Direct benefit transfer comes with certain pre-conditions, primary among them is the need for a robust method to identify beneficiaries.
The Narendra Modi government’s new scheme for farmers will most likely run into a hurdle – lack of computerised land records that are linked to bank accounts. For a country where land records are in a poor state, the success of the Pradhan Mantri Kisan Samman Nidhi scheme, under which the Centre proposes to pay Rs 6,000 a year – or Rs 500 a month – to about 12 crore small and marginal farmers, will largely depend on how the system identifies the scheme’s beneficiaries. Telangana had undertaken a massive exercise to update and computerise land records prior to the announcement of its Rythu Bandhu scheme.
A major component of any government scheme is the method of disbursal of benefits. Direct benefit transfer (DBT), a much more superior system to the inefficient subsidy arrangement we have today, has its advantages. However, the transition to DBT comes with certain pre-conditions, primary among that is the need for a robust method to identify beneficiaries. Without meeting these pre-conditions, overloading the DBT system may lead to its collapse.
The challenge can be illustrated with a simple example – in a family where three sons and three daughters have inherited their father’s land after his death, and the land records have not been updated, in whose bank account will the amount be credited?
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Land not measured correctly
A small study by the National Institute of Public Finance and Policy (NIPFP) of two tehsils (100 parcels) in Rajasthan found significant errors and discrepancies in the maintenance of land records. In 24 per cent of the cases, the difference between the area on record and the area measured was more than 20 per cent. Errors like these contribute to the problem of determining eligible farmers.
Owners not identified
Most of the time the land titles in India are presumptive – the person in possession of the land is presumed to be the owner. In Rajasthan, for example, the study found that the state had stopped keeping records of possession in 1972 and there was no data on possession of land at the tehsil level. Title records were usually not updated, and therefore the owner in the registered title deed may have passed away or sold the land to others without updating the land records, making it hard to identify the present owners.
Multiple owners
The next challenge the government would face in extending the scheme’s benefits would be in identifying the beneficiary farmer. Farmlands in India are usually jointly owned by several members in a family, but not all of them could be actively engaged in tilling. Since possession records are not updated, the government would have to assign the annual Rs 6,000 to one of the multiple owners or distribute it evenly among all the owners.
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Incomplete computerisation
Computerisation is seen as a panacea to several state capacity problems in India. But computerisation, sadly, will not provide solutions to the problem of land records. Over the last decade, the central government has been operating the Digital India Land Records Modernisation Programme (DILRMP). States are responsible for implementing it at their respective ends, and different states are at different stages. While some like Karnataka and Odisha have completed the process of computerising records, keeping them updated remains a challenge.
A report on DILRMP released in September 2018 found that while 87 per cent of the villages have computerised the records, transfer of ownership records have been computerised in only 50 per cent of the villages. Moreover, only 20 per cent of the villages had computerised the record-of-rights, which records possession.
The NIPFP study found a large number of vacancies in the departments responsible for maintaining the land records. For example, in Girwa tehsil, Rajasthan, 20 of the 52 positions for Patwaris were vacant. Patwaris form the front line of record updating system for land, and lack of manpower affects the quality of record keeping.
Fertiliser subsidy failed
The government has tried to use land records to transfer fertiliser subsidy in the past and has failed. This subsidy, like many others, suffers from leakages as the subsidy component is not provided to farmers but to the manufacturers. The Economic Survey of 2016-2017 acknowledged the leakage and recommended shifting to direct benefit transfer. The government started a pilot project to pay fertiliser subsidy directly, using the digitised land records.
However, within a few months, the tracking of land records to provide subsidy had to be abandoned. The attempt to use digital land records showed that the quality of computerisation was not up to the mark, and, consequently, was not dependable. Farmers themselves were surprised to find that their names did not feature in the appropriate records after computerisation.
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May compound land title problems
The subsidy programme also runs the risk of introducing further problems in the land records system. Since such records are poor and the title is largely presumptive, most ownership is proved through indirect methods. For example, any person who has been paying property tax for years is presumed to be the owner of that property.
Similarly, electricity bills, irrigation fees, and other indirect methods are used to prove ownership, in the absence of proper records of the title. In such a situation, the subsidy payment may also become one more presumptive evidence of ownership. The family member who collects the subsidy for several years may claim the title of the underlying agricultural land to the exclusion of other members. The subsidy scheme may pose a significant risk to those owners who are not collecting the subsidy. It may result in dispute among family members over the subsidy – not out of concern for the monthly Rs 500 but out of fear of losing the ownership of their land.
The way ahead
The first step required is verifying ownership documents at the village level. Second, these records need to be checked by revenue staff and change of ownership has to be recorded. Disputed cases have to be identified for early resolution through revenue courts. These then need to be computerised.
Land records in India have a long way to go before they can become reliable enough to be used for direct benefit schemes. Using fragile government systems for ambitious schemes has the risk of premature load bearing – a situation where unrealistic expectations about the level and rate of improvement of a system lead to excess demands on the system, causing the system to eventually fail.
Shubho Roy is a consultant at NIPFP
Ila Patnaik is a Professor at the National Institute of Public Finance and Policy
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