Opinion Plotting for the people?

Hernando de Soto,the distinguished Peruvian economist,in his book The Mystery of Capital asks why capitalism is a success in the West and a failure everywhere else. He concludes that it first happened because of the almost inadvertent creation of property rights,properly documented and enforceable. Originally designed to settle disputes,these recorded property rights have then provided the collateral needed to raise capital,and thus underpinned the entire process of funding innovation and entrepreneurship. In other words,capital comes to life because of enforceable property rights. The greater the number of people who have marketable,enforceable property rights,the bigger will be the pool of potential business talent and enterprise. The eventual result should be a stronger economy. Perhaps it is the poor who can make our country rich (and help themselves in the process).

So the proposal to assign property rights to those living is slums is entirely laudable. It gives the poor the same access to legal property transfers as are already enjoyed by the rich. And if they have the freedom to offer property as collateral it has the potential of opening up for the poor opportunities for access to capital as are already available to the rich. Now for the caveats.

As a society,we have deeply entrenched notions of inequality. In India we do believe,in our heart of hearts,that human beings are unequal. This may be on account of the circumstances of birth,or skin colour,nature of occupation or money in the bank. Whatever the reason,we accept inequality as a fundamental fact of life,and feel perfectly justified not only in defending our position in the hierarchy,but also in ill-treating those below us to the point of gross injustice. And the Supreme Court of course supports us in upholding inequality. Slums must be removed from the banks of the Yamuna (because the occupants are poor) but malls and temples are allowed (havens of the rich). The point is that however noble the government’s intentions,when it comes to implementation there will be layer upon layer of the bureaucracy looking after the minutiae and hell-bent on scuttling the basic purpose. So while title may be granted,it will be on condition of non-transferability,thus denying access to finance through the use of the property as collateral. Or the period of land lease will be so short,like 5 and 10 years in the case of Bawana outside Delhi,that no one is encouraged to spend on building anything permanent because who knows what the revision in land rent will be after 5 or 10 years — 99 year leases are only for the rich,not the poor — and what kind of collateral can a 5 or 10-year lease on property provide anyway? Or the lease rent amounts will be absurdly high: in Bawana,40 km away,where the slum dwellers from Yamuna Pushta have been resettled,land rent is higher per square metre than property taxes in the Class A colonies of central Delhi.

And then,what exactly will the poor have title to? Plots of 12.5 and 18 sqm per family,as in Bawana,thus condemned to this size of house forever? Or will these be larger plots,for a society of occupants,with each family entitled to a flat,and that necessarily implies multi-storeyed construction? Clearly there is great deal of thinking through to be done before we can achieve genuine,marketable property rights for the urban poor. Without that,the government’s intentions can be all too easily defeated,brushed aside by a hostile bureaucracy. And you can be sure voters will judge the outcome,not the intent.

The author is an urban planner based in Mumbai