The National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019, as passed by Lok Sabha

DR. AMAR PATNAIK (ODISHA): Sir, I start with the Peruvian Economist, Dr. Hernando De Soto. He used it first in the world, one of the first, in 2010 in his book, 'the Mystery of Capital'. He says that you give property rights to these squatters, slum dwellers to unlock the capital that is already embedded in that. And how? By giving property rights to these people, you can develop them further by accessing capital, by also accessing utility services. Sir, that is why I would say that this initiative is really praiseworthy. I support the Bill. I also support the action taken before by the Delhi Government in this regard. But while applauding this particular activity, I must point out the problems that have been faced before when this particular initiative or this kind of initiative has been taken in other countries like Cambodia, Argentina, Peru, everywhere. Number one is the fact that -- the most important -- case studies in other developing economies where such programmes have been implemented show that administrative procedures regarding land registration, plan approvals and transfers in such programmes are so cumbersome and expensive that they end up encouraging more squatter settlements. Hence land administration needs to account for existing political economy. Capacity building through personnel training and digitization of land records should be given due priority. So, this would be a problem because, I think, power of attorney has been accepted to be recognized in which case who is the original owner who gave the power probably would have to be ascertained. There might be complexities there. The second one is, insofar as unlocking capital is concerned, there have been mixed results achieved in implementation of such projects worldwide. The claim of asset ownership facilitating easier access to formal credit has been debunked by recent research. In Peru, the test group had only 12 per cent more loans sanctioned by the nationalized banks, out of which a number of them turned NPA. There were various reasons for it. Number one, the people themselves were not interested because they were more interested in giving it to their near relatives in informal arrangement in which they get more money, more rent out of that. Second, the banks were skeptical of taking the houses as collateral since they fear that Government isn't likely to agree to seizure of homes of the poor and that the costs of recovery can far exceed the cost of the loan. Third, the squatter occupants are mostly employed in the informal sector. So, they can't provide a revenue stream for which a loan can be given. So, this experiment has previously failed. I am not getting into the politics of it. Definitely, there is a humanitarian angle to it. But in terms of economic kind of assessment of the proposal, I think, one has to be careful of these aspects. I would strongly recommend to the hon. Minister, through you, Sir, that these aspects may be taken into account. Another important thing is, Sir, in Odisha, the hon. Chief Minister of Odisha, in November, 2018, in fact, in May, 2018, took out a Scheme of JAGA in which we gave property rights to about 600 slums all over the State, 450 sq.ft., 600 sq.ft., and in that, one critical component was co-ownership of men and women, the husband and wife together, so that in case the husband leaves, the house or the property still remains. This particular aspect is not dealt with in this report. So, I would finally end by saying that the livelihood aspect which is involved in this exercise should also be taken into account instead of taking a purely legalistic view of giving property rights. The property rights would not automatically entail unlocking of the value of the land. Thank you so much, Sir.