little
later. But this is not all. There are two aspects to government regulation. First, city authorities
 across the country do not have adequate resources to finance infrastructure and are not in a
position to capture the incremental value of land in the absence of a legal and policy
framework. Second, the nature of the regulatory requirements is such that it constitutes a
serious impediment to private investment in urban housing & infrastructure.

9. Third, and this challenge points to the greater sociological importance of land in the Indian
context. The root of this, and we come back to this again, is the way land is perceived in India. I
argue that land is perceived not as an economic resource, but as an inheritance and a social
asset in India. In part at least, I think this is a romanticized view, more a reflection of urban
naivete than actually the real understanding of a farmer; but be that as it may be, it is the
reason that land has become the fulcrum of large scale societal unrest and conflict in many
parts of the country. The horrific tales of Nandigram & Singur, Orissa and so on is familiar to all
of us. But equity issues relating to land acquisition are more nuanced than this. There is a major
equity issue relating the disparity between those who lose land for a given project and those
who do not, but are located close to the project area. This disparity is due to the fact that those
who lose land are not only displaced, but also get compensation that does not take into
account the potential increment in value of their property due to the project, while those in
close vicinity of the project are better off on both these counts. They do not lose their land, but
get the incremental benefit of the development.

10. So right away, we realize that the issues relating to land management are not just land
acquisition problems. It encompasses acquisition no doubt but goes way beyond it. To
understand this in a coherent manner, we need to look at the history of land management in
India.

11. The initial days of the British Raj India had a laissez faire situation with the state playing little or
no role in land markets. However, gradually, the state began to play a role in land management,
state intervention developing more in the context of town planning. Therefore the Town
 Planning & Land Acquisition Acts developed in tandem with each other, with land acquisition
taken up for the purpose of setting up public buildings & public amenities. Post independence,
acquisition activity heightened, undertaken for heavy industries & core economic infrastructure
in public sector. From the 1980s onwards, through a series of court judgments as well as
administrative actions, “public purpose” was expanded to include private Commented [A3]: Check on court judgements on public
purpose
infrastructure/industry.

12. There was a simultaneous effort at town planning. Under Town Planning Acts, a system of
preparation and implementation of Master (Development) Plans was introduced in the late
1960s for orderly development of cities as per town planning norms. By 1998, 879 Master Plans
were prepared and approved while 158 draft plans were ready and 161 plans under
preparation, thus totaling up to 1198 Master Plans. Urban Development Authorities were set
up at the city level for administration of Master Plans. The most important impact of the Town
Planning norms however, was that the Master Plan mechanism helped governments to place
mandatory land use restrictions and reservations.

13. The third strand in this web of restrictions that bureaucrats like me wove was the urban land
ceiling act. The Urban Land Ceiling & Regulation Act 1976 as a sequel to agricultural land ceiling,
thus bringing the same or similar thinking and perspective to urban land that was prevalent in
respect of rural land. It came into force in 64 towns with the stated objective: to prevent
speculation/ profiteering & ensure equitable distribution The ULCRA restricted quantum of
vacant land an individual can possess which in cities like Bombay or Delhi could be as low as 500
square metres . The “Excess” land was taken by state after compensation for reappropriation,
both of which was decided unilaterally.

14. So the history of urban land management in India was the history of a formidable matrix of
regulation. On the one hand, the Land Acquisition act, 1894 allowed the state to legally exert
its eminent domain powers to forcible expropriate private land; on the other urban land ceiling Commented [A4]: Check on right to property jments & consti
position
 act gave the state the power to unilaterally determine both the excess land and the
compensation thereof. Town planning restrictions and reservations allowed the state to exert
control on how the land could be used by citizens. That is, restrictions stating that a given land
parcel could only be used for a defined purpose, although the owner was free to sell) and
reservations (that is, a given private land parcel is to be reserved for sale only to the
government for urban public purpose under LAA, 1894). In addition, there were other legal
provisions that gave the government controls over private supply of land. For example, there
were restrictions on the sale of agriculture land to a non-agricultural consumer or to an
outsider (not belonging to the province/region or not belonging to a certain caste category),
regulation of agricultural land for non-agricultural uses even in urban areas. High transaction
costs such as high stamp duty discouraged landed transactions. Thus, private landholders were
subject to restrictions that determined what use their land could be put to, whom they could
sell to and at what price, and even how much they could hold. All this led to a severe strangle
hold on the functioning of land markets.

15. What was the collective impact of this web of restrictions? In general, despite all these powers
the state acquired to intervene in the urban land market, the main objective of the regulations
that gave the state such powers, namely ‘orderly development of cities’ could not quite be
attained. Many times, these regulations were ineffective because of the exploitation of
loopholes of the Acts by private landholders as well as rent-seeking behaviour of implementers
of Master Plans and Urban Land Ceiling and Regulation Act. For example, Town Planning Acts
under which Master Plans were prepared and regulated provided wide-ranging discretionary
powers to change reservations made or land restrictions imposed under the Act. This often
gave rise to corrupt practices to get the Master Plans and micro plans amended. Similarly, the
cap on per capita land holding under ULCRA was applicable to non-agricultural land in urban
areas. So, in order to avoid losing land, large landowners kept their land under the agricultural
status or divided it in the names of relatives, adopted sons, etc. The ULCRA also provided that
the state government, instead of acquiring excess urban land from the owner, can allow the
owner—on case-to-case basis—to construct houses on that land and sell them to the urban
 poor at costs approved by the government. This loophole opened the floodgates of corruption,
black money, etc. Owners/ developers acquired such permissions by paying huge speed money
and constructed houses for middle to rich classes. But as they were compelled to sell them at
the low prices set by the government keeping in mind the urban poor, difference between
market value and government approved value was collected in cash, thus proliferating black
money economy in the housing sector. So on the one hand, the public sector lacked will &
wherewithal to use land efficiently; private sector was not free to transact in land. As a result of
excessive government control over land supply under the framework of state planning, urban
growth either stagnated or acquired the character of unplanned, unserviced, informal sprawl in
the periphery of main cities.

16. Okay, let me at this stage jump sideways a bit, and add a little bit of theorization into the mix.
With history doing its bit to constrain land markets, economics took care of the rest.

17. There are certain characteristics of land, and urban land in India in particular, which discourage
commodification and hence constrain its marketability. I categorize these as inherent problems
of and, institutional (by this I mean administrative) limitations, and finally, Legal & Regulatory
distortions. Let us look at each of these.

18. Land First, land suffers from some peculiar characteristics that make marketing in land a
difficult exercise. Land is a limited, a finite resource. This is self evident, but actually does not
make land so very different from other natural resources.
But land, in addition to being limited, also suffers from imperfect substitutability, that is, no two
pieces of land are alike. Where the land is mineral rich or strategically located, this non
substitutability is enhanced.
The lack of perfect substitutability also means that there could be a private value associated
with a given piece or parcel of land, which is different from its market value. While the market
value of a given land depends upon the society’s expectations of economic profits from the
land, (determined partially by the land’s specific location, and the environment around it), the
private value is determined not only by the landowner’s expectations of future economic
benefits from that land or its opportunity costs for him (expected income from an alternate
asset that he can buy) but also other additional factors such as fear of displacement, emotional
attachment of the owner, subjective utility derived from the specific land/residence, and the
extent to which his social identity is determined by his land ownership. This explains why
market fails in certain cases, particularly why some people refuse to sell land even when the
market price (or even a premium over the market price) is offered to them. It also explains why
people react negatively if there are plans for changing land use in a neighbouring area which
would increase congestion or pollution in the area.
Both the private and economic value of any given piece of land is contingent on the
developments in the area surrounding the land. If an area, for example, gets urbanized, then
economic activities in the area increase and in the process land values also increase. The
Secretary Ministry of Urban Devpt was narrating an instance when he visited an area in the
outskirts if Delhi. The landowners of the area pleaded with him to announce that the area was
to get metro connection. Not even to actually connect, even a mere announcement would
make a difference to land prices. Path dependence of values comes from the fact that once an
alternative economic activity gets started in the neighbouring areas, it acquires a momentum of
its own and creates incentives for changes in land use in that area, which tend to influence the
land price. So externalities impact on land markets in a big way.
In India, like several developing economies, a large part of the land is devoted to agricultural
use and the bulk of the farms are operated by family labour. The marginal product of labour in
such farms is close to zero, because of typically small land holdings and large family size. Here,
some members of the family work on the farms without adding to the farm’s productivity. This
phenomenon is known as ‘disguised unemployment’. The implication is that if imputed labour
costs (prevailing market wage rate) are taken into account, several farms would be making a
loss. This means that market prices of land, which are based on ‘economic profits’, would be
less than the value ascribed by those who are dependent on land. Nevertheless, the disguised
employment in farming is highly efficient in the social sense since it allows employment of more
labour than capitalist farms maximizing profits alone would do. The system is socially desirable
 because for most farms in developing economies, land holding is the limiting factor in
maximizing land productivity and labour the surplus factor. The problem arises when the
system is disrupted by acquisition, because the ‘surplus labour’ makes it extremely difficult for
the organized sector to provide jobs to all the land-dependent people displaced by projects and
to compensate them for their loss of livelihood.
One of the important problems recognized with regard to the functioning of land markets,
especially in urban areas, is the ‘hold-out’ problem. This occurs when a large piece of
contiguous land is required for a certain use, which involves the acquisition of land from a large
number of land holders, some of whom may be unwilling to sell (that is, hold-out). Hold-outs
often occur because it is in some landowners’ interest to ‘hold-out’ in the expectation of being
able to extract a higher price for their land once the acquirer has already incurred costs by
acquiring a significant fraction of land required for the project. Economists recognize this rent-
seeking behaviour as a justification for the use of eminent domain powers of the state, under
which the state can take over land without consent of the owners and hand it over to the new
entities to pursue socially beneficial activity. Azim Premji Universiy
All these factors, which are not really related to the intrinsic value of the land, influence the
willingness of the land owner to trade in the land, thus impacting on the tradeability of land,
and thus influencing and distorting land markets.

19. The second set of factors that influence land markets are what I categorize as institutional, or
administrative distortions on land. These also explain why industrial investors are wary of land
purchase, and frequently resort to eminent domain rather than direct purchase. Like the
inherent issues we discussed, these too have their roots in the perception towards land, this
time by government and government functionaries.
Why is land record administration so poor in India? There are some legacy issues here. Since
British times, or even earlier, land has been viewed as a source of revenue rather than an
economic asset in itself. So records were prepared only for agricultural land and not residential
lands in the villages and particularly urban lands. Spatial records (maps) were particularly
neglected. In the post-independence period, land revenue declined in importance; sometimes
the cost of revenue collection exceeded the revenue. Not surprisingly, the revenue staff gave
low priority to the maintenance of land records.
Further, there are deficiencies in the institutional framework. There are multiple agencies
handling land records (Revenue Department, Survey Department, Panchayats, Stamps and
Registration Department, etc.) and there is no interconnectivity among these agencies. As a
result, when one agency updates records, records in others become outdated. Computerization
of land records was launched as a centrally-sponsored scheme in 1998–9. The progress has
varied widely across the states. Focus, however, has been more on computerization and less on
creating a system that maintains accurate and up-to-date records.

A related issue is the widespread lack of clear land titles in India. Purchase of land property
entails huge risks since the buyers are accountable for problems with the title even though they
may not have been aware of such problems despite their best efforts and due diligence at the
time of purchase. This arises because land records that are relevant in determining the title can
go indefinitely backwards, and there is no option for a private person to ‘commutate possible
objections to the title’ by appropriate legal action and notification. In other words, there is no
legal provision for a land holder to register his land with a particular notified authority, so that
through announcement and due legal process, he can commutate possible objections to his
title and thereby, achieve clarity on his title. Since this facility is not there, there is always a risk
that a seller does not have clear unencumbered title to the land. This puts a downward
pressure on the price of land in relation to its true value. But why are titles unclear in the first
place? The simple answer is that the legal system that puts the rights in land on public record is
inadequate in India. There are two ways of putting the rights on record: deed registration and
title registration. Under the deeds system, the potential buyer is supposed to investigate
whether the seller’s title is genuine, while under the title registration, there is no need for such
investigation since the titles are already verified for the potential buyers by the registry system
(World Bank 2007). The Registration Act, 1908 provides for registration of deeds, which
establishes public records of only the transaction, but not the validity of the transaction. Nor
does it imply any inference that the parties are legally entitled to carry out the transaction. This
makes land titles in India ‘presumptive’ and not ‘conclusive’. The Registrar’s office is not only
 under no obligation to check the veracity of title claims, but also does not have the access to
land records and cadastral maps to do so, and this is because of lack of connectivity. This
creates scope for frauds, disputes, and litigation.
High transaction costs are one of the main factors that have prevented the development of an
efficient land market. The average stamp duty is still in the range of 9–10 per cent of the
transaction value, which is very high by international standards. Since stamp duties are to be Commented [A5]: Uttar Pradesh and Haryana are 14.5 per
cent and 12.5 per cent of transaction value, respectively, In
contrast, ‘… the maximum rate levied in most developed
paid on all documents that are registered, high stamp duties have led the transacting parties to markets whether in Singapore or
Europe is in the range of 1–2 per cent
either avoid registration through various means including informal agreements or underreport
the transaction value or resort to power of attorney arrangements. Many cases that come to
my court are like this; in order to avoid stamp duty, the parties have engaged in an oral
agreement, usually between friends and family; but when friendship/familiar relations falter,
the oral nature of the agreement gives ample opportunity for opportunism of the parties. This
not only reduces the revenue of the states but also undermines the land administration system.
High transaction costs are also iniquitous; they deter the small investors from treating land as a
pure asset with the sole intention of making a profit, but not the major players. This is so,
because agreement to buy or sell through instruments such as ‘power of attorney’, which can
help bypass registration and hence payment of stamp duties, can be enforced through muscle
power, which the small players in the land market do not have and are at a disadvantage. This is
why very few small players use power of attorney to enter into land transactions and if they do,
they run huge risks. One of the important reasons for mafias to emerge in the land business is
their ability to ‘enforce’ such agreements.
Together all these institutional limitations, which are rooted in the perception of land as a
source of state revenue, have the cumulative effect of complicating land transactions,
increasing information asymmetry and transaction costs, enhancing entry barriers into the
land markets by multiple small players, increasing dependence on eminent domain, reducing
contestability and curbing the tradeability of land.

20. In land, more than in any other business, the value is affected in many ways by regulatory
controls over use. Typical regulations in the urban context include zoning, regulated densities,
and building bye-laws and to some extent are ‘inevitable’ if urban planning has to take place to
overcome the large negative externalities that can result from haphazard and unconstrained
land use. Many times, however, these restrictions destroy value. In India, for example, ratios of
floor space to land area of buildings have been kept low through regulations.
In India, perhaps the biggest depressing effect on agricultural land arises out of the ‘ban’ on use
of agricultural land for nonagricultural purposes. Non-Agricultural Use Clearance (NAC) from
the local/state government is necessary before agricultural land can be considered for other
uses. Non-agricultural Use Clearance (NAC) is normally not granted to a farmer who wants to
continue to use the land for agriculture while looking for a buyer. NAC is given typically only to
the owner who comes up with a concrete proposal for putting the agricultural land to non-
agricultural use. Since farmers typically neither have the ability to produce such proposals nor
the capacity to pursue alternate uses, they cannot benefit out of the value accretion, resulting
from (potential) non-agriculture uses. The requirement of NAC, therefore, means large rents to
the purchaser of agricultural land at the cost of the agriculturalist who normally cannot think of
getting NAC for his land. In case land is acquired through market negotiations, it is possible for
the farmer to bargain some part of the value creation due to anticipated use change. In case of
compulsory acquisition, however, the entire value creation on account of aggregation of land
holdings and change in land use pattern, accrues entirely to the requiring body.
This phenomenon of ‘regulatory arbitrage’ amounts to the state mediated transfer of wealth—
through a regulation— to the buyer from what is legitimately due to the farmers. This feature
of the Indian land market regulation, more than anything else, depresses the price of
agricultural land relative to their true (potential) values. At the same time, it creates a major
distortion in the investment decisions related to projects involving land, because the
entrepreneurs may simply be motivated by the transfer of wealth referred to above, rather
than the project per se. This is especially true if the land is acquired through the use of eminent
domain powers. The result is sub-optimal project choice as well as a tendency to acquire excess
land. In the recent SEZ investments, the ‘arbitrage’ of land use restrictions has been one of the
important reasons for ‘entrepreneurial’ interest. Also, many public sector units, universities,
and other institutions have a tendency to acquire excess land through compulsory acquisition,
which remain unutilized for several years. The (perverse) incentives to do so are too strong to
resist for many.

Another factor that keeps the price of agricultural land low is the ban on its purchase by people
other than farmers, which is in force in some states including Karnataka, Maharashtra and
Gujarat. Many people who are not traditional farmers are often willing to pay higher than
market prices for lands used as orchards, farmlands near tourist locations, scenic lands, and
lands having potential for corporate farming. But they are barred from participating in the
market, leading to reduced demand for agricultural land. The restriction reduces the market’s
ability to allocate land to its highest value use, accentuates the urban–rural divide, and clearly
hurts the farmers the most.

There are certain inherent problems with land because of its peculiar characteristics, which
impede the natural emergence of a well-functioning market. The legal and regulatory
framework can potentially overcome these problems. In India, despite some reform efforts, the
land market continues to be highly distorted and inefficient. Land records are inaccurate,
outdated, and incomprehensive. There are widespread uncertainties relating to land titles,
which have hurt the market. Transaction costs are significantly high by international standards,
which have discouraged formal land transactions. Initiatives which could have made the market
function better have not been taken; while some regulations have been introduced which have
introduced or magnified the distortions in the market. A major negative consequence of this
underdeveloped and distorted market is that promoters of industrial and infrastructure
projects have eschewed market negotiations for land acquisition and have favoured the use of
eminent domain powers. While reforms have begun in many areas, an area that has been left
untouched relates to regulatory restraints on land use. The most notable has been the
requirement of NAC. Because the clearance is typically given after land is transferred from one
party to another, there is a significant transfer of wealth from farmers to project proponents,
which has been the source of a great deal of social discontent. The elimination of this
 restriction on land use would go a long way towards making the land market a great deal more
efficient than it is now.

21. Diagram.

22. How does this happen? Given the complexity of bringing into effect a systematic and a priori
conversion of agricultural land into serviced urban land in the jurisdictional and administrative
context of India, most Indian cities have adopted a laissez faire approach. Urban development,
led mostly by developers, is allowed to creep out into the surrounding countryside—a plot or a
layout at a time. Usually, a blind eye is turned to such creeping urbanization. Sometimes, a
minimal attempt is made to plan or regulate the development and to levy charges. Once an
area is built up and if the residents are able to bring sufficient political pressure to bear on the
administration, rudimentary infrastructure facilities such as streets, water supply and drainage
are provided to the extent that it is physically possible. Letting things be is easy, it requires little
foresight and effort on the part of public authorities. It is also increasingly difficult to stem the Commented [A6]: It can be argued that though the laissez faire
approach results in a sub-optimal solution, it is better than a
tide, to adhere to a development plan in the face of a strong tendency towards unplanned forceful administration
totally thwarting city expansion. As the Chinese, Cuban, and South
African experiences have shown, forcefully thwarting city expansion
growth. Most of the building law violation cases that come before me use the defense that can impose high social and economic costs and lead to build up of
pressures that eventually require drastic corrections.
“everyone else in the neighborhood has done the same thing”. So violations become
contagious. Another phenomenon that happens where the public authorities make some effort
at planning is that of leapfrogging & infilling. Let me explain what I mean. To go back to our city
map, whenever there is a large establishment or infrastructure to be set up, whether we have
the IISC and associated institutions in the Yeshwantpur area some decades ago, more recently
the Electronic City in the Southern suburbs, with very detailed meticulous planning; then the
interstices play catch-up in a scenario of almost total administrative neglect.

23. What is the way forward? The first thing to understand is that the land question has become so
complicated and complex, reform has to be necessarily step by step and gradual. More
 important than the measures to be taken is a change in the underlying thinking philosophy on
land. The first step is a realization of the need to build up robust land markets. Land, labour,
capital are the 3 major factors of production; we have achieved a measure of deregulation in
capital & labour, Land deregulation is the crying need now. It also needs an acceptance that the
gradual commodification of urban land is both inevitable and desirable. Rather, the path
forward should be the gradual easing of stringent and elaborate procedures for converting
agricultural Land for NA Uses or restricting sale and transfer of land are irrelevant in urban
areas. At the same time a balance has to be achieved between the need for land for
developmental activities and the need to protect the interests of those impacted by the
acquisition of the land—landowners, tenants, landless labourers, and others whose livelihoods
depend on the land.
24.
25. Urban land management suffers from insufficiently considered taxation policies. Present
policies have a number of perverse unintended outcomes. Viciously, they promote a culture of
non-compliance and strengthen the informal economy; urban land management systems
require fundamental reforms. Distorting regulatory systems and interventions need reform
dismantling; and institutions for enabling and monitoring the proper functioning of land and
property markets need strengthening.

26. Today, with the increased pace of development and higher aspiration levels, it has become
clear that alternatives to haphazard laissez faire development and ineffective public agencies
are urgently required. There is also a greater willingness to experiment with market
mechanisms and to partner with the private sector. On account of this, a number of state
governments are announcing ‘Township Policies’. Here, private developers are encouraged to
privately assemble agricultural land in the countryside, wherever they think it is viable to
develop serviced urban land or land and buildings (‘townships’). Government support is
provided in a number of ways. Some states help with land acquisition. Others only promise
regulatory support; re-zoning of the land in statutory development plans, and quick ‘singe-
window’ approvals. Most assist by providing connectivity to existing infrastructure. Developers
are expected to privately raise finances and invest in building infrastructure and/or buildings.
Though a number of township policies have been announced, considerable confusion continues
to prevail and it seems to be too early to say how this mode of land conversion will play out in
the long run.

Reforms that strengthen the land-related information management system would not only
increase the relative attractiveness of market negotiations vis-à-vis use of eminent domain, but
also make land administration more affordable, accessible, and efficient, and thereby 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 of land as a
collateral for effective operation of financial markets; (iv) allow spatial planning for issues
ranging from the provision of infrastructure such as roads and utility lines to environmental
protection; and (v) enable local and central government to effectively implement programmes
and collect revenue (World Bank 2007).