There’s hardly a person in India who has not heard of land-related disputes. But why do such disputes happen in the first place? Often, there’s a lack of clarity about who owns a piece of land/property/house/flat.
This is not only a social problem, but it is also an economic problem. At a social level, it results in discord between members of a family. At an economic level, it results in severe consequences.
Imagine that a company wants to invest billions of dollars in a plant for which it needs a plot. If it doesn’t know who owns that plot, it can’t invest in it. Due to these problems, the central government is considering implementing demat accounts for land in India.
How Will A Demat Account Work For Land?
When you open demat account for stock market-related transactions, it has information about all the securities you own in an electronic format. It’s like having an electronic account for all the securities you own.
Besides, once you have certain securities in your demat account, you are their owner and there’s no doubt about it. Basically, it ensures that there are no disputes as to the ownership of those securities.
On similar lines, a demat account for land will keep all the information about your land-related assets. Whether you own a piece of land, commercial property, house, flat, or anything related to land, it will be shown in that demat account.
Since there will be clarity about land ownership, it is likely that there will be fewer land-related disputes in the country. This will help Indian society and the economy.
Banks and mortgage finance companies will also be beneficiaries of demat accounts for land. Currently, a piece of land at times is sold to multiple people or entities fraudulently. Hence, a bank doesn’t know who the owner of this piece of land is. This makes it difficult to even accept land as collateral for providing loans to borrowers.
But if there’s clarity as to the ownership of a piece of land, it will become much easier for banks and mortgage finance companies to extend loans. A demat account for land can certainly help in this regard. Now, let’s discuss what are the challenges in implementing dematerialisation for land and how India can overcome these challenges.
How Should India Prepare For Dematerialisation Of Land?
For dematerialization of land to be efficiently implemented in India, all the physical documents pertaining to land ownership will have to be digitised. Then, they will have to be centrally stored and updated so that they can be interchangeable and transferable.
All states and union-territories will have to implement 100% digitalisation of land records. There can’t be any compromise on this matter. Currently, there are so many land disputes in Indian courts. These will have to be resolved because the data about ownership of property currently contested will also have to be updated.
The government and authorities in India will also have to acknowledge that dematerialisation of land will be more complex than that of securities. For example, even today only a tiny percentage of India’s population invests in shares. However, a much higher percentage of our population invests in land-related assets.
Besides, for most people, land is a much more important asset than securities. Hence, the level of preparedness required for dematerialisation of land is much higher than what was needed for the securities market.
To deal with this complexity, the central government will have to play a pivotal role by creating a central repository that will have computerised data on all land and property deeds.
The first and most important thing for the government to ensure is that the title verification process for land is 100% effective and efficient. Without that, everything will fall flat.
Conclusion
There’s no denying that dematerialisation of land will be beneficial. But if we have to open a demat account for land, the government and authorities will have to step up. If they are able to successfully implement it, it will be a monumental success for India and hopefully will change the direction of the country.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
